Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about before the markets open:
Good Morning, and the bears are hoping it’s “Turnaround Tuesday” as the S&P tries to add to its first five-session winning streak this year — Right now the going looks tough for shorts, as US Futures are well off lows on the back of “Buy the Bad Earnings” from DD (plus CEO change), and M&A (PMCS/SWKS in Semis, LGF/STRZA in Media, ABC/PMHC in HC). US Futures are off 30bp as the shorts target Biotech — IBB offered down 2% on ILMN. Over in Europe, the markets all opened weaker, but have managed to rally into the green — with the DAX up 50bp in very light trade. Consumer Discretionary rebounding on the back of Autos, but ugly manufacturing data out of Germany weighs on those Industrial and Financial Sectors. The FTSE is in the red, Miners weigh in London, led by GLEN retracing some recent gains. Over in Asia, the Shanghai remains closed — The Nikkei added 1% as doves circle over Tokyo into 2 BOJ meetings this month, Miners propelled Aussie into the Green late in the session, and aside from Hong Kong — all Asian exchanges closed green, including ~1%+ moves in many of the Emerging Markets.
The US 10YY is off small, being rejected from the 2.05% level a few times overnight, while all focus is on the very front-end of the curve, where Treasury Bills are trading at Negative yield as investors prepare for the Three Ring Circus down in Washington. There will be heavy focus in HY today, which yesterday saw massive short-covering action led by activity in HYG and JNK. The Greenback is slightly weaker against the basket as Euro makes headway above 1.12, and Aussie pops over 71c as their central bank held rates as widely expected. The Yen is seeing a bit of strength into BOJ tonight (Nothing expected, doves focused on Oct 30 meet). We are seeing a retracement from the sharp levered buying in many commodities, with Copper falling 70bp and Gold struggling to hold a tentative bid despite UBS cheerleading. The Oil Complex remains in focus with WTI off small into Inventory data tonight, while all those “softs” are mixed.
We do have a handful of market-moving catalysts scheduled today, starting with the US Trade Balance at 8:30, followed by the Fed’s George Keynote speaking at Event in Chicago at 9:15. At 1pm, the US Treasury auctions off $US24B in 3Y paper, right when ECB President Mario Draghi Speaks in Frankfurt. After the close tonight, we get that API data for Crude, Gasoline and Distillates at 4:30, ahead of Fed’s Williams giving a Outlook Speech in San Francisco at 5:30. Down in Washington, the Senate Energy and Natural Resources Cmte holds hearing on modernization of Strategic Petroleum Reserve at 10:30, and at 2pm the Full House will debate H.R. 3510, Dept of Homeland Security Cybersecurity Strategy Act of 2015.