Morning Call For Wednesday, June 14

OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU17 +0.12%) this morning are up +0.11% and European stocks are up +0.81% as strength in technology stocks leads the overall market higher. Optimism in the global economy is another positive for equity prices after the IMF raised its China 2017 GDP estimate to 6.7% from a 6.6% estimate in Apr. European stocks also found support after data showed Eurozone Q1 employment rose +1.5% y/y, the largest increase in 9-years. Weakness in energy stocks limited gains in the overall market as Jul WTI crude oil (CLN17 -1.23%) slid -1.08% after API data late Tuesday showed U.S. crude inventories rose +2.75 million bbl last week. Trading activity was light ahead of the conclusion of today’s FOMC meeting where the Fed is expected to raise the fed funds target range by 25 bp, but the markets will look to future Fed guidance and when it may begin to reduce its balance sheet. Asian stocks settled mostly lower: Japan -0.08%, Hong Kong +0.09%, China -0.73%, Taiwan -0.55%, Australia +1.06%, Singapore -0.13%, South Korea -0.02%, India +0.17%.

The dollar index (DXY00 +0.09%) is up +0.07%. EUR/USD (^EURUSD) is down -0.09%. USD/JPY (^USDJPY) is up +0.18%.

Sep 10-year T-note prices (ZNU17 +0.02%) are up +3 ticks.

The International Monetary Fund (IMF) raised its China 2017 GDP estimate to 6.7% from a 6.6% estimate in Apr.

China May industrial production rose +6.5% y/y, unch from Apr and stronger than expectations of +6.4% y/y.

Eurozone Apr industrial production rose +0.5% m/m and +1.4% y/y, right on expectations.

Eurozone Q1 employment rose +0.4% q/q and +1.5% y/y with the +1.5% y/y gain the largest year-on-year increase in 9 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +7.1% with purchase sub-index +10.0% and refi sub-index +3.4%), (2) May CPI (expected unch m/m and +2.0% y/y, Apr +0.2% m/m and +2.2% y/y) and May CPI ex food & energy (expected +0.2% m/m and +1.9% y/y, Apr +0.1% m/m and +1.9% y/y), (3) May retail sales (expected +0.1% and +0.1% ex autos, Apr +0.4% and +0.3% ex autos), (4) Apr business inventories (expected -0.1%, Mar +0.2%), (5) FOMC announces interest rate decision with expected +25 bp increase in the fed funds target range to 1.00%-1.25%, (6) EIA Weekly Petroleum Status Report.