Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about before the market opens on Wednesday.
Good Morning! US Futures are off small and rebounding from earlier Greek headlines (Creditors demanding more concessions — Tsipras/Syriza balking), with the S&P off 20bp — but vastly outperforming European markets, which sees the DAX off nearly 1% as Consumer Discretionary names break lower. Athens off 3%, and most banks are 5-10% lower in Greece as dueling headlines weigh. Volumes are decent in Europe early, with most exchanges trading well over normal averages. Over in Asia, China liquidity concern eased after a flood of new offerings and state-backed papers calmed investors — helping the Shanghai rally another 2.5%, but our traders in Hawaii note “HK/SH connect Northbound selling picks up. Offshore not convinced… profit taking” – The Nikkei Hits Highest Level in More Than 18 Years on BOJ buying – Hang Seng up small and Aussie closed flat.
The US 10YY is off small, following the bid in Bunds as uncertainty on Greece causes haven buying — thus helping the Euro rally against the Greenback. The DXY is weaker, causing a tailwind for commodities — and we see all the “hards” in the green, with Lumber, Silver, Zinc and Platinum all up 50bp+. Softs are the source of funds early, while the Oil complex is under pressure despite API showing a bigger draw than expected last night at 3.2M Barrels – (1.5M barrel draw expected overall — 1.3m in Cushing) — The Oil complex is focused to see how the Nuclear negotiations go into Next week’s deadline – Iran’s Supreme Leader laid out unacceptable conditions last night
Scheduled Catalysts today include First-quarter GDP expected to be revised higher at 8:30 – DOE data for Crude At 10:30, a $US13B 2Y note re-opening at 11:30, ahead of the $US35B 5Y auction at 1. In Washington — House hearings on EIA’s analysis of EPA clean power plan and rising health insurance premiums under Obamacare begin at 10, and at 2pm we get 2 House committee hearings for investors to focus on — a hearing on Puerto Rico’s political status and economic outlook, and a House Ways and Means committee hearing on “Repatriation of Foreign Earnings as a Source of Funding for the Highway Trust Fund” (Many call this QE4).