Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are chatting about this morning.
Good Morning! US Futures are in the green, with Nasdaq and S&P up 15bp early. This follows continued unwind of Greek hedges, which sees the DAX up 1% led by consumer discretionary and financials. Greece’s banks were up ~6%, extending Monday’s rally of nearly 21% as headlines indicate Greek Bank runs appear to subside (No further word of capital controls after unofficial reports circulated yesterday). Volumes in Europe are average, except in Stockholm where they are trading 50% heavier than normal. Over in Asia, Chinese Stocks rebound after worse week in seven years, with the Shanghai Composite Index climbing 2.2% (7% intraday swing in China) – Tokyo’s stocks jump to a 15-year high, supported by the government’s three-year growth plan and falling Yen, while Aussie jumped to a 3week high led by HC and Telecom.
The US 10YY is slightly higher after nearing a 2.4% test in the overnight, while German Bunds basically unchanged as Eurozone business activity hits 4-year high in June (markit). Greek Paper continues to be bought, driving the 10YY differential with Germany the tightest it’s been since March. As optimism increases, the Euro is being aggressively shorted (New “Carry Trade?”), driving the DXY thru 95 and causing a headwind for commodities. Gold continues to bounce on yesterday’s lows near $US1180, while Copper is seeing a nice 1% pop. The Oil complex is mixed, with Brent in the green — but WTI under pressure on higher $US and upcoming inventory data. Scheduled Catalysts include Fed’s Powell Speaks on Monetary Policy at 8am, ahead of Durable Goods Orders at 8:30. Twin housing reports, with speaking House Price Index at 9, and New Home Sales for May at 10 – Senators hold a presser to introduce 6-yr highway reauthorization bill at 10:15 — and at 1 we have an auction of $US26B in 2Y notes. API data for Crude after the close. At some point Senate Democrats head toward a pivotal vote on expanding trade negotiating authority