Overnight Markets And News
Dec E-mini S&Ps (ESZ18 +0.01%) this morning are down -0.18% at a 1-week low and European stocks are down -0.57% at a 2-week low as Eurozone political risks weigh on stocks. GBP/USD is down -0.19% as UK Prime Minister May will ask her divided Cabinet ministers to back her Brexit deal or quit and Italy’s 10-year government bond yield rose to a 2-1/2 week high of 3.56% after Italy’s populist government refused to revise its budget for next year. The European Commission, who rejected a first draft of Italy’s budget last month, must now decide if it will start a long and complex process that could lead to several billion euros in fines for Italy. Asian stocks settled mostly lower: Japan +0.16%, Hong Kong -0.54%, China -0.85%, Taiwan +0.16%, Australia -1.74%, Singapore -0.34%, South Korea -0.30%, India -0.01%. Japanese stocks moved higher on trade optimism on a report the Trump administration will hold off for now on imposing new tariffs on automobile imports while Chinese stocks moved lower on a mixed bag of economic data that showed China Oct retail sales rose less than expected but China Oct industrial production strengthened.
The dollar index (DXY00 -0.04%) is up +0.01%. EUR/USD (^EURUSD -0.08%) is down -0.12%. USD/JPY (^USDJPY+0.05%) is up +0.05%.
Dec 10-year T-note prices (ZNZ18 +0-010) are up +1.5 ticks.
Eurozone Q3 GDP was left unrevised at +0.2% q/q and +1.7% y/y.
Eurozone Sep industrial production of -0.3% m/m and +0.9% y/y was stronger than expectations of -0.4% m/m and +0.3% y/y.
German Q3 GDP of -0.2% q/q and +1.1% y/y was weaker than expectations of -0.1% q/q and +1.2% y/y.
UK Oct CPI rose +0.1% m/m and +2.4% y/y, weaker than expectations of +0.2% m/m and +2.5% y/y. Oct core CPI rose +1.9% y/y, right on expectations.
Japan Q3 GDP fell -1.2% (q/q annualized), weaker than expectations of -1.0% (q/q annualized). The Q3 GDP deflator fell -0.3% y/y, weaker than expectations of -0.1% y/y.
China Oct industrial production rose +5.9% y/y, stronger than expectations of 5.8% y/y.
China Oct retail sales rose +8.6% y/y, weaker than expectations of +9.2% y/y.
U.S. Stock Preview
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -4.0% to 316.2 with purchase sub-index -5.0% to 213.6 and refi sub-index -2.5% to 861.8), (2) Oct CPI (expected +0.3% m/m and +2.5% y/y, Sep +0.1% m/m and +2.3% y/y) and Oct CPI ex food & energy (expected +0.2% m/m and +2.2% y/y, Sep +0.1% m/m and +2.2% y/y), (3) Fed Vice Chair Randal Quarles appears before the House Financial Services Committee on banking supervision, (4) Fed Chair Jerome Powell discusses national and global economic issues with Dallas Fed President Robert Kaplan (non-voter) at an event hosted by the Dallas Fed.
