Thomson Reuters
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York
Good Morning, and Happy "Quad Witch" Friday! US Futures continue to move higher, gaining 25bp despite The Daily Sentiment Index (DSI) for S&P at 81% Bulls flashing overbought conditions. This mirrors higher markets overseas, which sees the DAX up 25bp as Banks are rebounding across Europe. Commodity stocks continue to rally, and the Discretionary sector is catching a bid as the Euro retraces its recent strength. In London, the FTSE is up 55bp on the back of Fins and Miners. Volumes are higher overseas, with most markets trading 20-30% above recent turnover. In Asia, Shanghai reached 1m highs as the Yuan jumps, Home Prices surged higher, and chatter increases PBOC may expand Margin Financing - Macau +8% was stronger on no specific news as beaten up names saw a bid - Nikkei was 1.3% weaker as yen strength weighed, and Aussie closed up small as commodity stocks rallied.
There is acute focus on JGBs, as Japan's 10-yr bond yield dropped to a record -0.13bp on dovish headers from the BOJ and a weaker reverse-auction. This is driving Germany's 10YY to 20bp, and has Treasuries languishing under 1.9% again this AM. The DXY is recovering from 5M lows as the Euro heads south as ECB's Praet hints at further cuts, while the Yen finally sees some weakness. Commodity currencies are under some slight pressure as the complex consolidates gains. China Iron Ore, Steel Futures leapt higher as Home Prices Surge, and has Copper and Silver higher despite the stringer $. Gold is seeing some profit-taking, losing 80bp. Focus remains on the Oil complex, and we have WTI stretching its legs above $40 early, adding another 2% to yesterday's rally into Expiration on Monday. Natty Gas continues to see covering, driving it closer to that $2 mark.
We have heavy volume ahead of us, as this Friday brings not only Options Expiration, but heavy rebalances (S&P, FTSE, DJ, MSCI), and a gaggle of ETFs going Ex. Divvy (Including SPY). At 8:30 we get Canadian CPI and Retail Sales, followed at 9 when Fed's Dudley Gives Opening Remarks at Supervision Conference. 10 brings us University of Michigan Survey, and at 11 Fed's Rosengren Speaks on a Panel. At 1pm we get the Baker Hughes Rig Count, and Fed's Bullard Speaks at Policy Forum in Frankfurt at 2pm. CFTC's "Commitment of Traders" data posts at 3:30 to close out the week.