Here's A Quick Guide To What Traders Are Chatting About Right Now
Good Morning! Animal spirits are en fuego, with the Russell Minis marked up 70bp, almost a double from S&P and NDX futures. A slew of factors: Hedges coming off against Fed and Scotland (Still too close to call, but "no" camp strengthened in final polls) / China makes a 2nd easing move this week, cutting Repo rates - WSJ says similar moves in the past have indicating broader easing / Kuroda said BOJ will continue to ease until 2% inflation stable, Yen breaking down / SNB slashes Swiss growth outlook / demand for the first ECB TLTRO was only €82.6B vs. expectations of ~ €135-150B - sparking QE hopes / Grey Market has BABA trading 30% above high end of range.
Overseas, the FTSE remains cautious heading into the Scotland Results (due 3amET Friday, but Nomura says prepare for a delay) - Sterling is up, but implied volatility on that British Pound is off the rails. Most of Europe is rallying 1% in very decent volume, the DAX trading 1.5x normal. No angst in French equities or Credit, despite chatter Moody's to downgrade tomorrow. Russia's MICEX is trying to bounce from yesterday's smackdown. In Asia, The Nikkei was focused on Yen and not Sony - Closed up 1%. China gained 30bp, but Hang Seng gave up most of yesterday's gains as the Chinese liquidity injection into the Banks is viewed as temporary for upcoming holiday-cash needs. Down in Aussie, the Miners weighed as the A$ fell and commodity prices are dropping overnight.
The US 10YY is nearing unchanged, after being off 2bp early, while that "policy-sensitive" 2YY is ticking near 3Y highs. Asians had the $ much stronger overnight, but we are watching it drift back as US and EU players emerge. Commodities are not enjoying the headwind - with Gold and Silver off 1%, and despite bullish headlines on supply cuts, the Oil complex remains in the red. Scheduled Catalysts today include Weekly Claims at 8:30, Fed's Yellen Speaks on Consumer Finance at 8:45, Philadelphia Fed at 10, a tiny POMO at 11, and a TIPs re-opening auction at 1. BABA prices tonight, trading ~30% higher in the gray market ($88/share) - and we should have results from Scotland starting around 7pmET.
Tomorrow brings a wild day of volume - We have a "Quad Witch" expiry (Futures and Index Options expire on Open, Single Stocks on the close) / We have a S&P and EuroStoxx rebalance / The Alerian MLP Indicies rebalance, along with the ARCA Gold Miners / Finally the S&P trades ex-dividend (SPY)….