Dave Lutz of JonesTrading has the top topics about which traders are talking about today:
Good Morning, and Happy Friday! Equity Futures continue to rally led by a 50bp pop in Smallcaps, the spark starting after the European Credit close yesterday and continuing this AM – Hong Kong’s markets reopened after China’s National Day public break as pro-democracy protests continued in the city but remained peaceful. Hang Seng managed a solid close in the Green (rallying 2%+ from lows). Over in Europe, action was quieted by Germany’s Closure today, the best performing market is Spain, Gaining back 1% of the 3%+ smackdown they saw yesterday. Banks from London to Brussels are leading gains on the ECB’s asset buying plans, despite UBS under pressure on chatter of a $US6B French Fine. Ukraine seems to be creeping back up the headlines, with news this AM the Cease-Fire in Ukraine is getting shaky — could weigh on Euro sentiment. All the Asian markets turned round – when we left yesterday, Nikkei futures were off over 1.5% – they managed to close solidly in the green. Taiwan the standout performer, where Taiwan Financial Supervisory Commission Chairman William Tseng will announce measures to boost the stock market as early as next week — Down under, Banks led Aussie higher, it’s first weekly gain in 5.
US and German Yields are on session highs, as investors rotate back toward Equities, and the Greenback is making gains against majors into our NFP print at 8:30 — Keep an eye on the HY market — HY22 managed another solid performance last night, that sector continuing to see inflows post Bill-Gross news. The stronger dollar is a headwind for commodities, but we do see industrial commodities outperforming — Copper, Lumber higher and Silver > Gold. The Energy complex is mixed, with Crude Oil off another 60bp, while flows are moving into Natty (Ukraine), gaining 2%. Scheduled Catalysts today include Employment report and Trade data at 8:30, Markit US Services PMI at 9:45, followed by the official ISM print at 10. There is NO POMO at 11, and we get the Baker Hughes Rig Count at 1 ahead of “Commitment of Traders” data at 3:30. The Brazil Election First Round will be on Sunday 5th October and we will get results by 4am on Mondaymorning (local) as most of the voting is electronic.