Morning Call For Friday, Oct. 5

Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +0.05%) this morning are down slightly by -0.01% ahead of U.S. Sep non-farm payrolls later this morning. European stocks are down -0.38% at a 2-week low as losses in mining stocks lead the overall market lower with the price of copper (HGZ18 -0.16%) down -0.32% at a 2-week low. Technology stocks are also lower on concern about further escalation of the U.S.-China trade war after Bloomberg news reported Thursday that China infiltrated U.S. companies with spyware installed on equipment manufactured in China. The threat of higher interest rates is another negative for European equities after the yield on the 10-year German bund climbed to a 4-1/2 month high of 0.57%. Asian stocks settled mostly lower: Japan -0.60%, Hong Kong -0.19%, China closed for holiday, Taiwan -1.88%, Australia +0.15%, Singapore -0.67%, South Korea -0.17%, India -2.25%. Japan’s Nikkei Stock Index fell to a 2-week low, led by losses in semiconductor stocks, and Hong Kong’s Hang Seng Stock Index dropped to a 3-week low as suppliers of technology to China sold-off on news that China had hacked American computer networks using a microchip built by its spies. A 15% plunge in Chinese computer maker Lenovo led losses in the Hang Seng. Asian markets are also concerned of a sell-off in Chinese stocks when they resume trading Monday after being closed this week for holidays.

The dollar index (DXY00 +0.05%) is up +0.09%. EUR/USD (^EURUSD -0.08%) is down -0.10%. USD/JPY (^USDJPY +0.01%) is down -0.02%.

Dec 10-year T-note prices (ZNZ18 -0-015) are down -2 ticks.

German Aug factory orders rose +2.0% m/m, stronger than expectations of +0.8% m/m.

German Aug PPI rose +0.3% m/ and +3.1% y/y, stronger than expectations of +0.2% m/m and +2.9% y/y with the +3.1% y/y gain the largest year-on-year increase in 11 months.

Japan Aug household spending rose +2.8% y/y, stronger than expectations of +0.1% y/y and the biggest increase in 3 years.

Japan Aug labor cash earnings rose +0.9% y/y, weaker than expectations of +1.3% y/y. Aug real cash earnings unexpectedly fell -0.6% y/y, weaker than expectations of no change and the biggest decline in 6 months.