Morning Call For December 4, 2015

OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 +0.28%) are up +0.32% on expectations that today’s U.S. Nov non-farm payroll report will show strength in the labor market, while European stocks are down -0.58% at a 6-week low on lingering disappointment that the ECB failed to expand QE at Thursday’s policy meeting. Losses in European stocks were limited after German Oct factory orders rose more than expected. Asian stocks settled lower on the heels of the sell-off seen in U.S. stocks on Thursday: Japan -2.18%, Hong Kong -0.81%, China -1.67%, Taiwan -0.68%, Australia -1.46%, Singapore -0.17%, South Korea -1.03%, India -0.96%.

The dollar index (DXY00 +0.55%) is up +0.63%. EUR/USD (^EURUSD) is down -0.40%. USD/JPY (^USDJPY) is up +0.17%.

Mar T-note prices (ZNH16 +0.11%) are up +4.5 ticks.

Germany’s Bundesbank kept its German 2015 GDP estimate at 1.7% and its 2016 GDP projection at 1.8%, but lowered its German 2015 inflation projection to 0.2% from 0.5% forecast in June and cut its 2016 German inflation outlook to 1.1% from 1.8%.

German Oct factory orders rose +1.8% m/m, the first increase in 4 months and stronger than expectations of +1.2% m/m.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Nov non-farm payrolls (expected +200,000, Oct +271,000) and Nov private payrolls (expected +190,000, Oct +268,000), (2) Nov manufacturing payrolls (expected unch, Oct unch), (3) Nov average hourly earnings (expected +0.2% m/m and +2.3% y/y, Oct +0.4% m/m and +2.5% y/y), (4) Nov average weekly hours all employees (expected unch at 34.5 hours), (5) Oct trade balance (expected -$40.50 billion, Sep -$40.81 billion), (6) Philadelphia Fed President Patrick Harker gives opening remarks at a Philadelphia Fed Policy Forum on monetary policy renormalization, (7) St. Lois Fed President James Bullard speaks at a Philadelphia Fed Policy Forum on “The New Normal for the U.S. Economy,” (8) Minneapolis Fed President Narayana Kocherlakota speaks at a Philadelphia Fed Policy Forum on monetary policy renormalization.