Overnight Markets And News
Dec E-mini S&Ps (ESZ18 +0.88%) this morning are up +0.79% and European stocks are up +1.29%, both at 2-1/2 week highs, after the results of Tuesday’s U.S. midterm elections signal gridlock in Washington. Stocks rose, the 10-year T-note yield fell, and the dollar index (DXY00 -0.50%) slid to a 2-week low after Democrats moved back to the majority in the U.S. House of Representatives, which dims the chances of passage of any major budget-busting fiscal measures from the Trump administration that could have boosted T-note yields and the dollar. Energy stocks are higher after Dec WTI crude oil (CLZ18 +1.16%) climbed +1.25% when OPEC+ delegates said OPEC+ ministers, who will meet this weekend in Abu Dhabi, will discuss the prospects for fresh crude production cuts next year. OPEC ministers are concerned that rising output may oversupply the global market as OPEC crude production has risen for six consecutive months and OPEC Oct crude production climbed to an 11-month high of 33.33 million bpd. European stocks received a boost after German Sep industrial production unexpectedly rose +0.2% m/m, a sign of economic strength in Europe’s largest economy. Asian stocks settled mixed: Japan -0.28%, Hong Kong +0.10%, China -0.68%, Taiwan +0.85%, Australia +0.37%, Singapore +0.15%, South Korea -0.41%, India +0.89%. Japan’s Nikkei Stock Index retreated from a 2-week high and closed lower after USD/JPY dropped from a 4-week high and moved lower after the dollar weakened on the results of the U.S. midterm elections.
The dollar index (DXY00 -0.50%) is down -0.58% at a 2-week low. EUR/USD (^EURUSD +0.45%) is up +0.47% at a 2-week high. USD/JPY (^USDJPY -0.20%) is down -0.20%.
Dec 10-year T-note prices (ZNZ18 +0-020) are up +3.5 ticks.
Eurozone Sep retail sales were unch m/m, weaker than expectations of +0.1% m/m.
German Sep industrial production rose +0.2% m/m, stronger than expectations of no change.
Japan Sep labor cash earnings rose +1.1% y/y, right on expectations. Sep real cash earnings fell -0.4% y/y, weaker than expectations of -0.3% y/y.
U.S. Stock Preview
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -2.5% to 329.5 with purchase sub-index -1.5% to 224.9 and refi sub-index -3.8% to 884.2), (2) FOMC begins 2-day policy meeting, (3) EIA weekly Petroleum Status Report, (4) Treasury auctions $19 billion of 30-year T-bonds, and (5) Sep consumer credit expected +$15.000 billion, Aug +$20.078 billion.
