Dave Lutz, head of ETFs at JonesTrading, has an overview of today's markets.
- Most global markets are red Monday morning.
- The US dollar is gaining in anticipation of a tax deal.
- Bitcoin is taking back some of the heavy losses from last week.
Good Morning! US Futures were higher, but leaking lower into the Red. We have a heavy slate ahead of us this week – Fed, BoE, and BOJ heads speaking – Countries reporting GDP and CPI, and 30+ Sell-Side conferences to cope with. It’s a wide sea of red in Europe, where the DAX is falling 0bp+ with every sector in the red. Banks remain weak, with SX7E off 1%, while Utilities under pressure on EDF. Weaker Sterling buoying FTSE, where Yield Sensitive sectors are bid. In Asia, Nikkei continues to bleed, off 1.3%, not down over 4% from high tick 3 sessions ago - Hang Seng up 20bp and Shanghai up 40bp - KOSPI lost 50bp, but KOSDAQ ripped nearly 3% higher - Aussie down small, while All of Asia EM under pressure
10YY retreating from 2.4% as last week’s heavy selling in Bunds subsides – Germany’s 10YY down 2bp and back under 40bp. Tax Deal hopes have the DXY in rally mode, but the Greenback was just rejected from Friday’s highs against the basket. All eyes on Sterling smashing south $1.31 and 100dma on potential leadership challenge to Theresa May, while the Euro is drifting around unch. Yen firming to the dollar, while Commodity currencies are seeing some pressure. Ore gained 50bp in China, adding to last week’s 5% pop – Notable Gold is bid despite the Dollar, maybe flows from Cryptocurrencies with Bitcoin off 25% in 4 days. Lack of headlines from Saudi this weekend has Oil drifting near Friday’s lows into the OPEC monthly report, while Natty is firmly red, off 1.5%