OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 +0.28%)are up +0.29 % and European stocks are up +1.76% after the PBOC stepped up verbal support for the yuan. Weakness in the yuan subsided and spurred a rally in global stocks after the PBOC said in a rare press conference today that it supports a strong, stable currency in the long term and that the currency’s adjustment is “basically already completed.” Technology stocks also are stronger led by a 4% gain in Cisco in pre-market trading after the company late yesterday beat Q4 EPS and revenue estimates. Asian stocks closed higher: Japan +0.99%, Hong Kong +0.43%, China +1.76%, Taiwan +0.34%, Australia +0.11%, Singapore +0.99%, South Korea +0.03%, India +0.14%.
The dollar index (DXY00 +0.33%) is up +0.29%. EUR/USD (^EURUSD) is down -0.39%. USD/JPY (^USDJPY) is up +0.24%.
Sep T-note prices (ZNU15 -0.26%) are down -9.5 ticks.
In a rare press conference today, the PBOC quelled concerns that it would let the yuan freefall when Assistant PBOC Governor Zhang Xiaohui said there’s no basis for the depreciation to persist and that the currency’s adjustment is “basically already completed.” PBOC Deputy Governor added that the current exchange rate is now more consistent with economic fundamentals and the PBOC will act “when the market’s volatility is excessive, when the market begins behaving like a herd of sheep.”
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected unch at 270,000, previous +3,000 to 270,000) and continuing claims (expected -10,000 to 2.245 million, previous -14,000 to 2.255 million), (2) July retail sales (expected +0.6% and +0.4% ex autos, Jun -0.3% and -0.1% ex autos), (3) July import price index (expected -1.2% m/m and -10.7% y/y, Jun -0.1% m/m and -10.0% y/y), (4) Jun business inventories (expected +0.3%, May +0.3%), and (5) the Treasury’s auction of $16 billion of 30-year T-bonds.
