Via Dave Lutz at JonesTrading, here’s a quick guide to trader chatter this morning:
Good Morning! US Futures are basically flat, mirroring mixed markets globally as tepid markets await the Fed. The DAX is up 40bp as Autos and Energy companies jump across Europe, but the Fins are seeing continued profit-taking as headlines this wee pound home the difficult conditions of 2016. In London, the FTSE is climbing 15bp as Energy and Materials rally — but turnover remains light ahead of their budget, with stocks trading 25% below normal volumes. Over in Asia, China rallied small as Premier Li said it is “impossible” for China not to realise its economic targets — While the Nikkei dropped 80bp on the lowest volume day of year. Aussie closed slightly higher as materials bounced, but the big banks saw profit-taking. Most of EM Asia managed to close slightly higher, but volumes were pathetic at best.
The US 10YY is off small, bouncing a few times from 1.95% as we await Janet (2pm release, 2:30 presser). The FOMC expected to stand pat on rates, focus will be on whether risks are “balanced” now (hawkish), and if the “Dot Plot” shows expectations of 2016 hikes dropping from 4 to 3. The $ is rallying against Euro despite EU construction data coming in better, and against Yen as Kuroda talks dovish, slamming their 10YY to a -8bp. Despite the stronger $, commodities are mostly higher — with Base metals following Ore’s overnight snapback, and even Gold is holding a slight bid early. In Energy, Oil rebounding as API came in lighter than feared (1.5M vs +2.5M) and Gasoline Inventories showed a decent drawdown. Headlines of an Oil Producer meeting in April helping sooth nerves as well in the complex. All the softs remain weak across the board.
We have an active day of Catalysts, starting with the UK’s Chancellor Budget Statement at 8:30, right when we get a slew of fresh data from the USA in CPI and Housing Starts and Permits for February. At 9:15 we get Industrial Production and Capacity Utilization, and then focus turns to the Energy complex with DOE data for Crude hitting at 10:30. The “Main Event” is this afternoon, with the 2pm FOMC Statement, followed by the Yellen Presser at 2:30. Down in Washington, President Obama will announce his Supreme Court Pick At 11.
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