Morning Call For March 31, 2016

OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM16 +0.01%) are mildly lower by -0.16% this morning due to a resumed decline in crude oil prices, S&P’s cut in its rating outlook for China, and lower European stocks. The Euro Stoxx 50 index this morning is down -1.35%. The China Shanghai index today closed slightly higher by +0.11%, but that was before S&P cut its rating outlook on China to negative. Asian stocks today closed mixed: Japan -0.71%, Hong Kong -0.13%, Taiwan +0.09%, Australia (+1.45%), Singapore -1.11%, South Korea -0.28%, India +0.01%, Turkey -0.16%.

The dollar index (DXY00 -0.32%) this morning is down -0.31% as the dollar continues to suffer from deferred rate hike expectations after Yellen’s dovish comments on Tuesday. EUR/USD (^EURUSD) is up +0.0038 (+0.34%) and USD/JPY (^USDJPY) is down -0.06 (-0.05%). EUR/USD received a little support from today’s news of a slight uptick in the Eurozone CPI data. June 10-year T-note prices (ZNM16 +0.05%) are up +4.5 ticks.

Commodity prices this morning are little changed on average. May WTI crude oil (CLK16 -0.10%) is down -0.21 (-0.55%) and May gasoline (RBK16 -0.72%) is down -0.0175 (-1.19%) after U.S. crude oil inventories in Wednesday’s weekly EIA rose by +2.2 million bbls to a new record high even though the market had been expecting an even larger 3 million bbl rise. May natural gas (NGK16 -0.05%) is up +0.30%. Metals prices this morning are mixed. April gold (GCJ16 +0.73%) is up +7.7 (+0.63%) and May silver (SIK16 +1.28%) is up +0.119 (+0.78%) on the lower dollar, while May copper (HGK16 -0.73%) is down -0.023 (-1.05%).

Grains are narrowly mixed ahead of today’s USDA quarterly grains and prospective plantings reports. May corn is down -0.50 (-0.14%), May soybeans are unchanged, and May wheat is down -1.25 (-0.27%). Softs are mixed: May sugar -0.12 (-0.76%), May coffee +0.30 (+0.24%), May cocoa -5 (-0.17%), and May cotton -0.19 (-0.33%).

The Eurozone March CPI report of -0.1% y/y was in line with market expectations and was up slightly from Feb’s -0.2% y/y. The Eurozone March core CPI of +1.0% was slightly stronger than market expectations of +0.9% and was up from Feb’s +0.8%.