From Dave Lutz at Stifel, Nicolaus, a very quick guide to what traders are chatting about on this quiet morning.
Morning – Futures in the USA are basically flat this AM, but remain near highs of the overnight session. The DAX has lost small, dragged lower as Fins over in Europe are hit for 50bp as spreads widen slightly in the PIIGs and rough Economic data abounds – doubtful the strike in Greece any factor. In Asia, Japan closes at a 2M high following a 3day weekend (Buyback activity at a 8Y high), but India was smacked hard as India’s CB raises short-term borrowing costs to prop up the Rupee. Shanghai added small, led by Solar companies – while EAsia was under pressure. In Aussie, the ASX was up small but miners acted well as Rio’s update was better than expected.
The US 10YY is testing Friday’s lows of 2.52% as the street readies for Bernanke’s Testimony on Weds (House) – released at 8:30, Hearing at 10, Q&A at 10:45 – The DXY is under some pressure as Aussie$ Rallies on RBA comments – The Rupee jumps on RBI tightening – and the € is breaking higher. This is a natural tailwind for commodities – and Gold is your best performer, popping toward $1300/oz helped by a Barrick project coming offline in Chile. The Crude Complex is jumping to new peaks as well, but Gasoline continues it’s surge north – hitting YTD highs as Ethanol Credits leapt higher again overnight.
Focus will be heavy on US CPI this AM – If the US consumer price index to climb significantly from May’s 1.4% figure, it would undercut the dovish argument that asset purchases must continue to avoid deflation.
Definitely, as Lutz notes, the focus will be on CPI at 8;30 AM ET.
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