OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps are up sharply by +1.23% and European stocks are up +2.53% as a rally in copper boosted miners and commodity producers. Also a rally in China’s Shanghai Composite reduced Chinese economic concerns. European automakers rose, with Peugeot Citroen up over 6%, after China said it will cut the purchase tax in half on certain vehicles. Asian stocks settled higher: Japan +2.70%, Hong Kong +1.41%, China +0.48%, Taiwan +0.60%, Australia +2.10%, Singapore +0.11%, South Korea +1.25%, India +1.46%.
The dollar index is up +0.25%. EUR/USD is down -0.23% on the prospects for additional ECB stimulus after Eurozone Sep CPI unexpectedly fell for the first time in 6 months. USD/JPY is up +0.40%.
Dec T-note prices are down -13 ticks as the sharp rally in stocks reduces the safe-haven demand of government debt.
In an attempt to spur demand in China’s housing market, the PBOC cut the minimum down payment for buyers in cities without property restrictions to 25% from 30%.
The Eurozone Sep CPI estimate unexpectedly fell -0.1% y/y, weaker than expectations of unch y/y and the first decline in 6 months. The Sep core CPI rose +0.9% y/y, right on expectations.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +13.9% with purchase sub-index +9.1% and refi sub-index +17.7%), (2) Sep ADP employment (expected +190,000, Aug +190,000), (3) Sep Milwaukee ISM (expected +0.83 to 48.50, Aug +0.55 to 47.67), (4) Sep Chicago PMI (expected -1.4 to 53.0, Aug -0.3 to 54.4), (5) New York Fed President William Dudley’s speech on market liquidity at the Liquidity Forum sponsored by SIFMA, (6) opening remarks by Fed Chair Janet Yellen and St. Louis Fed President James Bullard at the St. Louis Fed’s annual community banking conference, and (7) Fed Governor Brainard’s speech at a St. Louis Fed conference on the outlook for community banking.
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