OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH16 +0.38%) are up +0.54% and European stocks are up +0.73% on optimism the U.S. economy is strong enough to handle an expected interest rate increase by the Fed today. The markets are expecting the FOMC to raise the federal funds rate by 25 bp and to reiterate that any subsequent rate hikes will be gradual as long as economic growth remains steady. European stocks found support on strength in manufacturing activity after the Eurozone Dec Markit manufacturing PMI climbed at the fastest pace in over 1-1/2 years. Asian stocks settled higher: Japan +2.61%, Hong Kong +2.01%, China +0.17%, Taiwan +1.38%, Australia +2.42%, Singapore +0.90%, South Korea +1.96%, India +0.69%.

The dollar index (DXY00 +0.02%) is down -0.01%. EUR/USD (^EURUSD) is down -0.08%. USD/JPY (^USDJPY) is up +0.19%.

Mar T-note prices (ZNH16 -0.06%) are down -3 ticks.

The German Dec Markit/BME manufacturing PMI rose +0.1 to 53.0, stronger than expectations of -0.1 to 52.8.

The Eurozone Dec Markit manufacturing PMI rose +0.3 to 53.1, stronger than expectations of no change at 52.8 and the fastest pace of expansion in 20 months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +1.2% with purchase sub-index unch and refi sub-index +3.5%), (2) Nov housing starts (expected +6.6% to 1.130 million, Oct -11.0% to 1.060 million), (3) Nov industrial production (expected -0.1% m/m, Oct -0.2%) and Nov manufacturing production (expected unch m/m, Oct +0.4%), and (4) today’s end of the 2-day FOMC meeting where the FOMC is expected to raise the funds rate target by +25 bp to 0.25%-0.50% range from 0.00%-0.25%.

There are 4 of the Russell 1000 companies that report earnings today: FedEx (consensus $2.50), Oracle (0.60), Jabil Circuit (0.80), Joy Global ($0.41).

U.S. IPO’s scheduled to price today: none.

Equity conferences: European Society for Medical Oncology Asia Congress on Fri.

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