Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about on Monday morning:
Good Morning! US Futures are lower, but off their worst levels of the overnight. The S&P is marked 10bp in the red as we kick off this Thanksgiving week – It may be a short one, but this week there are 25 economic indicators from Monday through Wednesday alone. Oil and gas firms lead declines in Europe, which sees the DAX off 15bp, rallying sharply n the last 15min as headlines “Saudi Ready to Cooperate With OPEC, Non-OPEC for Stable Prices” has caused the selling in the Crude Complex to reverse. London is under some decent pressure, with the FTSE off 40bp as the Miners are getting whacked due to weakness in the underlying commodities this AM. Volumes across the continent are muted, with most major markets trading 10-30% light to normal trends. Over in Asia, Shanghai lost 50bp as Energy groups rolled lower, dilution concerns as regulators have authorised 10 IPO’s to go ahead, and a doubling of margin requirements weighted – Hong Kong lost 40bp on angst about the brokers and Casinos due to corruption crackdowns, while Aussie climbed 40bp on Woolworth chatter and Markets in Japan were closed for a holiday.
The US 10YY is testing overnight highs near 2.29%, while Fed Funds have moved hawkishly — putting the odds at 70% that the Fed lifts off next month as San Francisco Fed’s Williams was hawkish over the weekend. Diverging policies weighed on Euro, which tested 1.06 in the overnight, while commodity currencies like the Kiwi$, Aussie$ and Canadian $US all getting hit as Metal prices are sliding to multi-year lows. This had the DXY closing in on fresh 12Y highs, nearing a 100 test in the overnight. While the Oil complex has bounced 2%+ off lows, it still remains in the red — and metals are ugly – Nickel is off 5% (12Y Lows) and Copper 2% (6Y lows) — Gold is off almost 1% and nearing a test of recent 6Y lows. The strong $US even weighs on the softs, which see Cotton, Cocoa and Soy all 1%+ lower.
Today at 8:30 we get the Chicago Fed Nat Activity Index, followed by Markit US Manufacturing PMI at 9:45. We get a slew of Homebuilder headers this week, starting with Existing Home Sales for October at 10am. At 1pm the US Treasury is scheduled to auction $US26B in 2Y notes. Down in Washington, the Senate and House are in recess, but the Fed Board of Governors holds a regularly scheduled closed door meeting this morning at 11:30 am — and at 3pm Energy Sec. Ernest Moniz delivers remarks to announce “a significant Energy Department investment in cutting-edge energy technologies”.
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