JonesTrading’s Dave Lutz summarizes what traders are chatting about right now:
Good Morning! US Futures are mixed, with S&P unchanged but Russell giving back 25bp of yesterday’s “Good Harbour” driven outperformance. European markets are starting on good footing, led by a 40bp pop in the DAX as Banks and Industrials are in rally mode, offsetting sharp weakness in some materials shares. Over in Asia, the Nikkei retreated small despite $US/Y thru 117 as the Bank of Japan warned on low persistent inflation, while Shanghai fell again as flows from HKconnect wane off. While EM Asia is rallying again (Malaysia, Indonesia, Singapore all 50bp better), Aussie ended in the red, as Miners were under sharp pressure on the biggest fall in iron ore prices in almost six months — Ore falling to a fresh 5Y lows on concerns of China Growth
There is some selling of Treasuries and Bunds this AM as Russian headlines settle and the street gears for heavy corporate issuance and possibly “hawkish” FOMC Minutes. While the Yen is on 7Y lows against the $US, the GBP has a nice bid on BoE Minutes. Overall, the DXY is up small, causing a headwind for commodities, but most are in the green. Gold continues to rally, getting upside $US1200/oz for a time this AM, while industrially sensitive Copper is adding 50bp. Some Iraqi violence had an early bid under Brent, While WTI is struggling to stay green as (expected) heavy Oil Inventories and Thursday’s expiry weigh. Scheduled catalysts include Housing Starts and Permits at 8:30, DOE data for Crude at 10:30, and the FOMC Minutes at 2pm. FHFA Director Mel Watt to testify before the Senate Banking Committee, and throughout the day we will get headlines from the Sohn London Symposium
With Keystone Supporters Falling One Vote Short in 59-41 Tally, watch names like TRP, ENB, SU, CNRL, IMO, CVE and CNQ / Headwinds for REITS, as yields jumping and Paramount Prices Biggest U.S. REIT IPO (PGRE) / Uralkali continues to have problems, seeing the rally in POT and MOS again early / watch for continued weakness in WTI into tomorrow’s expiry, as DOE data may show heavy buildups of inventories / Watch for the continued shift in Miners, with Ore levered RIO, BHP and FMG sold — while Gold Miners continue to squeeze higher (NUGT in 42% in 3 days)
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