Dave Lutz of Stifel, Nicolaus reveals the topics that he’s talking about this morning.
Mostly it’s pretty quiet, but the story is the restabilization in markets, and the rally across the world.
Good Morning – US Futures playing catch-up from the Monday holiday – with the SPX adding 70bp early. Today, the DJIA is going for 20 straight positive Tuesdays. Euro markets are stong, with the DAX adding over 1%, EU Fins jumping 2.5% as Italian and Spanish yields drop as Der Spiegel highlights the German about-face on Austerity. The Nikkei rebounded 1.2% from a weak AM session as An auction of 20-year JGBs found a lukewarm reception ahead of Kuroda’s speech tonight and a BOJ meeting with market participants tomorrow (focusing on Bond Market Volatility?) . Shanghai added 1.2% as New home sales in Shanghai rebounded and average prices fell last week, and the Aussie markets added small, but the Miners are lagging in the global rally.
The US 10YY is nearing a fresh 1Y high this AM, with yields nearing 2.05%. Japan’s 10YY have resumed their climb, closing above 90bp for the first time in over a year. The Yen initially was much weaker this AM, but has recovered some, and the DXY has failed upside 84 a few times in the overnight, and is nearing unchanged on the session. That said, we have a bid under industrial commodities, with Copper the best performing metal, and the Crude Complex jumping. Important to note Brent is 1% better than WTI right now, as headlines persist on Syria’s use of Chemical Weapons (McCain visited rebels this weekend) – and Iran moving long-range missile launchers in place ahead of their elections next month. Attention also shifts to the possibility of OPEC cutting production quota at their meeting this Friday as US Shale is negatively impacting most African Grades..