Via Dave Lutz at JonesTrading, here’s a quick look at what traders are talking about this morning.
Good Morning! US futures are in the red, led by a 50bp drop in the Russell, which is well underperforming S&P and Nasdaq — interesting because we have further weakness in US Treasuries and the curve is steepening — should be huge tailwinds for those Financials. Over in Europe, markets are off their worst levels of the overnight, as Greek noise continues to skew trading in thin conditions (No deal announced, but “chatter” it is coming today — who knows). While the Fins are well bid overseas, The DAX is off 50bp led by drops in Consumer, HC and Tech names. Over in Asia, Shanghai popped 1.7%, and is now within 60bp of recent peaks — while tech-heavy Shenzen leapt 3.5% – Aussie stayed on hold, smashing equities for almost 2% as miners were hit sharply – South Korea weaker after 2 deaths linked to MERS virus. Weighed on airlines – NKY winning streak ends at 12 straight days as Banks weakened, and the Reserve Bank of India disappointed by only cutting 25bp — hitting Sensex for over 2%
The US 10YY is through 2.2% to the upside, as heavy selling in Bunds continues — The German 10YY is over 63bp again, propelled not by Greek Chatter, but Eurozone consumer prices rose for the first time in six months during May, helping the Euro firm back over 1.10 against the $US. The DXY is back under 97, despite sharp weakness continuing in the Yen, which saw a $US/Y 125 test in the overnight. The weaker $US is a tailwind for commodities, and we see Crude Oil bid up 1% despite FT headlines that Opec ‘may lift’ output target at next meeting (They are already 1mm/day over) — All the metals are bid, and covering is continuing in the Softs. Scheduled Catalysts include ISM New York at 9:45; at 10 we get Factory Orders and Fed’s Brainard speaking in Washington – We get Auto sales data throughout the session.