Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about this morning.
Good Morning! US Futures are tracking higher, adding 20bp ahead of the Fed today. European Markets are mixed, with “Grexit” fears resurfacing as a Syriza split could stall Tsipras as Troika chiefs land in Athens. The DAX is unchanged in average volume, but it’s just the Healthcare Sector’s 3% surge keeping it afloat, offsetting sharp losses in Consumer (Autos smacked on VW) and Materials sectors. All eyes are on China, where the Shanghai Composite spent most of the day in negative territory, trading weaker until the final hour of the session. Then the index shot up, closing 3.4% higher on reports of buying by government-backed funds in the final hour. The Hang Seng in Hong Kong advanced 50bp, Nikkei lost 13bp despite Japan’s retail trade showing the slowest rate of growth in three months. Aussie closed up 70bp as Miners ripped higher (BHP and South32 +2%, Rio + 1%, Fortescue leapt 7%).
The US 10YY is following German yields due north as Greek stress builds (Greek Bonds getting hit today — No exchange re-opening). Despite the weaker Euro, the DXY is off small as a sharp rally in Yen weighs, and the Kiwi$ one of the better performers on a Wheeler speech — and Emerging currencies steadier after hitting 15-year lows into the 2pm FOMC statement (Yellen isn’t scheduled to host a news conference and the Fed won’t publish any fresh economic projections). With the weaker $US, we have a tailwind for commodities, but Brent is having it’s sixth consecutive decline (longest losing streak since an eight-day slide in early September) — while WTI gets no lift from a surprise draw in API inventories last night. The Metal ocmlpex is mixed, with Copper adding to yesterday’s gains (Signs of production cuts), while Gold continues to languish under $US1100.
Scheduled catalysts today include Pending Home Sales at 10; the DOE data on Crude at 10:30, Treasury then has a $US15B 2Y Floater auction at 11:30, and a $US35B 5Y auction at 1pm — just ahead of the FOMC statement at 2pm. Today in DC, Congress holds three hearings relating to Iran nuclear deal — there is a House Cmte hearing on Dodd-Frank law and derivatives; House plans to consider 3-month highway measure — and at 10am CFTC’s Energy and Environmental Markets Advisory Cmte meets to discuss proposed rules on position limits, trade options.
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