Morning Call For May 23, 2016

OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM16 -0.10%) are down -0.17% and European stocks are down -1.07%. Concerns about European economic growth are undercutting stocks after the Eurozone May Markit manufacturing PMI unexpectedly fell. Comments from St. Louis Fed President Bullard were another negative for equities when he said that there are signs that show the U.S. growing below trend pace of 2%. The weekend meeting of G-7 finance ministers and central bankers failed to inspire markets, although USD/JPY did fall after U.S. Treasury Secretary Lew reiterated his view that recent movements of the yen haven’t been overly volatile. Asian stocks settled mixed: Japan -0.49%, Hong Kong -0.22%, China +0.64%, Taiwan +2.62%, Australia -0.60%, Singapore +0.11%, South Korea +0.46%, India -0.28%. Chinese and Taiwan stocks closed higher as Apple vendors Taiwan Semiconductor Manufacturing and Hon Hai Precision Industry rallied after the Economic Daily news reported that Apple asked suppliers to prepare production of a new version of its smartphones. Japan’s Nikkei Stock Index closed lower after Japanese traded data showed exports from Japan fell for a seventh consecutive month last month.

The dollar index (DXY00 -0.02%) is up +0.01%. EUR/USD (^EURUSD) is down -0.13%. USD/JPY (^USDJPY) is down -0.64%.

Jun T-note prices (ZNM16 +0.11%) are up +5.5 ticks.

St. Louis Fed President Bullard (voter) said that signs show the U.S. growing below trend pace of 2% and “the slower, below-trend pace of recent U.S. growth is inconsistent with a slowly rising path for the policy rate.”

The Eurozone May Markit manufacturing PMI unexpectedly fell -0.2 to 51.5, weaker than expectations of +0.2 to 51.9.

The Japan Apr trade balance was in surplus by +823.5 billion yen, wider than expectations of +540.0 billion yen and the largest surplus in 6 years. Apr exports fell -10.1% y/y, weaker than expectations of -9.9% y/y, and Apr imports plunged -23.3% y/y, weaker than expectations of -19.2% y/y and the biggest decline in 6-1/2 years.