Via Dave Lutz at JonesTrading, here’s a super-quick guide to what traders are talking about right now:
Good Morning! Markets are starting June in cautious mood, with US futures off 40bp – a combo of weaker global PMIs, Lower Commodity prices, OECD warning on Growth, and Brexit angst growing. Nothing but Red in Europe, with the DAX off nearly 1% as Miners are getting smoked across Europe and London — Glencore, Rio and Anglo all off 3%+ in London — hitting the FTSE for 75bp. Financials across the continent are seeing heavy profit-taking, with the EU Fin index off 2.2%. Volumes are pacing average. Asian readings on manufacturing and services sectors were generally disappointing, and the Yen stronger as Abe delays sales tax hike (as expected), hitting Nikkei for 1.6%. Aussie got whacked for 1% as commodity names got hit, while Shanghai closed almost flat. With the $ retreating, most EM Asian markets closed higher.
The DXY is retreating from 9week peaks, and we have a continued bid into Havens — the German 10YY down to 12bp, while US 10YY takes out yesterday’s lows to yield 1.82%. Fed Funds for a June hike are retreating fast, as Sterling one-month hedging costs hit highest levels in over seven years — BREXIT a key geo-political risk that could cause the Fed to wait until July. Aussie GDP better has A$ in rally mode, hitting the Greenback to yesterday’s lows. Despite this tailwind for commodities, Metals are getting smoked, led by a 1.5% drop in Copper — While the Crude complex drops over 1% into OPEC tomorrow as little change is expected. Natty is adding very small to yesterday’s rally, confounding the growing short-base, while softs are all off small.
Ahead of us today, Automakers will report May vehicle sales — at 9:45 we get Markit US Manufacturing PMI, just ahead of the official ISM Manufacturing read at 10, along with Construction Spending. At 2pm, the Fed Releases Beige Book. After the close, we get that API data for Crude, Gasoline and Distillates at 4:30 (Crude supplies seen dropping 2.5M, with 745k coming out of Cushing according to Bloomberg). OPEC and ECB tomorrow, ahead of US Jobs on Friday continue to dominate trader’s thoughts. Quiet down in Washington, as the House and Senate are in recess. At 9am, the National Academy of Sciences begins 2-day meeting on biotechnology trends.
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