What are traders chatting about this morning? Last night's big move in futures ...
Good Morning, and Happy April Fools Day - Wild ride for Futures last night - S&P and Nasdaq got crushed for over 1% just before 9pmET. There was heavy ETF selling in Japan to Start the New Year, "suggesting large scale domestic redemption (and hedged via Futures)" traders say. The $/Yen's weakness, coupled with ETF selling got Tokyo gappy to the downside - dragging US futures lower. There were stop losses parked at 2048.5 in the Big S&Ps - "Over 6k went through on the move to 2033.5 and over 10k in the 2 mins after the decline started." Other traders note that the weakness coincided with Chinese PMI data (but not as bad as feared); Greek Headlines (the circus continues); and Japan's Tankan release (hit prior, not that bad)
Right now Futures have battled back near unchanged, and I "hear" the ETF selling in Japan may be a allocation shift towards Europe - Nearly $1B of inflows in various EU Stoxx ETFs have propelled Europe higher. The DAX is up over 1%, led by a jump in the Financials and Industrials, while Technology is the lagger. Overall volume is decent in Europe, with most exchanges trading heavy to averages. Over in Asia, China hits a 7Y high, the Nikkei closed down 90bp, and Aussie lost ground as commodity prices weighed. Headlines that Ore has broken $50 weigh heavy down under…
The US 10YY is starting under pressure, taking out yesterday's1.92% low as German 10's break under 17bp. The $ has regained it's early losses against the Yen, but wekness against Euro has the DXY basically unchanged. Commodities are mixed, with Gold and Copper showing a slight bid, and all of the "Softs" are higher. The Crude Complex is mixed, with Brent slightly higher, but WTI under pressure on Inventory data - While last night API showed a 5.2M build overall, there was a lighter Cushing build of 2.6M (Genscape was closer to 3M) - DOE today. Scheduled Catalysts include ADP Employment Change at 8:30; Fed's Williams Moderates a Panel on Financial Stability at 9 - at 9:45 we get Markit US Manufacturing PMI ahead of Construction Spending, and ISM manufacturing at 10. 10:30 brings DOE data, along with Fed's Lockhart leading a Panel on Banks and Monetary Policy…