Via Dave Lutz at JonesTrading, here’s a super-quick guide to what traders are talking about right now:
Good Morning! US futures rebounding After Biggest S&P 500 Drop in a Month, with the Minis gaining 50bp early. This mirrors broad strength across Europe, which sees the DAX up 90bp as Yield proxies and Financials gather upward momentum after a weak start. In London, the BoE stays unchanged as expected, but those Miners are lagging, coupled with heavy dividend distributions holding back the FTSE’s advance. Over in Asia, Shanghai rallied from early weakness to close unchanged, Japan added 40bp, while Aussie snaps a 5day winning streak as the Big fins retreated. Most of Emerging Asia posted a advance, paced by a 1.2% pop in Thailand. Volumes across Asia and Europe are pacing on the lighter side.
Ahead of 3 FOMC Speakers, all voters, we are seeing Treasuries reverse yesterday’s auction and retailer induced strength, pressing the 10YY back towards 1.75% in the overnight, while some sharp selling in Bunds have German yields up 2bp. The DXY is rallying against Euro as Eurozone industrial production falls, while Yen is reversing yesterday’s strength to press $/Y back over 109 into a Kuroda speech later tonight. Ore was off ~1% in China, while Rebar gained small — and we see Industrial metals like Copper rallying, while gold drops 50bp as traders book profits from yesterday’s spike. The Oil complex remains well bid as IEA boosts demand and slashes supply forecasts — helping WTI get upside that difficult $46 level early. Natty is losing 1% into inventory data later today.
Catalysts in front of us, we get Weekly Jobless Claims and the Import Price Index at 8:30 – Natty Gas Inventory data hits at 10:30, then we get a wave of FOMC voters: Fed’s Mester (hawk) Speaks About Inflation Dynamics at 11:45, while Fed’s Rosengren (dove) Speaks in Concord, New Hampshire at 11:45. The US Treasury will auction off $15B in 30’s at 1, yesterday’s 10Y auction saw massive demand. At 1:40 Fed’s George Speaks on Economy in Albuquerque — she is the biggest hawk on the FOMC. Quiet day down in Washington, but potential for firework headers is high as the House Republicans meet with presumptive GOP presidential candidate Donald Trump at 9, followed by a meeting with Senate Republicans just before Noon.