Morning Call For April 8, 2016

OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM16 +0.53%) are up +0.58% and European stocks are up +1.01%. A +3.46% rally in crude oil to a 1-week high has boosted energy producing stocks and pulled the overall market higher, while comments made last night from Fed Chair Yellen reinforce her previous comments that the Fed will take its time when raising interest rates. European stocks also moved higher after German Feb exports and imports rose more than expected, a sign of economic strength. Asian stocks settled mixed: Japan +0.46%, Hong Kong +0.51%, China -0.78%, Taiwan +0.60%, Australia-0.53%, Singapore -0.19%, South Korea -0.21%, India -0.05%. Japan’s Nikkei Stock Index recovered from a 1-3/4 month low and closed higher after the yen weakened for the first time in the last six sessions, which boosted exporter stocks. USD/JPY had plunged to a 17-1/4 month low on Thursday. but recovered on comments from Japanese Finance Minister Aso who signaled the government may soon intervene in the currency market to slow the strength in the yen when he said that rapid yen movements are “undesirable” and the government will act appropriately if necessary.

The dollar index (DXY00 +0.08%)is up +0.09%. EUR/USD (^EURUSD) is down -0.11%. USD/JPY (^USDJPY)is up +0.43%.

Jun T-note prices (ZNM16 -0.18%) are down -8.5 ticks.

Speaking Thursday night, Fed Chair Yellen said that she continues to see some slack remaining in the U.S. labor market even as the economy shows “tremendous progress” the financial crisis. She added that the Fed will start unwinding assets its balance sheet when interest rates are a bit higher.

Kansas City Fed President George said the U.S. economy is likely to continue to expand at around 2% with a jobless rate of 5% that is “near full employment” and that inflation excluding food and energy has moved up in recent months. She added that gradual tightening allows the Fed to react to risks, although delaying tightening could promote excessive risk-taking.