OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 +0.12%) this morning are up +0.16% at a new record nearest-futures high on optimism in the U.S. economy. Also, lower market volatility is positive for equity prices as the VIX volatility index dropped to a 1-1/2 week low. In addition, a +0.51% increase in Feb WTI crude oil prices (CLG18 +0.81%) has given energy stocks a boost. Crude oil rallied on expectations EIA data tomorrow will show U.S. crude inventories fell -5.0 million bbl, the seventh weekly decline. European stocks are up +0.19% on signs of strength in Germany, Europe’s largest economy after German unemployment fell more than expected last month and the unemployment rate dropped to a record low of 5.5%. Asian stocks settled mostly higher: Japan closed for holiday, Hong Kong +0.15%, China +0.62%, Taiwan +0.85%, Australia +0.15%, Singapore +0.99%, South Korea +0.35%, India -0.06%. Strength in technology stocks lifted most Asian markets with China’s Shanghai Composite climbing to a 1-1/4 month high.

The dollar index (DXY00 +0.19%) is up +0.25%. EUR/USD (^EURUSD) is down -0.32%. USD/JPY (^USDJPY) is down -0.06%.

Mar 10-year T-note prices (ZNH18 +0.09%) are up +2.5 ticks.

ECB Governing Council member Nowotny said the end of the ECB asset-purchase program is “within sight.”

The German Dec unemployment change fell -29,000, stronger than expectations of -13,000. The Dec unemployment rate was unch at 5.5%, as expected and the lowest since German reunification in 1991.

The UK Dec Markit/CIPS construction PMI fell -0.9 to 52.2, weaker than expectations of -0.1 to 53.0.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications, (2) Dec ISM manufacturing index (expected unch at 58.2, Nov -0.5 to 58.2), (3) Nov construction spending (expected +0.5%, Oct +1.4% m/m), (4) minutes of the Dec 12-13FOMC meeting, (5) Dec total vehicle sales (expected 17.50 million, Nov 17.40 million).

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