Morning Call For Tuesday, Sept. 12

OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.18%) this morning are up +0.16% at a new contract high and European stocks are up +0.68% at a 1-month high led by strength in technology stocks. Chipmakers and suppliers to Apple are leading global stock markets higher ahead of the unveiling today of Apple’s new iPhones and watch. The rally in equities has reduced the safe-haven demand for gold with Dec COMEX gold (GCZ17 -0.56%) down -0.61% at a 1-week low. GBP/USD jumped +0.84% to a 1-year high after UK core Aug CPI rose a more-than-expected +2.7% y/y, a 5-1/2 year high, which may prod the BOE into tightening monetary policy. Asian stocks settled mostly higher: Japan +1.18%, Hong Kong +0.06%, China +0.09%, Taiwan +0.36%, Australia +0.58%, Singapore +0.22%, South Korea +0.19%, India +0.87%. China’s Shanghai Composite eked out a new 1-1/2 year high on signs of renewed optimism in the Chinese economic outlook after Premier Li Keqiang said that China’s economy will maintain its momentum and that the leverage ratio has “decreased somewhat.” Li Keqiang also added that cuts to excess capacity are exceeding expectations and that new growth drivers are replacing old ones in China’s economy at a faster pace. Japan’s Nikkei Stock Index rose to a 4-week high as exporter stocks led the way higher on the prospects of stronger earnings as USD/JPY climbed to a 1-week high.

The dollar index (DXY00 +0.12%) is up +0.10%. EUR/USD (^EURUSD) is down -0.18%. USD/JPY (^USDJPY) is up +0.40% at a 1-week high as the rally in global bourses reduced the safe-haven demand for the yen.

Dec 10-year T-note prices (ZNZ17 -0.21%) are down -9.5 ticks to a 1-week low as strength in global stocks curbs the safe-haven demand for government debt.

UK Aug CPI rose +0.6% m/m and +2.9% y/y, stronger than expectations of +0.5% m/m and +2.8% y/y. Aug core CPI rose +2.7% y/y, stronger than expectations of +2.5% y/y and the fastest pace of increase in 5-1/2 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Jul JOLTS job openings (expected -188,000 to 5.975 million, Jun +461,000 to 6.163 million), (2) Treasury auctions $20 billion of 10-year T-notes, (3) USDA Sep WASDE crop production.