Overnight Markets and News

Sep E-mini S&Ps (ESU18 +0.05%) this morning are up +0.11% at a 1-week high and European stocks are up +0.56%. Strength in energy producers is leading the overall market higher with Sep WTI crude oil (CLU18 +1.23%) up +1.47% after Saudi Arabia said it cut its crude production to 10.3 million bpd in Jul from 10.489 million bpd in Jun. Gains in stocks were limited on trade concerns after National Security Adviser Bolton said the U.S. will take the trade war “far enough to get China to change” and China said it is prepared for a “protracted trade war” and doesn’t fear sacrificing short-term economic interests. Asian stocks settled mixed: Japan -0.08%, Hong Kong +0.52%, China -1.29%, Taiwan +0.11%, Australia +0.61%, Singapore +0.60%, South Korea -0.13%, India +0.36%. China’s Shanghai Composite tumbled to a 1-month low on concern the U.S. and China are headed for a protracted trade war. The yuan recovered from Friday’s 14-month low against the dollar after the PBOC Friday night said it was imposing a reserve requirement of 20% on trading of some foreign-exchange forward contracts, making it more expensive to short the yuan. The PBOC stepped in to thwart the slide in the yuan on concern that continued weakening of the currency will lead to massive capital outflows out of China.

The dollar index (DXY00 +0.39%) is up +0.31% at a 2-week high. EUR/USD (^EURUSD -0.28%) is down -0.25% at a 1-1/4 month low after German Jun factory orders fell by the most in 17-months. USD/JPY (^USDJPY +0.26%) is up +0.17%. GBP/USD (^GBPUSD -0.55%) slumped -0.47% to an 11-month low after UK International Trade Secretary Fox said a “no-deal” Brexit is now more likely than not.

Sep 10-year T-note prices (ZNU18 -0-020) are up +1.5 ticks.

The Eurozone Jul Sentix investor confidence rose +2.6 to 14.7, stronger than expectations of +1.3 to 13.4.

ECB Governing Council member Nowotny said he supports a “faster” normalization of monetary policy, saying “a slow increase” in rates wouldn’t harm the Eurozone economy.