OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM15 +0.43%) this morning are up +0.60% and European stocks are up +0.89% as China boosted stimulus after the PBOC cut banks’ reserve ratio requirements by 1 percentage point, the biggest cut since 2008. European stocks also benefitted from an increase in M&A activity as Tenet Group Holding NV jumped over 4% after it bought Belgian mobile-phone business Base for 1.33 billion euros ($1.43 billion). Asian stocks closed mostly lower: Japan -0.09%, Hong Kong -2.02%, China -1.64%, Taiwan -0.a9%, Australia -0.76%, Singapore -0.62%, South Korea +0.10%, India-1.95%. Japan’s Nikkei Stock Index fell to a 2-week low on carry-over weakness from Friday’s slide in U.S. stocks, while China’s Shanghai Composite Index retreated from a 7-year high after Chinese regulators on Friday tightened rules on buying stocks with borrowed money and bolstered short selling of stocks.
Commodity prices are mostly lower as the dollar strengthened. May crude oil (CLK15 -1.51%) is down -0.04% and May gasoline (RBK15 -1.58%) is down -0.27%. Losses were limited on speculation the action by China to boost stimulus will spur economic growth and energy demand. Metals prices are weaker. Jun gold (GCM15 -0.37%) is down -0.35%. May copper (HGK15 -1.48%) is down -1.05%. Agriculture prices are mixed.
The dollar index (DXY00 +0.41%) is up +0.44%. EUR/USD (^EURUSD) is down -0.67% as European leaders continue to wrangle with Greece over how to secure future financing. USD/JPY (^USDJPY) is up +0.13%.Â
Jun T-note prices (ZNM15 -0.19%) are down -8 ticks as stock rallied.
The PBOC cut the reserve-requirement ratio for banks by 1 percentage point to 18.5% in an attempt to boost lending and stimulate growth. It was the second time this year the PBOC cut banks’ reserve requirements and follows Saturday’s comments from PBOC Governor Zhou Xiaochuan who said “we have room in the reserve ratio and our interest rates are not zero yet.”
