In short:
- European stocks are under some pressure after six straight days of gains. US stock futures are also slightly lower.
- Treasury yields are higher following a speech from Richmond Fed President Jeffrey Lacker which argued that the case for an interest-rate hike is strong.
- Oil is up nearly 2% after data from the American Petroleum Institute on Tuesday showed a huge draw in inventories by 7.6 million barrels last week.
Here's Lutz:
Good Morning! US Futures are off small as investors digest the surge higher in Treasury and Bund Yields. Euro stocks under some pressure following six consecutive days of gains, with the DAX off 70bp - Energy Stocks acting well, Retailers love Tesco's #s and Banks are holding recent gains - but Yield-Proxies like telecommunications, utilities and real estate were among the biggest decliners. London is off 60bp, digesting a huge rally. Over in Asia, Japan's Topix popped 60bp as the Yen breaks lower - Financials were again steady along with Autos jumping over 2% - Aussie lost 60-bp as Miners fell, Emerging Markets halted a two-day rally and Hang Seng added 40bp, but Regional turnover remains light with China on Golden Week holiday.
Treasury and Bund yields holding near two-week highs on ECB Taper chatter and Hawkish headers from Lacker and Evans (Both Non-Voters) - Fed Funds remain at a recent high 61% chance of a December Hike. The $ is holding most of yesterday's gains, losing some ground to Euro despite weaker German data - Making gains against Aussie on falling Miners, and the Kiwi$ was smoked as Dairy prices dropped - Pound Sterling has may little effort to rally and "safety" pairs like Franc-Euro hold recent gains. Silver and Gold are tentatively bouncing - A huge draw from API showing -7.6M (Street looking for BUILD of 1.5M) has Oil up nearly 2%, and Despite a big Gasoline build, RBOB is higher as Matthew's track is evaluated.
Busy Day Ahead, with ADP Employment Change at 8:15 - Trade Data at 8:30 - Fed's Kashkari speaks at 9:30, just before Markit US Services PMI at 9:45. We get the Bank of England Bond-Buying Operation Results at 9:50 - then US Factory Orders at 10 - 10:30 brings DOE data for Crude, and at 1pm Fed's Lacker to Speak at Marshall University. In Washington, the House and Senate are in recess until after election. Could have some Single Stock Headlines hitting from Sohn San Francisco.