Morning Call For Friday, January 5

OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 +0.30%) this morning are up +0.29% at a new record nearest-futures high as global stock markets continue their rallies in the first week of the new year. Expectations for a strong U.S. Dec payroll report this morning is pushing U.S. stock indexes further into record territory and European stocks are up +0.99% at a 2-week high as signs of stronger growth and slack inflation push European stocks higher. German Nov retail sales jumped +2.3% m/m, the biggest increase in 13-months, and Eurozone Dec core CPI rose a less-than-expected +0.9% y/y. Asian stocks settled mostly higher: Japan +0.89%, Hong Kong +0.25%, China +0.18%, Taiwan +0.29%, Australia +0.74%, Singapore -0.33%, South Korea +1.35%, India +0.54%. The rally in U.S. equity markets to new record highs Thursday gave Asian markets a lift as China’s Shanghai Composite rose to a 1-1/4 month high and Japan’s Nikkei Stock Index climbed to a new 26-year high. Japanese stocks also garnered support from a weak yen that boosts the earnings prospects of exporters after USD/JPY rose to a 1-week high.

The dollar index (DXY00 +0.19%) is up +0.19%. EUR/USD (^EURUSD) is down -0.15%. USD/JPY (^USDJPY) is up +0.43% at a 1-week high.

Mar 10-year T-note prices (ZNH18 -0.04%) are down -3 ticks.

Eurozone Nov PPI of +0.6% m/m and +2.8% y/y was stronger than expectations of +0.3% m/m and +2.5% y/y with the +0.6% m/m gain the largest monthly increase in 10 months.

The Eurozone Dec CPI estimate rose +1.4% y/y, right on expectations. The Dec core CPI rose +0.9% y/y, weaker than expectations of +1.0% y/y.

German Nov retail sales rose +2.3% m/m, stronger than expectations of +1.0% m/m and the largest increase in 13 months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Dec non-farm payrolls (expected +190,000, Nov +228,000) and Dec unemployment rate (expected unch at 4.1%, Nov unch at 4.1%), (2) Dec average hourly earnings (expected +0.3% m/m and +2.5% y/y, Nov +0.2% m/m and +2.5% y/y), (3) Nov trade balance (expected -$50.0 billion, Oct -$48.7 billion), (4) USDA weekly Export Sales, (5) Nov factory orders (expected +1.1%, Oct -0.1% and +0.8% ex transportation), (6) Dec ISM non-manufacturing index (expected +0.2 to 57.6, Nov -2.7 to 57.4), (7) Philadelphia Fed President Patrick Harker (voter) speaks on an economic outlook panel at the annual meeting of the American Economics Association (AEA), (8) Cleveland Fed President Loretta Mester (non-voter) and Boston Fed President Eric Rosengren (non-voter) take part in a panel discussion on ‘Coordinating Conventional and Unconventional Monetary Policies for Macroeconomic Stability’ at the annual meeting of the AEA.