Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about right now:
Good Morning! US Futures are starting out in a cheery mood, gaining 30bp and resting near overnight peaks. This follows a sea of green in Europe, where Dovish ECB reports have Europe’s equity markets on fire this AM. The DAX is up 1.5%, with every sector in the green, led by a 2% jump in Financials. Travel & Leisure names are recovering from yesterday’s smackdown, and Industrials are climbing 1.5%. The lone standout in Europe is Spain, which sees the IBEX off 70bp as shares in struggling Spanish renewable energy company Abengoa were suspended. In London, the FTSE is up 90bp, Reports of Autumn Statement new-homes plan lifts homebuilders to top of FTSE, while Miners continue their weakness on falling commodity prices. Over in Asia, Shanghai pops 90bp, led by smallcaps (ChiNext +3%) – Energy stocks outperform, while brokers were among loss leaders on Citic headlines. The Nikkei fell 40bp, India closed near unchanged, Aussie fell 60bp as banks and retailers retreat — while Emerging Markets closed mixed.
The US 10YY is off small this AM, as heavy buying in Bunds continues to drive sovereigns lower. Fed Funds rest at a 74% chance of liftoff, while that “Policy sensitive” 2YY is unchanged, resting near 5Y highs. The $ is having a strong morning as the Euro slides to 7-month low on a dovish ECB report, helping press the DXY thru that 100 level in early trade. Initially, the Yen had upward mojo on BOJ minutes showing a hawkish bent, but risk-takers have pressed the $/Y back up towards 123. We have some stability in the Russian Rouble and Turkish Lira after yesterday’s headlines. With the stronger $, commodities are weak across the board, as Metals resume their collapse led by a 1.4% drop in Copper, while Gold bugs will take solace the yellow metal is near unchanged. The Energy Complex is quite heavy this AM ahead of DoE at 10:30 today for Oil. Last night API showed a Crude build of 2.6M (expectations closer to 950k), with a Cushing build of 1.9M (Genscape was lookin for 2.24). Softs are mostly higher, with Corn and Wheat adding 50bp as the WSJ talks about heavy movement into grain storage.
We have heavy economic data ahead of us today, as many reports have been pulled forward due to the upcoming Holiday (Friday is a good settlement date) – Personal Income and Spending; PCE Deflator; Durable Goods Orders and Weekly Jobless Claims all at 8:30 — 9am brings the FHFA House Price Index, followed by Markit US Composite PMI at 9:45. At 10am we get New Home Sales for October and the U. of Mich. Sentiment. 10:30brings us that DOE data for Crude, ahead of a (early) 11:30 auction of $29B in 7Y notes. The Baker Hughes Rig Count is slated to be released at 1pm — and Natty Gas Contracts roll today. It’s quiet in Washington today, with the Senate and House in Recess, and Obama pardoning the national Thanksgiving turkey at 2:30.
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