Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about ahead of the US market open:
Good Morning! Global Equity Indices were initially smacked hard following reports of terror attacks in Brussels, and while they recovered most losses from that headline, we remain firmly in the red across Europe and North America. The S&P is off 35bp, while Russell is nearly 50bp lower as haven flows prevail. Over in Europe, Travel Stocks are under sharp pressure on terrorist attacks to Brussel’s airport and metro system. Belgium benchmark index tumbled 1.4%, but has rallied back. Airline stocks are among the biggest fallers on the FTSE. The DAX is “only” off 10bp and rallying towards green as Discretionary and Materials stocks rally despite mixed sentiment readings from ZEW and IFO. Over in Asia, China stocks eased back 60bp from two-month highs as new guidelines on pension produces weighed on financial stocks. The decline broke a seven-day winning run for the index, its equal-longest since May. The Nikkei returned from a day off to jump 1.9% as the yen weakened back through Y112, while Aussie lost 30bp as the big 4 banks weighed.
Havens had a sharp bid on headlines of the explosions, but have reversed much of their move, with Gold “only” up 60bp and back above $1250, while the US 10YY initially broke downside 1.9% only to recover back to o/n highs. Sov Focus was on Japan, where 30-yr & 40-yr yields hit new record lows. The DXY continues to retrace higher as Fedspeak this week turns hawkish so far — Most gains coming against the British Pound, which has been hammered this morning, falling by as much as 1% as investors believe the Brussels attacks increase risk of Brexit and Moody’s warned on Britain’s credit rating. Industrial metals are weaker as Ore drops 1% in China, hitting copper for 40bp early. The New WTI Contract is holding gains, off only small but firmly entrenched above $40 for now ahead of inventory data tonightand tomorrow.
Ahead of us today, we get FHFA House Price Index at 9, followed by the Richmond Fed Manufacturing Index at 10. We have Fed’s Evans (Non-Voter, Huge Dove) speaking in Chicago at 1:30. After the close, Canadian Finance Minister Bill Morneau Delivers Federal Budget at 4pm, and the Energy complex will then focus on API data for Crude at 4:30. Tonight, Fed’s Harker (Leans Hawkish, Non-Voter) Speaks in New York at 7pm. Down in Washington, Treasury Sec Lew testifies to House committee on the international finance system at 10am. The House considers H.R. 2745, a bill that would limit FTC’s antitrust authority to challenge mergers and acquisitions through administrative litigation.