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Traders work on the floor of the New York Stock Exchange
Good Morning! US Futures are retreating slightly, despite headlines of some major M&A (WY for PCL in a $8B+ deal, and APA shares jumping as headlines put them in play) - While the S&P is off 30bp, we are seeing a continuation of last week's themes early - with Russell outperforming by 10bp. Over in Europe, markets are all lower, with the DAX off 35bp in very light trade (35% below recent trends) as Healthcare and Consumer Discretionary fall under pressure. The FTSE is outperforming, trading near unch despite weakness in the miners - as financial stocks are outperforming on market reaction to proposals from the Financial Stability Board. Over in Asia, China shares gained 1.6% as Banks jumped on a successful Hong Kong IPO of China International Capital Corp - The Nikkei jumped nearly 2% in heavy volume as the Yen dropped - but Aussie was smacked for nearly 2% as BHP Billiton's shares hit 7-year lows - While Emerging Markets were full of angst with Thailand, South Korea and the Philippines all hit for almost 1%.
The US 10YY has moved above Friday's peaks to yield 2.35%, while that "Policy Sensitive" 2YY is up another 1bp as those Fed Funds project a 68% chance of a December liftoff. Euro credit traders are watching PIIGS paper, as Portuguese and Spain yields move higher on Political headlines in the countries, while Greece's paper has not reacted to the ECB denying a bailout tranche ahead of Eurogroup meetings this week. The DXY is retreating from multi-year highs this AM, with Euro, Yen and A$ all making gains - and that weakness is helping propel Gold off multi-month lows, but other metals remain firmly in the red. The Energy Complex is rebounding slightly from Friday's hit, as OPEC/Saudi headlines help WTI rally nearly 2% early. Softs are mixed, with Wheat under pressure as traders' book profits from last week's gains.
Ahead of us today, we have the Labor Market Conditions Index Change at 10, 3M and 6M Bill Auctions at 11:30 just before Fed's Rosengren Speaks on Outlook for U.S. Economy at 12. At 1pm the US Treasury will auction off $24B in 3Y notes. Down in Washington, The Supreme Court issues orders at 9:30am - and President Obama meets with Israeli Prime Minister Benjamin Netanyahu at 10:30. This week brings us 7 FOMC speakers - 6 of them on Thursday, "Singles day" (The World's largest Online Shopping Day) - Advance Retail Sales for October, 16 Sellside Conferences and Veterans Day Sees Banks and Bond Markets closed in America on Wednesday(equities normal hours).