OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ16 +0.05%) are down -0.13% and European stocks are down -0.72%. A +0.07% increase in the dollar index (DXY00 +0.10%) to a new 13-1/2 year high has undercut commodity prices and is leading commodity and raw-material producing stocks lower. The likelihood of a Fed rate hike next month has also increased and is deepening a sell-off in government bond markets as the U.S. 10-year T-note yield climbed to a 10-1/2 month high of 2.33% after St. Louis Fed President Bullard said he is “leaning towards” supporting a rate increase at next month’s FOMC meeting. Asian stocks settled mixed: Japan +0.59%, Hong Kong +0.37%, China -0.49%, Taiwan +0.15%, Australia +0.39%, Singapore +0.89%, South Korea -0.10%, India -0.30%. Japan’s Nikkei Stock Index rose to a 10-1/4 month high, led by a rally in exporter stocks, after USD/JPY climbed to a 5-1/2 month high.
The dollar index (DXY00 +0.10%) is up +0.07% at a new 13-1/2 year high. EUR/USD (^EURUSD) is down -0.04% at an 11-1/2 month low after ECB President Draghi said the Eurozone economy “remains highly reliant on continued monetary support”. USD/JPY (^USDJPY) is up +0.04% at a 5-1/2 month high.
Dec 10-year T-note prices (ZNZ16 -0.10%) are down -8.5 ticks at a 10-1/2 month nearest-futures low after St. Louis Fed President Bullard said he is “leaning towards” supporting a rate increase at the Dec FOMC meeting.
St. Louis Fed President Bullard (voter) said he is “leaning towards” supporting a rate increase in December.
ECB President Draghi said “even if there are many encouraging trends in the Eurozone economy, the recovery remains highly reliant on continued monetary support” as “we do not yet see a consistent strengthening of underlying price dynamics.”
German Oct PPI of +0.7% m/m and -0.4% y/y was stronger than expectations of +0.2% m/m and -0.9% y/y with the +0.7% m/m gain the largest monthly increase in 5-1/2 years.
