Our friend Dave Lutz of Stifel, Nicolaus passes along the topics about which he is talking about this morning.
It’s pretty quiet, as today is the calm before tomorrow’s Fed storm.
Still, here’s what’s going on:
Morning! Futures are tracking better in the USA, up 20bp, but off overnight highs. The DAX has just slipped to unchanged, despite Germany’s ZEW coming in stronger – and EU fins up 1% on the back of tighter spreads in the PIIGs. IN Asia, the Nikkei gave back small after jumping 5% since Friday AM, but Nikkei Futures are jumping almost 1.5% right now on the back of a weaker Yen. Emerging Asia was strong again, with Philippines and Indonesia up well over 1%. China added 40bp, but focus remains on the “cash crunch” there and stronger Home Prices. The Aussie Markets remained under pressure on the back of a weaker resource sector. Japan’s 10YY remains rangebound, as their 20Y auction was strong, indicating volatility dropping in the Credit Sector.
The US 10YY is jumping back to 2.2% ahead of the Fed’s 2 day meeting – so we need to watch for underperformance from Homebuilders, Utilities, REITS and Staples. The DXY is showing some legs as well, providing a natural headwind for commodities – Oil retreating from a 9m high ahead of Inventory Data, while the discount to Brent has evaporated towards $7, pressuring margins at refiners. Metals are mostly weaker, with Copper under pressure from lack of Chinese demand – and Gold dropping almost 1% as physical demand in Asia has deteriorated quickly into a slow season.
For a deeper look at what’s going on, see 10 things you need to know before the opening bell.
Business Insider Emails & Alerts
Site highlights each day to your inbox.