OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ17 -0.44%) this morning are down -0.52% at a 2-week low and European stocks are down -0.78% at a 1-3/4 month low. Global stock markets moved lower as weakness in energy and mining stocks led losses in world bourses. Energy stocks declined with Dec WTI crude oil (CLZ17 -1.10%) down -1.17% after API data late Tuesday showed U.S. crude inventories rose +6.51 million bbl last week. Mining stocks moved lower after Dec COMEX copper (HGZ17 -0.54%) slid -0.65% to a 5-week low on the prospect of slower growth in China that will curb its demand for copper and other industrial metals. Asian stocks settled lower: Japan -1.57%, Hong Kong -1.03%, China -0.79%, Taiwan -0.53%, Australia -0.58%, Singapore -0.89%, South Korea -0.43%, India -0.55%. China’s Shanghai Composite fell to a 1-week low and Japan’s Nikkei Stock Index dropped to a 2-week low, led by losses in commodity producers and energy stocks. Japanese stocks were also under pressure after Japan Q3 GDP grew at a slower-than-expected pace.
The dollar index (DXY00 -0.31%) is down -0.30% at a 3-week low after Chicago Fed President Evans said we’re facing “below-target inflation expectations.” EUR/USD (^EURUSD) is up +0.38% at a 3-week high after ECB Governing Council member Hansson said the short-term economic risks in the Eurozone are to the upside. USD/JPY (^USDJPY) is down -0.65% at a 3-week low as the sell-off in global stocks boosted the safe-haven demand for the yen.
Dec 10-year T-note prices (ZNZ17 +0.25%) are up +11.5 ticks.
Chicago Fed President Evans said we’re facing “below-target inflation expectations” and he is concerned “that persistent factors are holding down inflation, rather than idiosyncratic transitory ones.” and that he has an “open mind” when it comes toward a decision in Dec on interest rates.
ECB Governing Council member Hansson said the short-term economic risks in the Eurozone are to the upside and the ECB is increasingly confident inflation will reach the levels consistent with our aim.
Japan Q3 GDP rose +1.4% (q/q annualized), weaker than expectations of +1.5% (q/q annualized). The Q3 deflator rose +0.1% y/y, right on expectations. Q3 private consumption fell -0.5% q/q, weaker than expectations of -0.4% q/q. Q3 business spending rose +0.2% q/q, weaker than expectations of +0.3% q/q.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Chicago Fed President Charles Evans (voter) takes part in a panel discussion at a UBS European Conference in London, (2) weekly MBA mortgage applications (previous -0.03% with purchase sub-index +0.5% and refi sub-index -0.5%), (3) Oct CPI (expected +0.1% m/m and +2.0% y/y, Sep +0.5% m/m and +2.2% y/y) and Oct CPI ex food & energy (expected +0.2% m/m and +1.7% y/y, Sep +0.1% m/m and +1.7% y/y), (4) Nov Empire manufacturing index (expected -5.2 to 25.0, Oct +5.8 to 30.2), (5) Oct retail sales (expected unchanged and +0.2% ex autos, Sep +1.6% and +1.0% ex autos), (6) Sep business inventories (expected unch, Aug +0.7%), (7) EIA weekly Petroleum Status Report.
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