OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM15 +0.25%) this morning are up +0.27% and European stocks are up +0.85% after global bond markets rallied and after Eurozone Q1 GDP expanded as expected. The British pound fell back from a 4-3/4 month high against the dollar after the BOE cut its 2015 UK GDP forecast and after BOE Governor Carney signaled the BOE may keep interest rates at record lows for longer than expected. Asian stocks closed mixed: Japan +0.71%, Hong Kong -0.58%, China -0.58%, Taiwan +0.45%, Australia +0.71%, Singapore +0.31%, South Korea +0.70%, India +1.39%. China’s Shanghai Composite Index closed lower after China Apr fixed-asset investment growth grew at the slowest pace in over 14 years and after China Apr industrial production rose less than expected.
Commodity prices are mostly higher. Jun crude oil (CLM15 +0.91%) is up +0.67% and Jun gasoline (RBM15 +0.33%) is up +0.17% ahead of today’s EIA data where crude inventories are expected to fall -250,000 bbl. Metals prices are mixed. Jun gold (GCM15 +0.39%) is up +0.07%. Jul copper (HGN15 -0.12%) is down -0.12%. Agriculture prices are mixed.
The dollar index (DXY00 -0.11%) is down -0.04%. EUR/USD (^EURUSD) is up +0.08%. USD/JPY (^USDJPY) is down -0.12%.
Jun T-note prices (ZNM15 +0.20%) are up +8.5 ticks on a rebound in global government bond markets.
The BOE cut its 2015 UK GDP forecast to 2.5% from a 2.9% forecast in Feb and raised its 2015 inflation forecast to +0.6% from a Feb estimate of +0.5%. BOE Governor Carney said that “persistent headwinds continue to weigh on the U.K. economy” and that this may require “not only a more gradual rate of increase in bank rates than in previous cycles, but also require the level of bank rates to remain below average historical levels for some time to come.”
Eurozone Q1 GDP rose +0.4% q/q and +1.0% y/y, right on expectations.
China Apr fixed asset investment (excluding rural households) rose +12.0% y/y, weaker than expectations of +13.5% y/y and the slowest pace of investment growth since Dec 2000.
