Overnight Markets And News
Sep E-mini S&Ps (ESU18 +0.03%) this morning are up slightly as they climb +0.03% and European stocks are up +0.13%. Stock gains were limited on heightened China/U.S. trade tensions after the U.S. announced it will begin imposing a 25% tariff on an additional $16 billion in Chinese imports in two weeks. Increasing Brexit risks are a negative for European stocks and continues to weaken GBP/USD which fell -0.56% to a new 11-month low on concern that the U.K. won’t agree to exit terms with the EU. Asian stocks settled mixed: Japan -0.08%, Hong Kong +0.39%, China -1.27%, Taiwan +0.84%, Australia +0.23%, Singapore -0.40%, South Korea unch, India +0.59%. Chinese stocks moved lower after the U.S. said it will raise tariffs on $16 billion of Chinese goods on Aug 23, even after China Jul trade data showed Chinese exports and imports rose more than expected. Japanese stocks erased an early rally to a 2-week high and closed lower as exporter stocks declined after USD/JPY slid to a 1-week low, which weakens exporters’ earnings prospects. India’s S&P BSE Sensex Stock Index rose to a new record high as international investors shun Chinese stocks in favor of Indian stocks.
The dollar index (DXY00 +0.04%) is up +0.08%. EUR/USD (^EURUSD -0.02%) is down -0.03%. USD/JPY (^USDJPY -0.28%) is down -0.31% at a 1-week low.
Sep 10-year T-note prices (ZNU18 -0-005) are up +1 tick.
The China Jul trade balance was in surplus by +$28.05 billion, narrower than expectations of +$38.92 billion, Jul exports rise +12.2% y/y, stronger than expectations of +10.0% y/y and the biggest increase in 5-months. Jul imports jumped +27.3% y/y, stronger than expectations of +16.5% y/y and the most in 6-months.
Japan Jul bankruptcies fell -1.68% y/y, the fourth consecutive month that bankruptcies have declined.
The Japan Jul eco watchers survey outlook fell -1.0 to a 16-month low of 49.0, weaker than expectations of -0.1 to 49.9. The Jul eco watchers survey current fell -1.5 to a 22-month low of 46.6, weaker than expectations of -0.1 to 48.0.
U.S. Stock Preview
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -2.6% to 353.1 with purchase sub-index down -3.1% to 237.9 and refi sub-index down -1.7% to 971.3), (2) Richmond Fed President Tom Barkin (voter) speaks at an event in Roanoke, VA, (3) EIA weekly Petroleum Status Report, (4) Treasury auctions $26 billion of 10-year T-notes.
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