Morning Call For March 30, 2016

OVERNIGHT MARKETS AND NEWS

World equity markets are showing solid gains this morning on relief about Fed Chair Yellen’s dovish comments yesterday, which resulted in delayed expectations for the Fed’s next rate hike. The market is now discounting the chances for a June rate hike at only about 30% versus 50% last week. June E-mini S&Ps (ESM16 +0.57%) are up +13.50 points (+0.66%) this morning and the Euro Stoxx 50 index is up +1.62%. European stocks were able to shake off today’s news that the European Commission’s March Eurozone executive and consumer confidence index fell by -0.9 points to a 1-year low of 103.0 from Feb’s 103.9, weaker than market expectations for a -0.1 point decline to 103.8. The poll was conducted before the March 22 terrorist attacks in Brussels.

China’s Shanghai Composite index today closed sharply higher by +2.77%. Japan’s Nikkei index closed -1.31%, but the other Asian stock markets closed higher: Hong Kong +2.15%, Taiwan +1.39%, Australia +0.11%, Singapore +1.90%, South Korea +0.41%, India +1.76%, Turkey +1.25%.

The dollar index (DXY00 -0.30%) this morning is down by another -0.19 points (-0.20%) on carry-over bearishness from yesterday’s dovish Yellen comments. EUR/USD (^EURUSD) is up +0.0028 (+0.25%) and USD/JPY (^USDJPY) is down -0.38 (-0.34%). June 10-year T-note prices (ZNM16 -0.02%) are down -1.5 ticks on reduced safe-haven demand with the rally in world stocks.

Commodity prices this morning are up by an average +0.64% on the dollar’s continued weakness. May WTI crude oil (CLK16 +1.67%) is up +0.64 (+1.67%) and May gasoline (RBK16 +0.20%) is up +0.0029 (+0.20%). May natural gas (NGK16 +0.66%) is up +0.25%. Precious metals prices are higher again today on the weak dollar but copper prices are lower: April gold (GCJ16 -0.08%) +2.1 (+0.17%), May silver (SIK16 +0.80%) +0.147 (+0.97%), May copper (HGK16 -0.61%) -0.016 (-0.70%).

Grains are narrowly mixed this morning with May corn slightly lower by -0.25 (-0.07), May soybeans slightly higher by +0.75 (+0.08%), and May wheat slightly lower by -0.50 (-0.10%). Softs are higher this morning on the weaker dollar: May sugar +0.21 (+1.32%), May coffee +.85 (+1.45%), May cocoa +37 (+1.25%), and May cotton +0.24 (+0.42%).