OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ14 -0.12%) this morning are down -0.22% and European stocks are down -0.37%% as energy producing stocks sank after OPEC refrained from reducing output and kept its production ceiling of 30 million bpd. The inaction by OPEC prompted a plunge in crude prices to a 4-1/2 year low and drove down the outlook for inflation which sent the yields on government bonds dropping worldwide. The yield on the German 10-year bund tumbled to a record low of 0.694% on speculation the ECB will expand stimulus after the Eurozone Nov CPI increased at the slowest pace in 5 years and after ECB President Draghi said the central bank “is unanimous in its commitment to using additional unconventional instruments to address the risks of too prolonged a period of low inflation.” Asian stocks closed mostly higher: Japan +1.23%, Hong Kong -0.07%, China +1.97%, Taiwan +0.24%, Australia -1.63%, Singapore +0.29%, South Korea +0.16%, India +0.90%. China’s Shanghai Stock Index soared to a 3-1/4 year high on expectations for additional stimulus along with the plunge in crude oil prices, which will reduce energy costs and boosts profits for Chinese manufacturing and consumption industries as China is biggest importer of crude oil in the world. Commodity prices are lower. Jan crude oil (CLF15-6.12%) is down -6.45% at a 4-1/2 year low after OPEC took no action at its meeting yesterday to lower its crude output levels. Jan gasoline (RBF15-6.10%) is down -6.29% at a 4-year low. Dec gold (GCZ14 -1.29%) is down -1.25% at a 1-week low. Dec copper (HGZ14 -1.45%) is down -1.64% at a 4-1/3 year low after LME copper inventories climbed to a 5-1/2 month high. Agriculture prices are unch. The dollar index (DXY00 +0.45%) is up +0.46%. EUR/USD (^EURUSD) is up +0.10%. USD/JPY (^USDJPY) is up +0.45%. Dec T-note prices (ZNZ14 +0.16%) are up +6.5 ticks at a 1-month high on positive carry-over from a rally in German bunds to an all-t-me high. Also, the plunged in crude oil prices to a 4-1/2 year low sent the U.S. break-even rate, a gauge of inflation expectations, down to the lowest in 3 years.
