Overnight Markets And News
Dec E-mini S&Ps (ESZ18 +0.67%) this morning are up +0.71% and European stocks are up +0.59% on optimism about progress on the U.S.-China trade dispute. U.S. Treasury Secretary Mnuchin and Chinese Vice Premier Liu He have resumed talks on trade and the South China Post reported a potential Washington visit by Liu He ahead of a meeting between the two countries’ leaders set for the end of this month. European stocks also found support on an unexpected increase in German Oct ZEW investor sentiment. Dec WTI crude oil (CLZ18 -1.94%) slumped -2.04% to a 9-month low on oversupply concerns amid weak demand. In its monthly report, OPEC cut its 2019 global crude demand for OPEC crude to 31.5 million bpd, -500,000 bpd lower than its forecast in Sep and about 1.4 million bpd below current production. Crude prices were also under pressure after President Trump said crude “should be much lower based on supply.” Asian stocks settled mixed: Japan -2.06%, Hong Kong +0.62%, China +0.93%, Taiwan -0.56%, Australia -1.80%, Singapore -0.47%, South Korea -0.69%, India +0.95%. Japan’s Nikkei Stock Index tumbled to a 2-week low as weakness in technology stocks led the market lower as supplies of Apple sold-off on signs of weak iPhone demand. China’s Shanghai Composite erased early losses and moved higher on reports that trade talks with the U.S. have resumed. Chinese stocks also found support after weak Oct China credit growth data bolstered speculation the government will increase steps to boost economic growth after Oct China new yuan loans rose at the slowest pace this year.
The dollar index (DXY00 -0.14%) is down -0.11%. EUR/USD ^EURUSD +0.37%) is up +0.29%. USD/JPY (^USDJPY+0.10%) is up +0.16%.
Dec 10-year T-note prices (ZNZ18 -0-030) are down -2.5 ticks.
The German Nov ZEW survey expectations of economic growth unexpectedly rose +0.6 to -24.1, stronger than expectations of -1.3 to -26.0.
ECB Chief Economist Praet said the plan to cap bond-buying at the end of this year “is not tantamount to a withdrawal of monetary policy accommodation,” and “significant” stimulus is still needed to support inflation.
China Oct new yuan loans were 697 billion yuan, weaker than expectations of 904.5 billion yuan and the smallest in 10 months. Oct aggregate financing rose 728.8 billion yuan, weaker than expectations of 1.300 trillion yuan.
U.S. Stock Preview
Key U.S. news today includes: (1) Minneapolis Fed President Neel Kashkari (non-voter) speaks at a regional economic conference on immigration, (2) Fed Governor Lael Brainard speaks about artificial intelligence and the new financial landscape at a fintech conference at the Philadelphia Fed, (3) Oct monthly budget statement (expected -$100.0 billion, Sep +$119.1 billion).
