Overnight Markets And News
Dec E-mini S&Ps (ESZ18 +0.13%) this morning are up +0.20% and European stocks are up +0.12% at a 2-week high as global markets rally on watered-down U.S. tariffs on China. Markets initially declined late yesterday when President Trump announced a 10% tariff on more than 5,000 products from China starting next week, but world equity markets recovered and moved higher after President Trump said the 10% tariffs will not increase to 25% until January 1. 2019. China’s Ministry of Commerce said it would respond with levies on $60 billion worth of U.S. goods and President Trump said the U.S. will immediately pursue additional tariffs on $267 billion of Chinese imports if China does retaliate. Technology stocks moved higher after the U.S. list of Chinese-made products to be hit with new tariffs showed some Apple products were spared from tariffs. A rally in miners led European stocks higher after Dec COMEX copper (HGZ18 +1.51%) rose +1.72% on signs of tighter global supplies as LME copper inventories fell -7,885 MT to a 7-3/4 month low. Asian stocks settled mixed: Japan +1.41%, Hong Kong +0.56%, China +1.82%, Taiwan -0.53%, Australia -0.38%, Singapore -0.07%, South Korea +0.29%, India -0.73%. China’s Shanghai Composite recovered from a 2-1/2 year low and climbed to a 1-week high on speculation the Chinese government will take steps to offset the negative effects of U.S. tariffs. Japan’s Nikkei Stock Index climbed to a 7-1/2 month high as exporter stocks rallied after USD/JPY jumped to a 1-3/4 month high, which boosts the earnings prospects of exporters with the weaker yen.
The dollar index (DXY00 +0.08%) is up +0.06%. EUR/USD (^EURUSD unch) is up +0.03%. USD/JPY (^USDJPY +0.20%) is up +0.24% at a 1-3/4 month high.
Dec 10-year T-note prices (ZNZ18 +0-015) are down -0.5 of a tick.
The ECB said in a report that the Eurozone banking system is unlikely to restore pre-crisis levels of return on equity “due to changes in the environment, risk profile and capitalization.”
