Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about before the first day of trading this week.
Good Morning! US markets bouncing from their August/September lows — with the S&P up 1.7% in the early go as #s from MS and BAC roll across the wires. China data, stability in the Oil complex, oversold conditions and expiry headwinds fading all contributing to the risk-taking early. Overseas markets are all much stronger, with the DAX up 2.3% as every major sector jumps. Huge rally by miners and energy companies in London have the FTSE up 2%, while Energy leaping 3% has the Stoxx rallying sharply on 1.6x normal volume. Oil bid is helping Middle Eastern markets recover from this weekend’s smackdown — Saudi is nearing up 4% on the day. Over in Asia, Doves buying in China as their GDP slowest in 25years – Shanghai Composite rebounded 3.3% and Hong Kong’s Hang Seng 2.1% – the Nikkei rose for the first time in 4 days, adding 40bp, while Aussie was lifted by almost 1% on the back of the miners — All Emerging Markets staged a decent rally from 6Y lows.
Haven trades are coming off fast, with the US 10YY up 5bp, following Bund Yields higher. The $ is making gains against Euro ahead of the ECB later this week, while Commodity Currencies like the Loonie, Kiwi $, Aussie $, and Ruble are all stronger as resources recover. The DXY is bid against the basket tho, as Yen breaking lower as investors anticipate BOJ action later this month. Thanks the China bid, Base Metals enjoying gains: Copper up 2.5%, Nickel and Platinum 1%+ – while Haven selling is pressuring Gold by 50bp early. Iran announced its full return to the global oil market by ordering an immediate increase in production, and the IEA warns on oversupply this AM — but the Oil complex is rallying with WTI up 1.7% and trying to get back upside $30 in the early hours. Natty Gas is adding 3% as the Northeast eyeballs cold temperatures and a nasty winter storm this weekend. Grains are all showing a bid this AM
Relatively quiet day as the US returns from a 3day weekend — at 10 we get the NAHB Housing Market Index, ahead of Net Long-term TIC Flows at 4pm from the US Treasury. Down in Washington, President Obama meets with Australia Prime Minister Turnbull at 11:20; the EIA Administrator Adam Sieminski testifies at Senate Energy and Natural Resources Cmte hearing on near-term outlook for energy, commodity markets — and the Congressional Budget Office releases projection of federal deficit, forecast for economic growth over next decade. We get some tech heavyweights reporting tonight (AMD, CREE, IBM, LLTC, NFLX), along with the PBS documentary on vitamins and the supplements industry (VSI, GNC, HLF). API data has been pushed to tomorrow night due to the Holiday (DoE Thursday).
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