What Are Traders Chatting About Right Now? The Tailwinds...
Good Morning! US Futures are off small, giving back 15bp of Friday's rally higher. We will see how long that lasts, as multiple tailwinds are blowing: The $/¥ has gone vertical thru 113, Nikkei futures up 5% from Friday's close (They have Holiday today); Heavy M&A headlines as Publicis Offers $3.7 Billion for Sapient, Altice Offers $8.8 Billion for PT Portugal, LH $6B deal for CVD; and Seasonality - Over the past 100 years, the best three-month stretch for stocks has been November through January. Over in Europe, the DAX is off 50bp in very light volumes as we enter ECB week, where expectations of any follow-through from the BOJ are minimal. Industrials are among the main laggers in Germany, where PMI comes in a hair light, and Ukraine - Russia seems to be destabilizing, with Rebel elections held over the weekend - sparking further growth concerns. Over in Asia, Hong Kong fell small, but China popped despite weaker Manufacturing data this weekend. Aussie was under pressure, Miners a standout loser down under again.
The US 10YY is off small, but both German and US yields are well off overnight lows - Credit players are chattering about a potential AAPL Bond sale- They last did a $12B issue in April. The DXY is stronger, led by gains against Euro and Yen - causing a headwind for commodities. We continue to see precious metals underperforming, with Silver and Gold heading red right now - while the Grains and Beans remain under pressure. Right now the Crude complex is mixed, but have rallied 90bp from overnight lows. As I chattered about all last week, the surprise cold weather in the USA - coupled with a 3Y high short interest, has Natty popping 5% this AM. Throughout the session today, we will get Auto Sales data - other scheduled catalysts include Fed's Evans speaking at 9:30, Markit US Manufacturing PMI at 9:45, ISM Manufacturing at 10, ECB's Nowotny speaks on Policy at 12:30, Dallas Fed's Fisher speaks on monetary policy at 12:40, and President Obama to meet with Yellen on Economy at 2pm today. Tomorrow brings us the Mid-Term elections, where odds have ramped significantly of the GOP taking the Senate (NY Times puts at 75%, WaPo 90%+)