Traders New York Stock Exchange NYSE

Dave Lutz, head of Exchange Traded Funds at JonesTrading, has a quick overview of what traders are talking about right now.

In brief:

  • It’s quiet in US futures trading ahead of the release of the European Central Bank’s meeting minutes on Thursday and the US jobs report on Friday. 
  • Treasury yields are higher as traders increase bets that the Federal Reserve will raise its benchmark interest rate in December. And West Texas Intermediate crude oil, the US benchmark of prices, is just under $50 per barrel and near the highest levels since June. 
  • Weekly initial jobless claims and the monthly report on planned job cuts are on the data calendar. 

Here’s Lutz:

Good Morning!   US Futures are off small as quiet trade prevails ahead of the ECB Minutes later this AM and the US Jobs Report tomorrow.  It’s a Sea of red across most of Europe, with the DAX down 30bp despite Euro Banks still rallying, with DB adding 1%+ – but those “Yield Proxies” like Utes and telecom whacked again and the Energy sector digests recent gains.   Slightly better in London, as the Miners catch a bid, but London Banks are underperforming their EU Counterparts.   Volumes are actually pretty good, with most exchanges 20-30% above trends.   In Asia, Nikkei gained 50bp as the Yen fell to 1month lows, Aussie hits 5week highs as Energy shares rallied – Emerging stocks hit a one-week high, while China remains closed. 

That “Policy Sensitive” US 2YY at a 4month high, while the US 10YY remains above 1.7% ahead of the Jobs Report – Bund Yields are seeing some pressure and Euro falling despite a Strong showing from German factory orders.   The DXY is higher with the Pound under pressure again and the Renminbi-Dollar Cross whacked early catching attention.  Despite the stronger $, we finally haven  bid to Silver and Gold after days of weakness – and that Energy Complex is off small, with shorts eyeballing WTI hovering just under $50.   Gasoline continues to retreat quickly as Matthew’s course gets more favorable, while Softs are mixed in quiet trade. 

The “Main Event” for the day could certainly be the ECB minutes at 7:30 – with Headline Algos looking for confirmation that “tapering” was discussed.  ECB President Mario Draghi confounded the expectations of many in markets when he said after the bank’s last meeting that policymakers “had not discussed extending its scheme.” We get a double-dose of JOBS data today, with Challenger Job Cuts at 7:30 and Weekly Jobless Claims at 8:30.   At 10:30 the Natty Gas Inventory data hits.   Later today the G20 Finance Ministers and Central Bank Governors all start convening. 

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