Morning Call For Tuesday, Oct. 9

Overnight Markets And News

Dec E-mini S&Ps (ESZ18 -0.59%) this morning are down -0.39% and European stocks are down -0.38% at a 4-week low on a gloomier economic outlook. The IMF cut its global 2018 GDP forecast to 3.7% from 3.9% and ECB Governing Council member Vasiliauskas warned that the “risk of a sudden tightening of international financial conditions is becoming increasingly plausible” due to normalization of U.S. monetary policy. The 10-year T-note yield rose to a fresh 7-1/3 year high of 3.259% and the yield on Italy’s 10-year bond jumped to a 4-1/2 year high of 3.71% after Italian Deputy Prime Minister Salvini harshened his rhetoric with the EU calling the bureaucrats in Brussels the “enemies of Europe.” Nov WTI crude oil (CLX18 +0.61%) is up +0.75% as Hurricane Michael speeds north through the Gulf of Mexico and has shuttered 19% of crude production in the Gulf as oil platforms closed ahead of the approaching storm. Asian stocks settled mixed: Japan -1.32%, Hong Kong -0.11%, China +0.17%, Taiwan +0.10%, Australia -0.97%, Singapore -0.47%, South Korea closed for holiday, India -0.51%. Japan’s Nikkei Stock Index tumbled to a 3-week low on trade concerns and after USD/JPY fell to a 1-week low Monday, which undercut exporter stocks. China’s Shanghai Composite closed higher as the yuan rose against the dollar after Chinese Foreign Ministry spokesman Lu Kang said China has no intention to stimulate exports via competitive currency devaluation.

The dollar index (DXY00 +0.34%) is up +0.31%. EUR/USD (^EURUSD -0.43%) is down -0.40% at a 1-1/2 month low after German Aug exports unexpectedly declined. USD/JPY (^USDJPY -0.03%) is down -0.03%.

Dec 10-year T-note prices (ZNZ18 -0-040) are down -4.5 ticks.

ECB Governing Council member Vasiliauskas said the global “economic outlook is becoming gloomier, especially in terms of international trade,” and the “risk of a sudden tightening of international financial conditions is becoming increasingly plausible” due to normalization of U.S. monetary policy.