What Are Traders Chatting About Right Now? Metals...

JonesTrading’s Dave Lutz has a roundup of what traders are chatting about right now.

Good Morning! US Futures are tracking higher, led by Tech and Biotech — but liquidity is expected to be light as Credit markets in US and Europe are closed today to honour Veteran’s / Armistice Day commemorations. That said, Equity markets are trading well in Europe, with EuroStoxx up 60bp and the DAX climbing 40bp in heavier-than average volume. Financials are among your best performers, while globally commodity related industries remain under pressure — This was most evident in Asia, where Heavy falls in the biggest miners pushed Aussie lower as Citi slashes Ore targets to $US60/ton average. Shanghai retreated small from yesterday’s gap higher on the HK trading link date being set, while Japan jumped 2% to 7Y highs on multiple tailwinds (Falling Yen, unexpectedly large current account surplus, chatter early elections to be called, and reports Abe is delaying the next tax hike).

While Credit markets are closed, FX is trading — and the DXY is continuing yesterday’s strength, The Greenback broke through ¥116 against the yen for the first time since October 2007. The Ruble under big pressure again, as fears of cease fire coming to an end in Ukraine intensify. Metals are all under pressure, led by a 80bp drop in Copper, dragging Gold down again. We are seeing continued weakness in the Energy complex, with Brent touching 4Y lows and WTI trying to recover from being off over 1% overnight — while Natty Gas continues to retreat from the week long squeeze we saw on the shorts. The Grains and Beans are continuing yesterday’s pressure, despite the crop forecast being unexpectedly scaled back. It’s a Holiday, so we have no scheduled catalysts today save ICSC-Goldman Sachs Chain Store Sales Index at 7:45, and Johnson Redbook Retail Sales Index at 8:55 – U.S. Bond Markets are closed for Veterans Day / EU Bond Markets closed for Armistice Day

Some trades I’ll be watching today include Retailers, as “Singles Day” is a “Sell the News” for BABA — despite Alibaba selling more than 36.2 billion yuan ($US5.9 billion) of merchandise within 14 hours of the promotion kicking off, eclipsing last year’s record / Keep an eye on REITS – REITS outperformed the pop in Yields yesterday, and Overseas REITS are having a strong day, climbing 2.2% in Japan and 1.5% in London / Watch the Builders, as the #2 holding of the ITB reports (DHI, 10% weight) — ITB failed July peaks y’day — and of course keep an eye on the impact of the break lower in commodities, impacting Energy (XOP, XLE and OIH) — Metals (GDX/GDXJ) — and Grains/Beans (CROP, MOO, CORN)

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