Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about on Friday morning:
Good Morning! US Futures have leapt higher overnight, with the S&P marked up almost 1% led by Financials and Mega-cap Tech momentum names. This mirrors a broad recovery over in Europe, where the DAX has jumped 2.7% in heavy volume. The Banks are ripping higher in Europe, led by Italian institutions, as investors digest the ECB pivot from negative rates towards buying corporates. FTSE is lagging the upside move, gaining only 1.3% in lighter turnover, as the Retail sector lags. Over in Asia, China climbed small after the PBOC set the Renminbi at the highest level for 2016, but banks lagged sharply as peeps digested the “debt-to-equity swaps” headers from yesterday — The Nikkei rebounded from sharp losses to close +50bp on speculation of heavy pension buying, while Aussie gained 30bp as the big Fins rallied. All of EM Asia was marked higher, and coupled with Brazil up another 1% this morning will have EEM acting quite well to start the day.
The Euro is reversing some of yesterday’s historic surge, testing 1.11 in the early hours, as the heavy short-covering from lopsided positioning subsides. The Greenback is broadly stronger, making gains against Euro and Yen — but those Commodity currencies are stronger, led by the Aussie$. With a stronger DXY, we tend to have a headwind to commodities, but most Industrial metals are higher, led by a 70bp move in copper despite Ore falling almost 3% in China, snapping a 5day rally which tacked on almost 8%. With some reversal of Havens, as well as the stronger $ – we have Gold selling off from a 13M high. WTI is jumping 2.4% as IEA headers talked bigger US declines and more gradual Iranian ramps have Oil higher into Rig Count data later today.
Quiet day of catalysts, with Canada’s Employment Report and US Import Price Index at 8:30. Energy players will be focused on the Baker Hughes Rig Count at 1, followed by the CFTC’s “Commitment of Traders” data at 3:30. Down in Washington, the Senate and House are not in session, while President Obama speaks at SXSW panel in Austin at 3:40. Over this weekend, we get China retail sales, Industrial Production, FAI & credit data — and a reminder that Daylight Savings Time begins at 2:00 AM on Sunday.
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