OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 +0.08%) are up +0.31% as strength in technology stocks leads U.S. equities higher. Energy producers are higher as well as crude oil (CLV15 +0.79%) rose. European stocks are down -0.75% after French Jul industrial production unexpectedly fell -0.8% m/m, weaker than expectations of +0.2% m/m. A decline in Chinese and emerging market stocks also undercut European equities. Weakness in commodity producers pressured emerging market stocks after S&P cut Brazil’s credit rating to junk with a negative outlook. Asian stocks closed mostly lower: Japan -2.51%, Hong Kong -2.57%, China -1.39%, Taiwan -0.22%, Australia -2.42%, Singapore -1.37%, South Korea +1.19%, India -0.38%. Chinese stocks closed lower on concern the economic slowdown is deeper than expected after China Aug producer prices fell by the most in nearly 6 years. Deflation concerns hurt Japanese stocks as well after Japan Aug PPI fell at the fastest pace in 5-1/2 years.
The dollar index (DXY00 +0.07%) is up +0.07%. EUR/USD (^EURUSD) is down -0.14%. USD/JPY (^USDJPY) is up +0.63% at a 1-week high on speculation that Japan will increase stimulus to thwart falling prices after Japan Aug PPI fell more than expected and after Prime Minister Abe said that October would be a “good opportunity” for the BOJ to boost stimulus.
Dec T-note prices (ZNZ15 -0.20%) are down -9.5 ticks.
As expected, the BOE maintained its benchmark interest rate at 0.50% and kept its asset purchase target unchanged at 375 billion pounds following today’s policy meeting.
ECB Governing Council member Liikanen said “the economic recovery in the Eurozone is proceeding, albeit at a slower pace than expected,” and we “will continue are asset purchases until the end of Sep 2016, or beyond, if necessary.”
China Aug CPI rose +2.0% y/y, higher than expectations of +1.8% y/y and the biggest increase in a year. Aug PPI fell -5.9% y/y, weaker than expectations of -5.6% y/y and the steepest pace of decline in 5-3/4 years.
