Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about this morning.
Good Morning, and Happy Friday! US Futures have been in rally mode over the last hour, finally reversing some euro-induced weakness. The DAX has been in the red all day, with Greek bailout talks postponed to Saturday, and FT headlines “Creditors prepare to protect eurozone from default” — but the selling seems exhausted with no sector off more than 1% and volumes light. The Selling wasn’t exhausted in China tho — Shanghai closes down 7.4%, and at one point Chinese stock-index futures tumbled by the 10% daily limit. Multiple headwinds cited (Margins, IPOs, Southbound Selling, PBOC activities) and there was no defence from Chinese State Media. Shenzen at one point overnight had fallen 20% from it’s intraday peaks 3 weeks ago. KOSPI continued to rally on stimulus — while Japan closed off small as profit-taking continues from 18Y highs — while Aussie was down 1.6% as miners lost ground after inheriting an overnight dip in many industrial commodity prices.
Given the building rhetoric, it’s surprising that US and German 10YYs are basically unchanged in the early hours. One would think most assets would remain “risk off” into the weekend’s uncertainty – Head of the Eurogroup Dijsselbloem has said that there’s still time for a deal on Greece and, “Saturday night it’s really over”. Expectations remain that a 12th hour deal will occur — and the “Pain Trade” is waking up Monday to closed Greek Banks. The Euro has been very quiet against the Greenback the last 24hours — basically unchanged around 1.12. The Oil complex remains under pressure into Iran headlines and Rig data — while most metals are under slight pressure. Big cover going on in the Grains tho, with Wheat up 3% into next week’s data
The Supreme Court is to issue opinions at 10am; potential rulings include same-sex marriage, challenge of EPA Clean Air Act authority. We also get Michigan Sentiment at 10am. At 10:30 FCC Chair Tom Wheeler speaks at Brookings event on broadband – just ahead of Bank of England Governor Mark Carney’s speech at 10:15. Fed’s George Speaks on the Payments System at 12:45, just ahead of that Baker Hughes Rig Count at 1. “Commitment of Traders” data hits at 3:30 — and then volume will explode to the upside as the Annual Russell Reconstitution happens on the close today