REUTERS/ Mick Tsikas
Good Morning! US Futures are higher this AM, with the SPX adding 45bp as DC's closure seems to accelerate hopes that a Debt Ceiling deal will get done - Many think the negative press today increases the odds of a Debt Ceiling deal as the "heat is on" - Overseas markets are upbeat as well, with the DAX adding 70bp as the EU fins tack on over 1% - Risk remains though for equity bulls in Europe, as Italy's yields are blowing wider again today, but still below yesterday's stress wides. In Asia, Nikkei surged on a stronger Tankan, but profit taking hit as Abe announced his Corporate Tax Plans - EM is rallying as we got bullish data from Turkey, Indonesia and India - The Sensex added 70bp, and Thailand leapt almost 2%. China remains closed for Holiday.
For the last 2 years, the first of the month has brought a huge ETF rebalance - typically Selling IWM, UWM, IVV, SSO and buying UST, IEI. Since May, the S&P has rallied on the first session of the month - We get Auto Sales figures throughout the session today, and US PMI at 9am, and Manufacturing data at 10. There is some chatter in the marketplace of a early release of Friday's Jobs report (as soon as today) - but more articles saying it will be delayed. US Treasuries are weaker, despite the stress coming from the PIIGs debt - and the DXY was whacked sharply after midnight's shutdown deadline, providing a tailwind for commodities - We see WTI rallying slightly from 3M lows - while Industrial commodities like Copper and Brent remains under pressure on concerns Washington antics will spark a broader economic slowdown - Gold has a slight bid to it as India's imports jump back, but Silver underperforms on the Industrial concerns.