Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about before the September jobs report drops.
Good Morning, and TGIF! US Futures are awakening in a good mood, with the S&P resting 40bp higher as we are awaiting Jobs data in US (Street at 201,000 — range of 149k to 256k). This follows a nice move upward in Europe, despite continued negative headlines on the Autos hitting VW for 2% — Frankfurt is adding 1.5% led by moves in Tech (Semis rallying on MU #s), materials and Industrials — but volume across the continent remains tepid. In London, eyes remain on Glencore which continues to hold yesterday’s bid on the back of insider buying. Over in Asia, the Nikkei consolidated the last 2 sessions gains, while Hong Kong reopened after a holiday to pop 3% led by a surge in Gaming Stocks on Chinese tourism commentary. China remains closed for the next few sessions, while profit-taking from the week’s move in Banks hit Aussie for 1.2%. Emerging markets traded cautiously into the NFP Number, with most staying within 25bp of the prior nights close in light volume.
The US 10YY is tracking towards yesterday’s peak of 2.07% as the street digests commentary from Fed’s Williams late last night saying “100,000 — 150,000 NFP gains is enough for me”. Fed Funds showing a December liftoff are ticking higher towards a 47% chance, while that “Policy Sensitive” 2YY tacks on small. The DXY rests near overnight highs, making solid gains against Euro — while that $US/Yen cross gets back upside of 120, and that “China Proxy” Aussie $US falls back towards 70c to the Greenback. We have decent FX headwind to commodities, and I see all the metals under pressure, save Copper, as Gold drifts toward a 2week low. The Energy complex is mixed, with Oil continuing to add to yesterday’s gains on signs of Chinese Demand, while that Natty Complex gets getting whacked on a huge build in US inventories.
The Main Event hits at 8:30 with the release of September Nonfarm Payrolls — ahead of the ISM New York release at 9:45 and US Factory Orders data at 10. The Energy complex will remains focused on the Baker Hughes Rig Count at 1 — with the release of CFTC’s “Commitment of Traders” data at 3:30. Boston Fed President Eric Rosengren opens his Conference today – Minneapolis Fed President Narayana Kocherlakota, Cleveland Fed President Loretta Mester, and Vice Chair Fischer are all slated to speak. Down in Washington, while the Senate and House are not in session — expect “fear mongering” headlines from Treasury’s Jack Lew at 8:15 — Last night he pulled forward the “Debt Ceiling” from early December to November 5th — offering little time for Congress to get their act together…