- Stocks seen higher; Treasurys lower; Brent crude higher; Gold higher.
- Watch for conference board employment trends index at 1000 ET; Fed Governor Tarullo speaking on financial regulation in New York at 1815 ET.
- Dollar up against yen, down versus euro, pound; Bunds, gilts mixed.
-G-20 officials clash on bank tax. Japan finance minister Fujii: U.S. wants a strong dollar. ADB executive: still too early for Asian economies to withdraw stimulus. Central banks overweight treasurys favorites to buy gold.
MARKETS OUTLOOK:
BONDS: U.S. Treasurys lower in London as European equity markets rally and ahead of heavy U.S. Treasury supply this week. Issuance includes $40 billion three year U.S. Treasurys. The Treasury yield curve moves marginally flatter, with the 2-year/10-year benchmark spread narrowing to +264.3 bps from Friday's +265.8 bps. The 2-year note is down 1+/32 at 100 8+/32, yielding 0.863%, the 10-year down 3+/32 at 100 29+/32, yielding 3.512%, with the 30-year bond down 10/32 at 101 13/32, yielding 4.414%.
Corporate bonds: Markit iTraxx indexes are tighter amid looming merger and acquisition activity, in particular Kraft Foods's (KFT) expected hostile bid for Cadbury (CBRY.LN), buoys market sentiment. At 1020 GMT, the Crossover index was at 514/518 bps, tighter than Friday's close of 530 bps. The Europe index was at 84/85 bps, also tighter compared with Friday's close of 87 bps.
Bunds and gilts are mixed. December bunds are unchanged at 120.95, with December gilts are up 0.31 at 116.64.
FOREX: With U.S. payrolls and the G20 summit out of the way and the International Monetary Fund suggesting the dollar has further to fall, the U.S. currency is back under selling pressure in Europe.
By 0530 ET, the dollar was down in Europe at Y89.91, while the euro was up at $1.500 and the pound had risen to $1.6826.
EQUITIES: U.S. stocks are picked to open firmer, as traders in Asia and Europe push U.S. futures higher following a strong performance last week, and the resilience in equities after disappointing employment numbers, said David Morrison at GFT."We have a situation currently where poor data supports the accommodative stance taken by central banks, and the ultra-low Fed Funds rate," he said. "This in turn underpins stocks, as investors search desperately for yield and a return on their money," added Morrison.
At 0549 ET, Dow Jones Industrial Average futures were trading up 0.8% at 10052.5, while Nasdaq 100 futures were up 0.7% at 1741.88 and S&P 500 futures were up 0.8% at 1075.05.
European shares jumped, with miners performing well and as investors also welcomed earnings and deal moves in the insurance sector.
At 0537 ET, the Eurostoxx50 was up 1.3% at 2831.39, the FTSE 100 was up 1.2% at 5203.21 and the DAX 30 was up 1.4% at 5563.98.
COMMODITIES: Oil futures strengthen on caution over Hurricane Ida as it crosses the Gulf of Mexico, heading toward U.S. Gulf coast oil and gas installations, a trader said. "Flat price this morning is all about Ida" and external factors like the lower USD and higher equities, he said. Meanwhile, "fundamentals remain weak in the U.S., so (market) structure should remain weak," the trader added.
At 0592 ET, ICE December Brent traded up 112 cents at $76.99 a barrel, while Nymex December WTI traded up 121 cents at $78.64 a barrel.
Spot gold hit yet another record high Monday and market participants struggled to be bearish saying while the rise in gold has been driven largely by momentum buying, there is little to stop gold from rising to $1,200 a troy ounce before the end of the year.
At 0536 ET, spot gold traded at $1108.35 an ounce, up 1.2% from late Friday in New York, while silver was at $17.72, up 2.1% from Friday's close.
=======TODAY'S CALENDAR=======
ET/COUNTRY/PERIOD
0815 CAN Oct Housing Starts
1000 US Oct Conference Board Employment Trends Index
1815 US Fed Gov Tarullo speaks on financial regulation in New York
==============================
OTHER TOP STORIES OF THE DAY:
MOODY'S CHANGES CHINA'S RATINGS OUTLOOK TO POSITIVE FROM STABLE
Moody's Investors Service has changed China's ratings outlook to positive from stable in light of the country's resilient, robust and relatively stable macroeconomic performance.
CIC SEEKS TO EASE CONCERNS OVER INVESTMENTS
China's sovereign wealth fund says foreign governments' concerns about its investments are unwarranted. It says it is not a threat to national security, and will not seek to control foreign companies
CHINA MOST ATTRACTIVE PRIVATE-EQUITY DESTINATION - CARLYLE
China offers unrivalled opportunities for private-equity investment because of its fast-growing economy and the sector's low penetration there, Carlyle Group's co-founder and managing director, David Rubenstein said.
UK'S BLAIR IN LAST-DITCH BID FOR EU PRESIDENCY
Former U.K. prime minister Tony Blair makes a flurry of phone calls to European leaders in a last ditch effort to boost his chances of becoming EU president, according to a newspaper report.
May The Force Be With You.
Eddie's Free Forex Class