Via Dave Lutz at JonesTrading, here’s a brief guide to what traders are chatting about:
Good Morning! Spoos adding to their best gain since March 11th — up another 40bp in early trade and well above yesterday’s peaks. Nothing but green waves coming from Europe, with the DAX up 1.3% – Financials rallying across the continent as Greece seals a new debt deal, while energy companies are jumping. The FTSE is lagging, gaining only 60bp as Miners are under pressure on weaker metal prices — Volumes across Europe are better, with most exchanges trading 20-30% above recent trends. In Asia, Aussie jumped 1.5% as miners rallied, Nikkei rebounded 1.6% as the Yen broke lower. Shanghai lost 20bp, bucking the regional trend as consumer sentiment fell, while most EM Asian markets shrugged off the stronger $ to close well bid.
Treasury yields continue to trickle higher, with Fed Funds now at 34% chance of a hike in June, that “Policy sensitive” 2YY up another 1bp. The DXY is nearing 2M highs despite Sterling hitting 16week highs on ‘remain’ mojo, while the Renminbi fixed at a 5Y low against $. Germany’s IFO jumps to 9month high, but Euro can’t catch a bid — remaining just off yesterday’s floor. Headwinds for commodities with the better greenback, and we have Metals weak globally — Ore and Rebar off 2% in China, Gold 2M lows as $ jumps and haven trades unwind. Energy is moving in the opposite direction tho, as WTI nears $50 after API showed a massive 5.1mm draw last night. Softs are finally showing a slight bid after getting hit of late.
Busy day ahead of us, with US Advance Goods Trade Balance at 8:30, then Fed’s Harker Speaks at Forum in Philadelphia at 90 right when FHFA House Price Index hits. At 9:45 we get Markit US Services, then the Bank of Canada Rate Decision at 10. DOE data for Crude posts at 10:30 (API last night showed a 5.1M draw overall, with 189k coming out of Cushing. Gasoline grew 3.6M, but Distillate stocks lost 2.92mm). At 11:30, the US Treasury to sell $13B in 2Y floaters, just before Fed’s Kashkari Speaks on Energy and Monetary Policy at 11:40. Treasury then auctions $34 Bln 5-Year Notes at 1, right before Fed’s Kaplan Speaks at 2 — all 3 of the FOMC speakers today are non-voters in 2016.