Dave Lutz of Stifel Nicolaus has a roundup of what traders are chatting about ahead of the U.S. market open:
Good Morning! US Futures are off 50bp, and trading on overnight lows as the E-minis gravitate towards a 50dma test despite a $US44B merger on the tape. We can blame angst over retail sales, poor weather slowing US growth, weak global jobs numbers — but it’s all about the Yen, which is jumping to 1week+ highs against major FX (Japan’s manufactured goods price index outperformed, showing Abenomics working) — and some profit taking after the rally we have seen. Expect light volumes today, as the Eastern Seaboard is getting slammed with weather ahead of a 3 day weekend. Over in Europe, the DAX is off 40bp in average volume — but the EU fins are seeing profit taking, with the group off 2% as Greek yields are spiking on a terrible jobs report. In Asia, the Nikkei was hit for almost 2% as the Yen jumped, but in light trading. China was off 50bp, but India was whacked for 1.3% ahead of a budget announcement next week. Aussie was flat, but the A$ was crushed on terrible jobs data. EM ius showing weakness, with some stress evident in Ukraine, South Africa, and Turkey — Keep an eye on the EEM today, it is offered down almost 2% early. Retail will be a key group today, with Advance Retail Sales for January due — which everyone knows will be a ugly print, and the Gold Miners are in focus, as the 2 largest members of the GDX report this AM.
The 10YY is flat, but the 30Y has a bid into the 1pm auction today — despite headlines saying there will be lackluster demand for the worst performing part of US Government debt this month — The key treasury catalyst, Yellen’s Testimony in front of the Senate, was cancelled due to Snow. Both € and Yen are well bid against the Dollar — so we have a natural headwind for commodities. Industrial metals are retreating after China’s export projections were released, while the Oil complex is weaker as the IEA encourages OPEC to continue pumping to replenish depleted global stocks. Nat Gas is jumping again, adding 3% (18% jump in 5 days) as the US is clobbered with weather, a leading think-tank in China shows the need for increased Natty consumption, and expectations mount for a massive drawdown in DOE data today. We get weekly Claims data and Advance Retail sales at 8:30, Business Inventories at 10 — DOE data for Natty at 10:30 — there is NO POMO at 11 — and we have the $US16B, 30Y auction at 1