Good morning and welcome to October and the fourth quarter of 2014.
Via Dave Lutz of JonesTrading, here’s a quick guide to what traders are talking about this morning.
Good Morning! US Futures are starting Q4 slightly weaker, as global PMI data coupled with increased protests in Hong Kong are sparking further growth concerns. While Russell is basically unchanged, NDX futures off 20bp as some high-beta tech issues retreat. While we get Auto data today, focus on the Airlines with AAL, DAL and JBLU all off 2.5%+ as the first US case of Ebola is discovered in Texas (TKMR +34% right now). Stocks are mixed in Europe in decent volume, with FTSE losing 50bp as Miners get hit, EU Stoxx off 20bp on Airline weakness — but doves are bidding up the DAX slightly as German PMI showed a dip back to contraction, sparking hopes into the ECB tomorrow. Best market in Europe is Greece, Athens up 2%+ and their yields sharply tighter as Draghi is pushing for ECB to accept Greek and Cypriot junk loans. In Asia, China and HK closed for Holiday, but Nikkei lost 60bp and South Korea lost 1.4% as Technology shares continue to see sellers. Best market in Asia was Aussie, bouncing on weaker A$ helping exporters and steadier data out of China
The US 10YY is under pressure as there is heavy demand for Bunds in Germany — German 10’s are yielding a 2week low 92bp and Germany 2’s are nearing a record low of -9bp. Here in the US our policy sensitive 2-year US Treasury yield is down 1 basis point to 0.57 per cent, but only a couple of basis points below its highest level in three years. The $US is jumping again as weak PMI drives Euro lower, and Yen gets hit thru Y110 for the first time since August 2008 on a disappointing Tankan survey. Despite the headwind, most commodities are bouncing after yesterday’s Q-End markdown, with Copper back up 1% and WTI up 50bp ahead of Inventory data. Into Auto Sales today, we are seeing sharp weakness in Platinum dropping to a 5Y low on demand concerns. Scheduled catalysts today include ADP Employment at 8:15, Markit US Manufacturing PMI at 9:45, followed by the official ISM report at 10, DOE data for Crude at 10:30, and there is NO POMO at 11. Throughout the session we will be getting Domestic Auto Industry Sales