Via Dave Lutz at JonesTrading, here’s what traders are talking about this morning.
Good Morning! US Futures are holding tentative gains, but it feels headwinds for equities increasing. The DAX is getting hit for 60bp early as Tsipras and his new finance minister, Euclid Tsakalotos, travelling to Brussels to meet eurozone leaders, and early signs indicate no breakthroughs. Growth Sectors continue to retreat, with Consumer Discretionary shares falling 2% in Frankfurt, while Industrials and Materials drop 1%+. Like yesterday, volumes in Europe remain quite light, with most markets trading 25%+ under normal averages. Over in Asia, Shanghai shed as much as 5.1% before ending down 1.3% – and Shenzen collapsed 5%+. Eight of the 10 sectors in Shanghai declined on Tuesday. The top gainers were all state-owned, possibly reflecting price-keeping operations directed by the Chinese authorities as efforts to arrest the slide fail. Aussie’s Central Bank stood pat (as expected), and their equities bounced back almost 2% to record its biggest daily gain in five months, despite plunging commodity prices. The Nikkei had a great day, gaining 1.3% as the Yen dropped
There is a Very sharp bid to Treasuries and Bunds out there early. Yields well below yesterday’s lows, and stress is finally evident in the Euro — dropping thru yesterday’s lows under 1.10 — while Aussie and Kiwi Dollars were hit on China concerns. The $US is the “safe Haven” of choice, and it’s rallying thru yesterday’s peaks despite the Greek Drama pushing out hiking expectations into 2016. The Stronger Dollar is a headwind to commodities, and Metals continue to get hit led by a 2.5% drop in Copper (5month lows). China is the epicentre, where their Rebar prices are in collapse — Mining names will have a tough go today. Brent and WTI are holding slight gains, but quite a meager bounce after Oil’s biggest 1day drop in 5months. Aside from Eurogroup headlines, scheduled Catalysts today include US Trade Balance at 8:30 – JOLTS Job Openings at 10 — a $US24B, 3Y Auction at 1, and API data tonight after the close.