Stifel Nicolaus’ Dave Lutz has a roundup of what traders are chatting about ahead of the U.S. opening bell.
Good Morning! US Futures are slightly higher, led by Nasdaq popping 25bp. Many traders are watching leadership from Semis — The SOX closed just off a 12Y high. Overseas markets are up slightly, showing a bounce of the “dead cat” variety as sanctions against Russia are getting closer to reality with this weekend’s Crimera vote. The DAX is adding 12bp only, and has been a sharp underperformer since the start of March, losing 5% relative to the S&P’s 50bp gain (big shift in ETF flows). Russia continues to weaken, with the Micex now testing 3Y lows this AM as rhetoric sharpens with the Ukraine PM meeting UN General Assembly Today. We are seeing some stress coming off Ukraine CDS as a aid package nears, and a bounce in Turkey’s markets — a nice reprieve of the weakness seen into elections later this month. In Asia, China data missed market expectations on every metric, confirming a sharp slowdown to start 2014 — but hopes of a dovish PBoC lifted the Shanghai by 1%. The Nikkei was off small, but Japan’s bonds were drilled after BOJ said it would trim purchases. Aussie is rallying on strong jobs figures, the best month in over a year, and the Miners are jumping 2%. Retail will be a big focus in the USA, with the release of February Advance Retail Sales — Bad numbers will surely be ignored due to the “Weather Skew”.
The 10YY is flat in the USA, remaining below the 100dma. The € is at the highest since Oct 2011 as German finance minister Wolfgang Schäuble’s comments that rates are too low continue to reverberate, and the Yen is bid as Japanese core machinery orders rose in January at the fastest pace in almost a year. The DXY is now just off last October’s 1Y lows, providing a tailwind for commodities. While Gold rests near 6M highs, Industrial commodities are mostly mixed despite the China data — Copper is slightly red, and WTI is bouncing 30bp after the worst session in 2 months. Nat gas in the US is weaker into our inventory data, and the AG complex is all well bid as traders account for the possibility of sanctions, coupled with lower global agriculture yields. Catalysts today include the release of US Retail Sales for February at 8:30, alond with weekly Jobless claims. At 10, we get Business Inventories — and the Senate Banking Nomination Hearing for Fischer, Brainard, and Powell. Energy players will be focused on Natty data at 10:30, and we have the week’s largests POMO at 11. At 1 we get the 30Y auction, yesterday’s 10Y auction was the strongest in a year. Finally, also at 1, ECB President Draghi Speaks in Vienna.