Morning Call For Wednesday, March 14

OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM18 +0.29%) this morning are up +0.23% and European stocks are up +0.19% as strength in Chinese factory output bolsters confidence in the global economic outlook. May COMEX copper (HGK18 +1.24%) is up +1.07% at a 1-week high and is lifting mining stocks and raw-material producers after China Feb industrial production rose +7.2% year-to-date, the largest increase in 3-years. Asian stocks settled lower: Japan -0.87%, Hong Kong 0.53%, China -0.57%, Taiwan -0.51%, Australia -0.66%, Singapore -0.40%, South Korea -0.31%, India -0.06%. Asian stocks followed Tuesday’s losses in U.S. markets and were also under pressure on concern new Secretary of State Pompeo will advance President Trump’s agenda of imposing tariffs.

The dollar index (DXY00 +0.09%) is up +0.11%. EUR/USD (^EURUSD) is down -0.17% on dovish comments from ECB President Draghi who said policymakers need to see further evidence that inflation dynamics are moving in the right direction. USD/JPY (^USDJPY) is down -0.06%.

Jun 10-year T-note prices (ZNM18 unch) are little changed, up +0.5 of a tick.

ECB President Draghi said “we still need to see further evidence that inflation dynamics are moving in the right direction. So monetary policy will remain patient, persistent and prudent.”

Eurozone Jan industrial production fell -1.0% m/m, weaker than expectations of -0.5% m/m and the biggest decline in 13 months.

China Feb industrial production rose +7.2% year-to-date, stronger than expectations of +6.2% year-to-date and the fastest pace in 3 years.

Japan Jan core machine orders rose +8.2% m/m and +2.9% y/y, stronger than expectations of +5.2% m/m and -0.7% y/y with the +8.2% m/m gain the largest monthly increase in 2-years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +0.3% with purchase sub-index -0.5% and refi sub-index +1.5%), (2) Feb PPI final demand (expected +0.1% m/m and +2.8% y/y, Jan +0.4% m/m and +2.7% y/y) and Feb PPI ex food & energy (expected +0.2% m/m and +2.6% y/y, Jan +0.4% m/m and +2.2% y/y), (3) Feb retail sales (expected +0.3% and +0.4% ex autos, Jan -0.3% and unch ex autos), (4) Jan business inventories (expected +0.6%, Dec +0.4%), (5) EIA weekly Petroleum Status Report.