Overnight Markets And News
Dec E-mini S&Ps (ESZ18 -0.61%) this morning are down -0.53% and European stocks are down -0.85%. A slide in China’s Shanghai Composite to a 1-week low spurred selling in U.S. and European bourses and losses accelerated as energy stocks tumbled after Dec WTI crude oil (CLZ18 -1.40%) dropped -1.40% to an 8-3/4 month low. European stocks were also undercut on Italian political risks as the 10-year Italy government bond yield rose to a 1-week high of 3.458%. Italy’s government is locked in a dispute with the European Commission on its budget plans with Italy projecting a 2.4% budget deficit in its budget for next year while the EU projects an Italian budget deficit of 2.9% of GDP. The European Commission projects Italy 2019 GDP of 1.2%, below the Italian government’s estimate of 1.5%, and Italian Deputy Prime Minister Di Maio signaled Italy won’t budge in its projections as it prepares to reply to the European Commission by next Tuesday’s deadline. Asian stocks settled lower: Japan -1.05%, Hong Kong -2.39%, China -1.39%, Taiwan -1.16%, Australia -0.11%, Singapore -0.49%, South Korea -0.29%, India -0.22%. Weakness in Chinese bank stocks pushed the Shanghai Composite down to a 1-week low and the yuan fell to a 1-week low against the dollar on news the Chinese government plans to set quotas for banks to pump credit into private companies.
The dollar index (DXY00 +0.07%) is up +0.05% at a 1-week high. EUR/USD (^EURUSD -0.17%) is down -0.12% at a 1-week low on ramped up Italian political risks. USD/JPY (^USDJPY -0.19%) is down -0.18%.
Dec 10-year T-note prices (ZNZ18 +0-060) are up +5.5 ticks as stock market weakness boosts the safe-haven demand for T-notes.
UK Q3 GDP rose +0.6% q/q and +1.5% y/y, right on expectations.
UK Q3 total business investment unexpectedly fell -1.2% q/q, weaker than expectations of +0.2% q/q and the largest decline in 2-1/2 years.
UK Sep manufacturing production rose +0.2% m/m, stronger than expectations of +0.1% m/m. Sep industrial production was unch m/m, stronger than expectations of -0.1% m/m.
