Via Dave Lutz at Stifel, Nicolaus, here’s a look at what traders are talking about today:
US Futures are slightly lower, and near the lows of the overnight. Aside from the DAX, which has been a major underperformer, all the EU markets are in the red. The persistent bid in Fincnaials is evident in EU, where the sector is trading unchanged despite some “aggressive” headlines on stress tests from the ECB. Volumes in Europe are trading light, anywhere from 20-325% below recent 20day averages. Stress persists in Ukraine, Russia is off 2.5% after being closed yesterday for Holiday — and is approaching 1Y lows. We have seen heavy inflows into the RSX, Russian Equity ETF — mostly done for short-creates. In Asia, Nikkei rallied 70bp as BOJ stood pat, and China managed a bounce as the Yuan rallied from recent weakness. The Aussie market closed unchanged, but Miners were under pressure again despite upbeat comments from Rio and BHP. Ahead of our Thursday print, watch Retailers as UK retail sales come in light — “Weather” related impact the theme du jour. Alt-Energy will trade heavy today, as FCEL (I’m long) is surging 22% on earnings, dragging PLUG up 12%+. Watch the insurers, as they plead to US congress to stop the Federal Reserve from imposing bank- like capital standards on their industry.
The 10YY is flat, staging a close above its 50dma — but Credit players are focused on the Puerto Rico issuance today — the largest sale of junk bonds on record. The Yen had a quiet session, as BOJ acted as anticipated — but the € is weaker against the $US, reversing the recent surge higher. The DXY remains below the “80” level, but its current strength is a headwind for commodities. That said, we have Industrial commodities rallying as China growth concerns recede — Nickel, Silver and Copper are all 50bp+ higher. Some Ukraine stress, coupled with the recent pop in Inflation Expectations of the US Bond Market has Gold higher, testing 4M highs again this AM. Energy commodities are all stronger, with Brent slightly outpacing WTI into our inventory numbers after the close today. Catalysts today include NFIB Small Business Optimism at 7:30, JOLTs Job Openings and Wholesale Inventories at 10, the week’s smallest POMO at 11, a 3Y auction at 1, and API Data for Crude at 4:30.