Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about before the market opens on Tuesday:
Good Morning! US Futures are under some pressure, dropping 50bp as a sea of red bathes traders screens in Europe and Asian stock markets fall as BoJ stays unchanged despite a bleak economic view. Miners and Energy companies weigh in Europe, but the DAX is only off 50bp as Tech stays in the green and Fins outperform the selloff. In London, the FTSE is hit for 60bp as miners are smoked on Antofagasta headers, but Staples are outperforming, helping London stave off deeper losses. Volumes across the continent are light, with DAX and FTSE 30%+ below normal turnover. In Asia, Shanghai shrugged off initial losses to gain 20bp, but HK lost 70bp; Aussie was knocked for 1.4% as resource companies were hit; but Focus was on Nikkei losing 60bp as the Yen rallied as BoJ stays unchanged. It is a sea of red across EM Asia, with no market closing in the green.
The DXY is in rally mode as Janet kicks off the 2day FOMC meeting — typically a tailwind for US equities (“FOMC Drift”). Most $ gains this AM are coming from the British Pound, which is off nearly 1% on a fresh wave of Brexit concerns. The Euro remains downside 1.11 as Asian Growth concerns resurface, while in China, the yuan was fixed higher while reports for a Tobin tax aimed to curb speculative currency trading made the rounds. The Stronger $ is typically a headwind for commodities, and it’s mostly red out there – Base metals coming under decent pressure as Ore has biggest hit in 8months, dropping 5%+ in China — while even Gold comes under pressure as Canadian papers pitch taking profits. WTI off another 2.7% as it still sees heavy profit-taking post Iran and OPEC headers yesterday, while Natty gas continues to see covering. Softs are red across the board.
We have a decent day of Catalysts today – Starting at 8:30 with Advance Retail Sales for February and US PPI — at 10am we get NAHB Housing Market Index and Business Inventories. Treasury Sec Lew testifies to House Appropriations subcommittee at 10:30, while EM players will focus on the Brazil Bond Auction at 10:30. At 4 the US Treasury publishes Long-term TIC Flows, and at 4:30 US Crude come into focus as API releases Inventory data, where guesstimates expect a build of 2.5M barrels. Today also brings us Credit charge-offs and delinquencies (AXP, BAC, C, COF, DFS, JPM, SY) and Presidential primaries in Fla., Ohio, Ill., Mo. and N.C.