From Dave Lutz, head of ETFs at JonesTrading, here’s a super quick guide to what traders are chatting about before markets open on Tuesday:
Good Morning! Futures are seeing profit-taking after their longest winning streak since October as we have some Angst building into the ECB, coupled with weak China Trade data has the S&P down 40bp, but focus remains on Mega-Cap tech, where AAPL and the FANG are all marked lower again to start today’s session. A sea of red over in Europe, with the DAX off 1.2% led by drops in discretionary and tech. London under pressure as Miners are getting hit as Commodity names see heavy profit-taking. Very light turnover across the continent tho, with most major markets trading 20-35% light into Draghi later this week. In Asia, Shanghai was hit for 3% initially on warnings about a housing bubble, then rallied to close up 10bp, while ChiNext, a gauge of Chinese startup stocks, recovered to trade up 2.5%. Our desk in Kauai noted “China Autos struggled as Feb sales underwhelm and Macau was weaker on speculation March GGR may miss” — The Nikkei was hit for 80bp as Exporters slumped on the rallying Yen and Banks saw heavy selling, while Aussie finally saw profit-taking, losing 70bp as banks and resource stocks fell.
Havens are well bid to start today, with Treasuries and Bunds seeing major demand as Japanese 7-, 10- and 30-year benchmark yields all set new record lows overnight. The $ is holding a bid against the basket, managing to rally from the 200dma overnight despite Euro bid as German Industrial Production popped more than expected. Yen continues to gather upward mojo into BOJ next week, while commodity currencies like the Australian and Canadian dollars are softer early. China Trade weighs on Industrial Commodities — Copper, aluminium and zinc are all lower, but Ore held yesterday’s bid overnight — meanwhile Haven and “stirrings” of Inflation have Gold up nearly 1% in the early go. Eyes on WTI, which had a successful 100dma test overnight, and has rallied back near unch despite negative comments from the Kuwaiti Oil Minister. Natty gas continues to recover from the violent smackdown of late, adding 1.5% despite the East Coast basking in the warm weather.
Quiet day of US Catalysts, as the FOMC Blackout begins and Economic data is focused elsewhere. We get Housing Starts from Canada at 8:15, and BOE’s Martin Weale speaks at high noon. Also at 12, the EIA monthly short-term energy outlook is released, and at 1pm the US Treasury will be auctioning $24B in 3Y notes. After the close today, we get API data for Crude, Gasoline and Distillates, with estimates US Stockpiles grew 3.5M barrels last week. Down in Washington, Treasury Sec. Jack Lew testifies before Senate Appropriations subcmte on proposed FY17 budget at 10am.