JonesTrading’s Dave Lutz has a rundown of what traders are talking about right now.
Good Morning! Futures are starting higher, with Nasdaq and S&P adding 25bp on the back of strong markets overseas. Europe has added 1%, and the DAX 70bp, as EU Banks are extending Friday’s Draghi gains — SX7E up 6% in 2 days. Germany’s IFO comes in better, following last week’s better ZEW, so the EU Consumer issues are having a good day. Despite this being a Holiday week, Volumes are impressive, with Germany trading 40% heavy to recent trends. The only major market in the red is the FTSE, as Miners are retracing 2% from yesterday’s surge higher. Over in Asia, Japan was closed for Holiday, but Hong Kong and Shanghai leap almost 2% on Friday’s Easing move from China. India’s Sensex hit a new record, while Aussie is up 1% as Ore Miners are jumping 4%. (Unlike UK listed Miners, this is the Aussie Miner’s first chance to react to China’s new Friday, which came after the Aussie Close.)
The US and German 10YYs are up 1-2bp this AM, but money continues to flow into Peripheral issues, with the PIIGs yields all tighter to Bunds. The Greenback is jumping against Yen this AM, but losing some ground to Euro as the German data sparks some covering in Euros. Overall, the DXY is in the Red and testing overnight lows — a tailwind for commodities. The main commodity focus for the week rests on Oil, as Global powers try and get a Iranian Nuke deal done before tonight’s deadline (would unlock heavy supplies) ahead of OPEC this Thursday. Chatter Iran looking for a 1mil cut still not helping Brent or WTI, with both benchmarks off 40bp this AM. Natty Gas is getting smoked this AM, off 5% as the weather warms in America, while Gold continues to languish below $US1200/oz. Scheduled Catalysts today include Chicago Fed at 8:30, at 9:30 the ECB Announces Covered-Bond Purchases, at 9:45 we get Markit US Services PMI, Dallas Fed at 10:30, and a $US28B, 2Y auction at 1
We have some headline risk today — A Iranian Nuke deal may hit oil, knocking OIH, and XOP — while we await word from the Grand Jury in Ferguson (Guns and Ammo Impact). Holiday sales are in full swing into Thanksgiving, watch a run of retailers this week, making next Monday’s Black Friday/Cyber Monday sales numbers a “Sell the News Event” — Builders remain in focus, with heavy data due, but with the ITB up 9% in November — may take a very strong showing not to spark profit-taking. With Thanksgiving fast approaching, watch for volumes to deteriorate into Thursday as Wall Street attempts to get a early jump on Holiday Traffic.