Morning Call For March 17, 2016

OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM16 -0.30%) are down -0.45%, retreating from a 2-1/2 month high on global growth concerns. The markets lost their euphoria over the Fed’s decision Wednesday to scale back interest rate increases on concern over global growth. Caterpillar is down over 3% in pre-market trading after it lowered guidance on Q1 adjusted EPS to 65 cents-70 cents, below consensus of 95 cents. European stocks are down -1.66%, led by losses in carmakers, as EUR/USD rallied to a 5-week high. Commodity producers and mining stocks bucked the trend and are trading higher as crude oil jumped to a 3-1/4 month high and copper climbed to a 1-1/2 week high. Asian stocks settled mixed: Japan -0.22%, Hong Kong +1.21%, China +1.20%, Taiwan +0.41%, Australia +0.96%, Singapore +1.26%, South Korea +0.72%, India -0.02%. China’s Shanghai Composite posted a 3-week high as the yuan strengthened to a 2-1/2 month high against the dollar, although Japanese stocks closed lower after JPY/USD fell to a 3-week low, which undercut exporters and dragged the overall market lower.

The dollar index (DXY00 -1.00%) is down -1.14% at a 4-3/4 month low. EUR/USD (^EURUSD) is up +0.90% at a 5-week high. USD/JPY (^USDJPY) is down -1.12% at a 3-week low.

Jun T-note prices (ZNM16 +0.45%) are up +22 ticks at a 1-week high on positive carryover from the FOMC’s decision yesterday to scale back its interest rate increases.

The ECB Governing Council lowered the ELA ceiling for Greek banks to 71.3 billion euros from 71.4 billion euros, saying the move “reflects an improvement of the liquidity situation of Greek banks, amid a reduction of uncertainty and the stabilization of private sector deposit flows.”

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +9,000 to 268,000, previous -18,000 to 259,000) and continuing claims (expected +10,000 to 2.235 million, previous -32,000 to 2.225 million), (2) Q4 current account deficit (expected -$118.0 billion, Q3 -$124.1 billion), (3) Mar Philadelphia Fed business outlook survey (expected +1.3 to -1.5, Feb +0.7 to -2.8), (4) Jan JOLTS job openings (expected -57,000 to 5.550 million, Dec +261,000 to 5.607 million), (5) Feb leading indicators (expected +0.2%, Jan -0.2%), and (6) the Treasury’s auction of $11 billion of 10-year TIPS.