It’s a rainy morning here in New York City, just one day before the big October jobs report. Via Dave Lutz of JonesTrading, here’s a quick guide to what traders are chatting about this morning.
Good Morning! US Futures are basically flat, The BOE just announced no change in their policy, as expected – we now await the ECB decision (most analysts expecting the ECB to hold interest rates at record lows and refrain from introducing any major new easing measures) — Euro Stoxx are mixed in average volume, as traders await the announcement – Banks among worst EU performers, while retailers were outperforming on #s. Looking over in Asia, Russia’s Micex is up 1.5% as Oil continues to stabilise, but the Russian ruble continued its recent slide, hitting a fresh all-time low. Japan was off 90bp in profit taking — Hang Send lost small again, and China was up 20bp. Aussie closed in the red – Iron-ore prices sank to a near five-and-a-half year low as China Tries to Cut Pollution Ahead of APEC Forum — this killed Aussie Miners, led by a 9% drop in Fortescue Metals.
German Yields are slightly higher, but US yields unch as we await multiple FOMC speakers today. Despite light factory orders from Germany, some position squaring finds the Euro making gains against the $US, while USDJPY retreated from Y115.4 overnight. With the weaker dollar, we have a tailwind to commodities, but most rest in the red. Growth metals like Silver and Copper are under pressure, as OECD cut global growth forecasts and China retreats into APEC — WTI and Brent are both in the red, despite Gunmen seizing Libya’s major Sharara oilfield , as expanded Russian sanctions and US exports loom, while Natty Gas continues its upward trajectory, adding small to its 10% gain over the last week. There was heavy pain in Gold yesterday on reports of a collapse of Asian buying — and the Yellow metal is showing little life this AM.
We have a few Deals on the tape (Over $US5B worth) which are helping sentiment — along with TSLA and WFMI higher on #s, but the main catalyst is the ECB today. Yesterday saw the Utilities gaining strong globally, as possible GPIF buying was causing the shorts to cover despite LO profit-taking. I keep focusing on the Homebuilders, as the ITB closed near its 200dma for its 10th session in a row yesterday. For those in Transports, watch the rotation from Airlines back towards Rails if the Oil patch catches a bid. The High Beta names were hit sharply yesterday (Profit-taking + Einhorn), but many names like TSLA, GPRO, FEYE, GILD are all bid higher this morning. Other Scheduled Catalysts today include Challenger Job Cuts at 7:30, At 7:45 we have the ECB decision, followed by the Draghi and weekly US claims at 8:30 – Fed’s Evans speaks at 10:40, and Fed’s Mester Speaks on Forward Guidance after the Close.