Stifel Nicolaus’ Dave Lutz has a round up of what traders are talking about ahead of the opening bell.
Good Morning! Yesterday was the 6th consecutive rally in the S&P — The S&P had 4 six-day win streaks in ’13. One week and two weeks later was higher every single time. The VIX closes close to 13 — we will continue to see pops as people buy “Cheap” protection at the low end of the 12M range – Right now, however, Futures are starting on the back foot as comments from Japan’s Kuroda have the ¥ jumping. The DAX is off 30bp, but volumes remain very light (20% lower than average) as much of EU / UK and New England are on School Holidays. We do have some Ukraine Stress, with Russia’s Micex off 60bp (losses since Putin invaded Crimera are at 8%) as the rhetoric sharpens and the Geneva deal unravels. Over in Asia, the Nikkei did manage a 1% gain — but most focus was on China’s PMI coming in light, hitting Hong Kong for 1% and pressing Emerging Markets lower. Aussie’s market reacted to the Aussie $US hit sharply on a low inflation print — gaining 70bp, but Miners were the laggers again. Focus in the US on Earnings — as GILD is bid higher pre-market (9% of IBB) — we have BA, BIIB, DAL, DOW, DPS, EMC, GD, NOC, NSC, PG pre-open while AAPL, CTXS, ETFC, FB, LRCX, QCOM, TXN, and XLNX are after the bell.
US Yields are testing overnight lows, as the 10YY failed to stay upside 200dma yesterday, but remains in 20bp range we have seen for the last 3 months. We have a record Junk Bond Offering today — so watch how “funding trades” could skew other areas of Credit. Kuroda saying Japanese inflation above BOJ forecast has the ¥ jumping, and a stronger PMI has the € popping as well. The falling DXY is a tailwind for commodities, but the Weak China PMI print weighs on Copper — but we do have Gold bouncing from a multi-month low. WTI is lagging Brent as Russia buoys the European Benchmark — and API data showed a nice build ahead of DOE numbers at 10:30 today. Catalysts scheduled today includes the AIA’s Architecture Billings Index for March — at 9:45 we get Markit US Manufacturing PMI, at 10 we get New Home Sales for March — DOE data is at 10:30, we have a decent size POMO at 11, and 1pm brings the Auction of $US35 Bln 5-Year Notes