OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM15 -0.06%) this morning are down -0.17% and European stocks are down -0.94% ahead of Q1 earnings results from JPMorgan Chase and Johnson & Johnson. Losses were limited on increased M&A Activity as Alcatel-Lucent SA jumped 12% in pre-market trading after Nokia Oyj said it was in advanced talks to buy the company. Asian stocks settled mixed: Japan +0.02%, Hong Kong -1.62%, China +0.34%, Taiwan -0.25%, Australia -0.23%, Singapore +1.05%, South Korea +0.79%. China’s Shanghai Composite Index climbed to a fresh 7-year high on speculation the government will boost stimulus measures to spur economic growth.
Commodity prices are mixed. May crude oil (CLK15 +1.12%) is up +0.71% and May gasoline (RBK15 +1.11%) is up +0.65% after the EIA said late Monday that U.S. crude output from the shale oil boom will decline by -57,000 bpd in May, the first time the EIA has forecast a decline in output since it began issuing a monthly drilling productivity report in 2013. Metals prices are weaker. Jun gold (GCM15 -0.90%) is down -0.92% at a 1-1/2 week low. May copper (HGK15 -1.29%) is down -1.31% at a 3-week low. Copper prices are also being weighed down by Chinese demand concerns with tomorrow’s China Q1 GDP expected to be reported at a 7.0% y/y pace, the slowest since the global recession of 2009. Agriculture prices are mixed with May wheat down -0.80% at a 2-week low after recent rains alleviated drought concerns in the U.S. Great Plains.
The dollar index (DXY00 -0.05%) is down -0.06% and EUR/USD (^EURUSD) is up +0.02%. USD/JPY (^USDJPY) is down -0.37% at a 1-week low after Koichi Hamada, a consultant to Japanese Prime Minister Abe, said that an exchange rate of 105 yen per dollar would be “appropriate,” which undercut expectations for additional easing from the BOJ.
Jun T-note prices (ZNM15Â +0.13%) are up +6.5 ticks on carry-over support from a rally in German bunds to a record high. The yield on the 10-year German bund fell to an all-time low of 0.134% after Moody’s Investors Service warned that the ECB could run out of eligible bonds to buy from some governments around the end of the year, which may force the ECB to loosen the rules of its QE program and further suppress bond yields.
