Morning Markets – Dave Lutz – 1/9/17

“Good Morning!   US Futures are starting slightly under pressure, confounding the peeps on CNBC wearing their Dow20,000 hats.   We have pretty much a sea of red across Europe, with the DAX off 55bp in a market that sees Fins and Energy lagging.  Multiple Italian banks are being halted limit down, hitting the MIB for 1.7% in the afternoon hours.  The weaker pound helped post a fresh FTSE record, with Miners propelling London.  Volumes are relatively light – with most exchanges trading ~30% off normal trend.   Quiet overnight in Asia as Japanese markets were closed for a public holiday – China gained 50bp as HIBOR fell – Aussie enters a bull market, climbing almost 1% as the Big Banks Rallied, while all of EM was in the red as the Greenback caught bid.

Hawkish comments from Fed’s Evans and Williams had the US 10YY higher early, but with the German 10YY retreating from 3week highs, we are seeing most Sov Bonds bid (Yields lower).  The Greenback is recovering the bulk of last week’s losses, with the Euro weaker despite German IP and Exports better than expected, and Euro Unemployment coming in at 7year lows – Sterling falls to October Lows on Article 50 headers – Turkey’s Lira fresh record low on Moody’s, Peso eyeballing lows into Auto Show Headers.  With the stronger $, damn interesting to see GOLD higher, while Industrial commodities are taking a breather from last week’s ripsaw.  Oil getting hit for 2% as US Producers add more rigs and Iran ramps exports, while Natty Gas drops 1.5%, adding to last week’s losses.

Ahead of us today, we have Fed’s Roesengren speaking at 9 – Bank of England Bond-Buying Operation Results post at 9:50 – the Bank of Canada Senior Loan Officer Survey hits at 10:30 – Fed’s Lockhart Speaks to the Rotary Club of Atlanta at 12:45 – and we get Consumer Credit at 3.  Eyes on Healthcare as JPM’s Conference in SF gets going – while multiple airlines post December PRASM Numbers.   Retailers in focus this week with the ICR Conference kicking off tomorrow in Orlando, ahead of Advance Retail Sales for December on Friday.  Earnings focus is all Financials – BAC, BLK, JPM, PNC, WFC report Friday pre-open.”