What Are Traders Chatting About This Morning? Oil, Germany, And Treasuries ...

Treasury DeparmentWikimedia CommonsThe US Treasury building.

Good morning on a cold winter morning here in New York. Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about this morning.

Good Morning! US Futures are up 50bp, following upbeat markets in Europe from oversold levels. Oil remains volatile, earlier Brent broke under $US50, 6Y lows — but the complex is unchanged right now. The DAX is up 1%, with Consumer names leading the rally on the back of strong German retail sales figures. Greek stress remains, Yields 45bp wider to bunds, Athens off 2.5% early tho, and keep an eye on France’s CAC, as a terrorist attack on a French Satirical magazine leaves 11+ dead and the gunmen at large. Over in Asia, Russia was closed today — the China fever continued, with Shanghai adding another 70bp and Hang Seng up almost 1%. With the Yen stabilizing, the Nikkei was flat after yesterday’s 3% smack, while South Korea squeaked out a green close. Aussie was weighted down by Energy Producers, and despite Ore climbing to a 1M high, BHP and RIO failed to mount a rally.

We are seeing some early weakness in the treasury complex, after yesterday’s “Relentless” buying from every type of investor. While the German 10YY is 2bp higher, it remains under 50bp and their “breakevens” slide towards deeper deflation on light EU CPI figures. The Dollar seeing a rally into the ADP employment report and Fed Minutes today, causing a headwind for commodities. Both Brent and WTI are slightly weaker despite API last night showing a massive drawdown of 4million (were expecting a build 750k) — the complex will DOE data today at 10:30, Street today looking for a build of anywhere from 380k barrels (Platts) to 700k (Bloomberg News). Natty gas continues to stabilise, while gold is under some pressure, back under the 100dma. Scheduled catalysts today include the ADP Employment Figure and Trade Balance data at 8:30; the Online Help Wanted Index at 10 — but focus is on the DOE data for Crude at 10:30. At 2pm, Diverging headlines between EU and US monetary policy should accelerate with the FOMC minutes. Tonight, Fed President Evans Speaks on Monetary Policy in Chicago at 6:30ET

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