Globex trading turned bearish during the European session on no significant new fundamental information as we head into a 3-day US stock market weekend (Monday is US Presidents Day). There is no scheduled US economic data for this morning. The ES is technically overdue for a bearish pullback, but the bears probably won’t get much going unless they can clear the 2331 area. Volatility should remain similar to yesterday unless the bears get some momentum going. Volatility may dry up this afternoon as traders start closing shop for the long weekend. Size bias is short into the US session open.
This morning is about the ECB’s 7:45am EST Minimum Bid Rate announcement and subsequent 8:30am EST ECB President Draghi’s press conference. Expectations are for the ECB to make no changes; subtle differences from the expectations could move this morning’s markets. The press conference will most likely overshadow this morning’s 8:30am EST Philly Fed and Unemployment Claims numbers and a slew of corporate earnings reports. Volatility continues to shrink as traders wait on something that will change their expectations. No clear Size bias this morning as institutional trading was almost non-existent overnight.
Chinese GDP came in line with expectations but industrial production numbers were weak, casting a bearish sentiment on stocks. The Saudi oil minister stated that Non-OPEC nations are providing strong signals they’ll cooperate with OPEC to stabilize oil prices. Corporate earnings are very much in focus with HAL, MS, and USB reporting pre-market. ES Globex action has been mixed, rotating around it’s 2132 settlement price. US Housing Starts and Building Permits are on deck for 8:30am EST and Crude Oil Inventories back on it’s normal day and time @ 10:30am EST. Volatility continues to shrink; traders are waiting on a reason to move the markets. Size bias is short into the 8:30am EST numbers on light volume.
UK inflation numbers are up, but no rebound for the GBP despite its tumble over the last few weeks. Oil is also up on no particular news. Strength in financial and energy stocks have the ES up overnight while traders switch focus to this morning’s 8:30am EST CPI numbers. We’re in earnings season and the big name for today is Goldman Sachs who reports pre-market. Volatility is still a hard read. Yesterday’s range was a pitiful 13.25 points while overnight the ES is 15.25 points so far. Until traders find some reason to take the market up or down, the low volatility will most likely continue. Size bias is long on light volume into the 8:30am EST CPI numbers.
We have a plethora of data reports @ 8:30am EST which include Retail Sales number, PPI numbers, the Philly Fed, and Unemployment Claims. That’s enough new information to either start a market directional trend or if mixed, cause indecision and net out as a neutral. The numbers will be viewed against the likelihood of the FOMC increasing rates next week or this year or next year. Volatility remains high and is expected to remain so today. Size bias is long into the 8:30am EST numbers on light volume.
Another directionless overnight session on light news flow. Oil saw some pressure after API inventory numbers came in higher than expected yesterday. Focus will be on today’s 10:30am EST Crude Oil Inventories report. The bulls continue to fight to make new highs and unfortunately, most of this week’s potential market moving numbers are not released until Friday morning. The bulls are looking and waiting for a reason to run. Size bias is long on light volume into the US session open.
Globex price action has been lackluster after yesterday’s bearish move. UK’s Services PMI met expectations but at 47.4, it’s a number not seen for over 3.5 years. Countering the PMI sentiment is corporate earnings which are generally beating expectations. Oil remains below $40 and thus the 10:30am EST Crude Oil Inventories report will be watched closely. Other data on deck include the 8;15am EST ADP Employment Change, 9:45am EST Final Services PMI, and 10:00am EST ISM Non-Mfg PMI. After yesterday’s range breaking move, it will be interesting to see if the bulls or bears can get anything going today. A test of the 2141.50 low is expected and if it doesn’t happen early, that’s bullish. Volatility should be lower than yesterday. Size bias is short into the US session open.