JonesTrading’s Dave Lutz has a roundup of what traders are chatting about right now.
Good Morning! Last week’s Growth concerns worsened over the weekend, driving the MSCI EM index to 6week lows as China’s Fin Min signaled no major Stimulus coming at G20, and Japan seems intent on raising the consumption tax again — all eyes are on China’s PMI print tonight. Ukraine headlines worsened, but the Cease Fire holds — there is angst ahead of EU’s PMI print tomorrow, along with Germany’s IFO later in the week. Russell Minis off 80bp — but were off sharply earlier this AM, but a slew of M&A headlines have helped them recover: (Merck / SIAL $US17B – Siemens / DRC $US8B — CLX rejected a bid — and EMC seeks a partner (HPQ, DELL, CSCO, ORCL mentioned). S&P Futures are 30bp, DAX near unchanged — but the FTSE is off 80bp as Tesco shares lose near 10%. Volumes in Europe look quiet, most markets trading 25% light to average. Over in Asia, Shanghai was off 1.7% (Growth, Heavy IPOs, Golden Week Upcoming), and some BABA proxy trades were hit in Asia — Softbank lost 4%, Tencent 3%, YHOO is off another 2% (multiple downgrades).
Commodities retreating sharply, Combination of Growth and that ripping USD. We are seeing a large disparity in Yen crosses, as money flows from commodity heavy A$ towards the USD. Copper is off 1.6%, and Silver is hitting fresh 4Y lows, Ore 5Y lows. We are seeing a lift in WTI as we roll into Expiry today, but Brent is off 60bp. Scheduled catalysts today include Chicago Fed Nat Activity Index at 8:30, ECB’s Draghi Speaks at 9 — US Existing Home Sales and EU Consumer Confidence at 10 – Fed’s Dudley (Dove) Speaks at 10:05 — there is NO POMO at 11, and tonight Kocherlakota (Dovish) Speaks at 7:30.