Dave Lutz of Stifel, Nicolaus has the topics that traders are talking about today:
US Futures are about 30bp weaker this AM, mirroring overseas weakness. While the DAX is only off 40bp, it is trading in heavy volume, 40% above normal — but the EU fins are off over 2% as DB announces a fresh capital raise and PIIGS bonds get hit. Peripheral Europe under sharp pressure however, led by a 2.3% drop in Italy as Italian Banks are getting smacked hard this AM as Yields are widening in Italian debt on chatter the ECB will refrain from any bond-buying measures this week. You can’t point to Ukraine for the stress, as the Micex is up over 1% to the highest since March as Putin Orders Troops Near Ukraine Back to Bases. In Asia, Japan was hit for 70bp, but China was the main event, where housing and finance concerns hit Shanghai for 1% in light trading. India’s market cheered the election results, with the Sensex popping 1%, but Aussie was hit for 1.3% as Miners whacked on Chinese concerns. The pops in India and Russia have Emerging Markets hitting 6M+ highs this AM.
The 10YY remains under pressure, hovering around the 2.5% level – Bernanke last week was very dovish in a series of quarter-million-dollar dinners with wealthy private investors — he speaks at 12:50 today in Dallas. We will also get fresh Manufacturing prints globally, as well as Home Sales data in US for April this week. The Yield Curve continues to flatten, so another headwind for US Banks. The Yen is popping to 2M highs against the $US, and the € has a bid into the ECB this week — knocking the DXY — a tailwind for commodities. Chinese headlines have metals mixed, with Ore hitting 20M lows, but Copper is up 1% – hitting new 2M highs. The Energy complex is well bid as Gunmen stormed Libya’s parliament on Sunday, with Brent and WTI up roughly 50bp. Catalysts are light today, with a decent sized POMO at 11 – Fed’s Williams (Dove) and Fisher (Big Hawk) speaking at 12:10 — While Bernanke speaks at 12:50 today.
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