Dave Lutz of Stifel, Nicolaus talks about the big things traders are talking about today:
Good Morning! US Futures are slightly higher, but off best levels as E-Minis failed 1840 overnight. Headlines from the G20 are equity supportive over the weekend, as they shift from Austerity to growth, while blessing the BOJ’s easing operations as ECB’s Draghi sparks a dovish tone into their next meeting. Focus remains on EM, where Ukraine is in rally mode on bailout indications – which has CDS dropping for all the EM markets on my monitor. UK/European markets are mixed this AM, with the FTSE under pressure as HSBC is hit (#s) – The DAX is off small, but volumes there are almost 30% below recent averages. The EU fins are in rally mode, as Spain is upgraded by Moody’s, and Soros indicates he’s a buyer of the sector. In Asia, Japan was off small – but Shanghai posts it’s biggest loss in 2 months as concerns about a cooling property market weighed. While ever sector in China was under pressure, globally Banks staged a decent overnight, Industrials in Germany outperformed (better Ifo), and the miners down under continue their recent outperformance.
The 10YY is lower in the US, and back below the 100dma, despite headlines from FT and Barron’s about the “cooling” sentiment towards the bond market. While the Yen has a slight bid, the $ is in rally mode against € (Draghi Comments as EU’s CPI prints weak). With the DXY flat, no impact on commodities- but fresh “polar vortex” headlines has Nat Gas surging 5% into Wednesday’s expiry as traders scramble to get inventory for March delivery. The G20 growth headers have a bid under metals – with Silver adding 1.4% and gold hitting 4month peaks. Copper is having it’s worst day in a month on headlines from China talking reduced credit for housing. Coffee remains in moonshot, adding another 3% (up 55% over the last week) as Brazil drought continues the upward momentum. Scheduled Catalysts today include Chicago and Dallas Fed at 8:30, Greenspan Speaks at 8:45, a decent size POMO at 11 – and EM eyes will be on Brazil’s Trade Balance at 1. This week brings Multiple Fed Speakers, including Yellen at Senate; Heavy Japan Data – PMI, Employment, CPI, Retail, IP, Housing; Housing Data – Case Shiller, New and Pending Home Sales; the Monthly Russell Rebalance, and the MSCI Quarterly Review on Friday, ahead of China Manufacturing late Friday night