JonesTrading’s Dave Lutz has this morning’s trader buzz..
Good Morning! With the DJIA Biggest weekly loss in 3 years behind us – US Futures are rebounding into Fed week, up 80bp as flows come in from Treasuries and Bunds. Europe is mostly green, as with Greece bouncing 2% (Elections this week, Syrza losing ground?) — but the FTSE is only up 30bp and DAX 25bp as miners remain in the red. With the Focus on Oil equities — still no real recovery in Dubai’s market, off 15% the last 3 sessions and closing near session lows. Over in Asia, Elections strengthened Abe’s hand in Japan, but it was a “Sell the News” as the Nikkei lost 1.5% in light volume. While Shanghai managed a 50bp pop, much of emerging Asia was under sharp pressure, with Malaysia and Thailand off 2%. Miners and Financials weighed in Aussie, and the Hostage Situation in Sydney smacked the A$ to 4Y lows.
The US 10YY is up 4bp to 2.12%, while Bund yields are just off session highs as Friday’s sharp rotation into Credit unwinds. No real impact from the French downgrade, and Greek Yields are 11bp tighter. The Euro is retreating from 1.25, and the Greenback is gaining against Yen, trying to get upside 119 in earlier trade. Equities like the stronger DXY, and even Commodities are higher despite the $US headwind. WTI was off 2.5% in early trading as UAE sees no cuts down to $US40, breaking as low as $US56.25 before rallying on headlines Libya and Nigeria are seeing supply disruptions — Brent up 1.5%, WTI 80bp ($US). Natty Gas is popping 2%, and AG commodities all higher as well. Gold, however, is in the red as German Inflation metrics make new lows (5Y Breakeven at -12bp!), and Indian Inflation comes in the lowest in 5+ years. Light on the Calendar today — We have Empire Manufacturing at 8:30, Industrial Production and Capacity Utilization at 9:15, NAHB Housing Market Index at 10. At 4pm today we get Net Long-term TIC Flows from the Treasury. Finally, it’s the 15th of the month, so is it a “Good Harbour” Day?