REUTERS/Kai Pfaffenbach
Two traders talk with each other on the floor of the German bourse in Frankfurt on July 21, 1997.
Good Morning, and welcome to Quarter End! US Futures are starting on a upbeat tone, adding 40bp as the S&P has been stuck in a 40point range for last 5 weeks. EU Futures are mixed in light volume however, with Germany trading flat on volume 40% light to the 20day average. We have all kinds of stability in Emerging Markets, with Moscow up 1% as US and Russian counterparts meet - Turkey's Lira in rally mode after their election results, and FTSE's Emerging Market Index continuing it's 8 session winning streak - nearing unchanged on the year. Over in Asia, The Nikkei gained 1% as economic data posts light, buoying hopes of a accommodative BOJ as Japan's national sales tax goes up from 5% to 8% on Tuesday, expected to cause a big headwind for the economy. China was mixed, but Aussie gained 50bp on the back of the Miners jumping. Globally, Banks and Material stocks seem to have a nice tailwind, while there is some profit-taking in the Industrials. Into the last day of the month and Q - watch for rebalancing to continue as the Barclays Global Aggregate Bond Index outperformed the S&P by 2% YTD
The 10YY is 2bp higher, and testing the 2.75% level after getting back upside 50dma on Friday. There is heavy attention on the short-end of the curve, where selling in US 2Y paper has driven yields the widest from German 2Y paper in well over 1 year - this has the € higher despite weaker inflation data posted in EU ahead of ECB on Thursday. The DXY is weaker as the Yen and € are breaking higher, a nice Commodity tailwind. We have a nice bid in Silver, and Gold is posting a small gain, but failing to retake $1300/oz early. Copper is weaker on profit-taking, as last week say the biggest weekly gain in 6 months. The Endrgy Complex is weaker, with Natty dropping 1% on warmer weather patterns globally, and WTI is off small as Barron's cover opines on $75 Oil. Ahead of us today, we have ISM Milwaukee at 9, at 9:45 we get Chicago Purchasing Manager (9:40 for paying subscribers) - Annual Wholesale Inventory and Sales Revisions at 10, and the Dallas Fed data at 10:30.