Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about before the bell rings on Wednesday.
Good Morning! US Futures are jumping 1.3%, following strong upward moves overseas. No main Catalyst for the action, with VW up 3% and GLEN rebounding 10% – most reports cite “bargain hunting” and “Window Dressing” into the Q3 quarter end. The DAX is gaining 2.7% as Tech, Fins, Discretionary all jump higher, and the FTSE is up over 2% – I’m not seeing any major sector over in Europe in the red this AM — but volumes are not overly impressive. It was a good session in Asia, with Shanghai adding 50bp in quiet trade ahead of their “Golden Week” holiday, which sees mainland markets closed for the next week. Hong Kong leapt higher, propelled by a 10% jump in Autos as China cuts purchase taxes. The Nikkei added 2.7%, rebounding from yesterday’s smackdown — and Aussie climbed 2% on the mack of strong action in Banks and Miners. All the emerging markets ended well bid, including Thailand, which saw a huge drop in Exports due to China’s slowdown.
The US 10YY is rallying, but still remains under that “key” 200dma resistance at 2.12%. The DXY is higher, but well off the best levels of the session — making gains against Euro as Europe slips back into deflation — and Yen as investors embrace leverage, sending the $US/Yen “Carry Trade” back over 120. With the Stronger $US, we have a headwind for commodities — but the complex is in honeybadger mode — led by Industrial metals like Copper and Nickel jumping 2.5%+, and a bid across the board in all the softs. The Oil complex is nearing unchanged, despite a massive build in US Inventory data reported by API last night. Natty Gas is off small as investors ponder the massive rainfall headed for the US East Coast.
We have a full slate of Catalysts today, kicking off with Fed’s Dudley at 8, just ahead of the ADP Employment at 8:15. At 9 we get ISM Milwaukee, followed at 9:45 with the Chicago Purchasing Manager report (Released 9:42 to subscribers). IMF Managing Director Christine Lagarde will do her best to scare the Fed and EM investors at 10:30 — right when that DOE data for the Crude Complex hits. At high noon, we get the USDA 3Q Grain Stocks Report — and the main attraction at 3pm will be Fed’s Yellen speaking on Community Banking in St. Louis. Tonight at 8pm Fed’s Brainard speaks. We will be getting a slew of activist headlines throughout the day as the Ira Sohn conference in Canada gets going full speed. While there is a pile of meetings down in Washington — Investors will be focused on the progress of the Government Spending Bill — the current authorization due to end at midnight tonight.
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