JonesTrading’s Dave Lutz has what traders are chatting about right now:
Good Morning! US Futures are starting slightly lower, being rejected from S&P50dma – mirroring some weaker markets overseas – EU stocks hit post stress-tests, The Bank Sector is under pressure, losing 2%, as Italian banks lose ground hitting the Italian market for 1.9%. The DAX is off 50bp, and volumes on the continent are running 30% heavier than last week’s quiet holiday sessions — Reminder that EU/UK Clocks rolled, so their markets close at 12:30ET for this week only. The other big news was from Brazil, where Rousseff Is Re-Elected Brazil’s President — EWZ is getting hit for 10% early — weighing on the EEM where it is a large component. Over in Asia, Russia’s MICEX is in rally mode, gaining 1% – while China and HK stocks weak as the Exchange link was not completed by today’s anticipated deadline. In Tokyo, the Nikkei gained 60bp off a heavy short-base, while Aussie jumped 90bp led by Fins — The only group in the red down under was the Miners…
The US 10YY was rejected from 2.3% overnight, while that “Policy Sensitive” 2YY continues to slide lower into the Fed’s Weds announcement — German Bunds have a bid as their IFO dropped to the lowest since December 2012, while despite the Fin concerns, the PIIGS credit market is acting quite well this AM. The DXY is mixed against majors — but we have WTI off over 1% as GS cuts Brent ($US85 from $US100) and WTI ($US75 from $US90) targets. Metals are mixed, with Gold under pressure gain, while Copper is slightly higher, while the AG complex looks to be under pressure to start the week. Scheduled catalysts today include Markit US Services PMI at 9:45, Pending Home Sales at 10, Dallas Fed at 10:30, and (potentially) the last POMO operation at 11. Earnings rolls – AGN, BEN, HUM, MRK, STX, and TEN are all pre-open while AMGN, AVB, CLF, CR, HIG, TMUS, TWTR, and XL are after the close
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