Overnight Markets and News
Sep E-mini S&Ps (ESU18 -0.13%) this morning are down -0.10%, although European stocks are up +0.38% as global trade fears persist. European stocks caught a bid after S&P Global Ratings raised Greece’s long-term credit rating to B+ from B with a stable outlook, a sign the country’s finances are improving. Asian stocks settled mixed: Japan +0.02%, Hong Kong -0.28%, China -0.52%, Taiwan -0.41%, Australia -0.21%, Singapore +0.61%, South Korea -0.20%, India +0.06%. China’s Shanghai Composite fell to a new 2-year low as trade war risks intensified and the Chinese yuan tumbled to a 6-month low against the dollar at 6.5815. The yuan has fallen sharply over the past week with losses picking up after the PBOC on Sunday lowered banks’ reserve requirements. Japan’s Nikkei Stock Index recovered from a 3-week low and closed higher after a rally in bank and utility stocks led the overall market higher.
The dollar index (DXY00 +0.21%) is up +0.24%. EUR/USD (^EURUSD -0.26%) is down -0.32% on dovish comments from ECB Governing Council member Hansson who said the ECB will remain “rather expansionary” even after the end of QE net purchases in December. USD/JPY (^USDJPY -0.11%) is down -0.11% and matched Monday’s 2-week low.
Sep 10-year T-note prices (ZNU18 -0-005) are down -1 tick.
ECB Governing Council member Hansson said trade war risks are large and “scary.” Global supply chains are “very fragile” and “when these get disrupted then consequences can be rather big.” The ECB will remain “rather expansionary” even after the end of QE net purchases in December.
Japan May PPI services rose +1.0% y/y, right on expectations and matched April’s increase as the biggest in 3-years.
U.S. Stock Preview
Key U.S. news today includes: (1) Apr S&P CoreLogic composite-20 home price index (expected +0.4% m/m and +6.8% y/y, Mar +0.53% m/m and +6.79% y/y), (2) Jun Richmond Fed manufacturing index (expected -1 to 15, May +19 to 16), (3) Jun Conference Board U.S. U.S. consumer confidence index (expected unch at 128.0, May +2.4 to 128.0), (4) Treasury auctions $34 billion of 2-year T-notes, (5) Atlanta Fed President Raphael Bostic (voter) speaks at an event in Birmingham, AL, (6) Dallas Fed President Robert Kaplan (non-voter) speaks at an event in Houston, TX.
