Dave Lutz of Stifel, Nicolaus has today’s trader talk:
US Futures are starting on the back foot, off almost 50bp and near overnight Lows. Several reasons for the weakness — Ukraine angst building, Chinese Manufacturing disappoints, Persistent Bond Bid, protection buying into this week’s catalysts (Big ones Yellen on Weds, ECB and BoE on Thursday) — all in light liquidity – Euro Markets seeing very light volumes today ahead of ECB this Thursday as FTSE and Nikkei closed for Holiday. The Euro markets are taking the worst of the Ukraine angst, with the DAX off over 1.5% – so US markets may see a reversal of pressure around the EU close (trend we note when angst builds overseas) – The Chinese markets traded quiet, but that HSBC manufacturing report drove Hong Kong off 1.5%. Aussie markets closed slightly higher on the back of short-covering in the mining sector. The Momentum stocks in the US are starting on the back foot, with SPWR, SINA, TWTR (Lockup expiry), YELP and DDD all off 1.2%+. Notable earnings today include OXY, PFE, SYY, TSN before the open — and AIG, APC, and VNO after the bell.
The 10YY is nearing October lows as it tests the bottom of the range — Great article out discussing the scarcity of Treasuries right when Pension purchases are ramping due to taxation changes. Both the Yen and Euro arew stronger to the $US, causing a tailwind for commodsities this AM. Gold nearing 1M high (Despite EU slashing inflation forecasts) and Wheat 1Y highs on Ukraine, but interesting that Brent is in the red despite the sharp drop reported in Libya production. Keep an eye on Copper — rolling back over on the weak Chinese data and eyeballing another $US300 test. The main catalysts today include headlines from the Ira Sohn Conference – US Services PMI at 9:45, ISM Services at 10, and a $US2.25 – $US2.75 billion POMO Operation.
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