Morning Call For Tuesday, January 16

OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 +0.39%) are up +0.41% at a fresh record nearest-futures high as growth optimism fuels gains in global equity markets. Gains in technology stocks are leading the overall market higher as quarterly earnings season ramps up this week. European stocks are up +0.59% at a 2-1/4 month high, German bunds rallied, and EUR/USD retreated after Reuters reported the ECB is unlikely to change its forward guidance until at least the March meeting. Asian stocks settled mostly higher: Japan +1.00%, Hong Kong +1.81%, China +0.77%, Taiwan +0.27%, Australia -0.47%, Singapore +0.39%, South Korea +0.80%, India -0.21%. Japan’s Nikkei Stock Index climbed to a 26-year high as exporter stocks rallied after the yen weakened when Japanese Finance Minister Aso said: “sudden moves in exchange rates are a problem.” USD/JPY had dropped to a 4-month low and the dollar index sold-off to a 3-year low on Monday with U.S. markets closed for Martin Luther King Jr. Day.

The dollar index (DXY00 -0.35%) is down -0.27%, but remains above Monday’s 3-year low. EUR/USD (^EURUSD) is down -0.30%. USD/JPY (^USDJPY) is up +0.08%.

Mar 10-year T-note prices (ZNH18 +0.13%) are up +6 ticks as they move higher on carry-over strength from a rally in German bunds.

Reuters reports that three unidentified people with knowledge of the matter said the ECB is unlikely to drop a pledge to keep buying bonds at the Jan 25 meeting as rate-setters need more time to assess the outlook for the economy and the euro. Any fundamental change to guidance is likely to come later with the Mar meeting as the more likely option.

The German Dec wholesale price index rose +1.8% y/y, the smallest year-on-year increase in 13 months.

UK Dec CPI rose +0.4% m/m and +3.0% y/y, right on expectations. The Dec core CPI rose +2.5% y/y, weaker than expectations of +2.6% y/y.

Japan Dec PPI rose +0.2% m/m and +3.1% y/y, weaker than expectations of +0.4% m/m and +3.2% y/y.