OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH18 -0.26%) this morning are down -0.23% as they retreated from a new record nearest-futures high in overnight trade after rising T-note yields undercut stock prices. The 10-year T-note yield jumped to a 3-3/4 year high of 2.72% ahead of President Trump’s State of the Union address Tuesday night and the outcome of the 2-day FOMC meeting on Wednesday. European stocks are down -0.02% as rising European government bond yields weigh on stock prices. The 10-year German bund yield climbed to a 2-year high of 0.685% after ECB Governing Council member Knot said the ECB has to end the QE program as soon as possible. Trade concerns also pressured equity prices after the European Commission said the EU is “ready to react swiftly and appropriately” to any restrictive trade measures by the U.S. that affect the bloc. Asian stocks settled mixed: Japan -0.01%, Hong Kong -0.56%, China -0.99%, Taiwan +0.67%, Australia +0.42%, Singapore +0.28%, South Korea +0.80%, India +0.65%.
The dollar index (DXY00 +0.32%) is up +0.23%. EUR/USD (^EURUSD) is down -0.26% after ECB Executive Board member Praet said the ECB “still has a way to go before inflation is on track toward its goal.” USD/JPY (^USDJPY) is up +0.09%.
Mar 10-year T-note prices (ZNH18 -0.37%) are down -11.5 ticks at a contract low and the 10-year T-note yield soared to a 3-3/4 year high of 2.72%.
ECB Governing Council member Knot said the QE program “has done what could realistically be expected of it” and the ECB has to end the program as soon as possible.
ECB Executive Board member Praet said an “ample degree of monetary accommodation is still needed” as “domestic price pressures remain subdued” and the ECB “still has a way to go before inflation is on track toward its goal.”
The German Dec import price index of +0.3% m/m and +1.1% y/y was slightly stronger than expectations of +0.2% m/m and +1.1% y/y.
