OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU14 -0.26%) this morning are down -0.34% at a 2-month low and European stocks are down -1.41% at a 4-1/2 month low amid escalating tension in Ukraine. The Polish Foreign Ministry said the risk of Russia invading Ukraine has increased in the “last dozen hours or so” after Russian President Putin increased the number of troops on his country’s western border. Concern over the European economy is another negative for stocks after German factory orders unexpectedly fell by the most in 2-3/4 years and after Italy Q2 GDP fell -0.2% q/q after falling -0.1% q/q in Q1, which pushes Italy into recession. Asian stocks closed mostly lower: Japan -1.05%, Hong Kong -0.26%, China -0.26%, Taiwan +0.03%, Australia-0.12%, Singapore -0.22%, South Korea -0.38%, India -0.94%. Commodity prices are mixed. Sep crude oil (CLU14 +0.37%) is up +0.21%. Sep gasoline (RBU14 +0.88%) is up +0.71%. Dec gold (GCZ14 +0.41%) is up +0.47%. Sep copper (HGU14 -1.08%) is down -1.11% at a 2-week low. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.44%) is up +0.43% at a 10-3/4 month high. EUR/USD (^EURUSD) is down-0.25% at an 8-3/4 month low. USD/JPY (^USDJPY) is down -0.22%. Increased safe-haven demand from a slide in stocks has boosted U.S. and German government bonds with Sep T-note prices (ZNU14 +0.20%) up +8.5 ticks at a 2-week high and as the yield on the 10-year German bund fell to 1.100%, the lowest on record.
German Jun factory orders unexpectedly fell -3.2% m/m, much weaker than expectations of +0.9% m/m and the largest monthly decline in 2-3/4 years. On an annual basis Jun factory orders fell -2.4%, weaker than expectations of +1.1% y/y.
UK Jun industrial production rose +0.3% m/m and +1.2% y/y, weaker than expectations of +0.6% m/m and +1.5% y/y.
UK Jun manufacturing production rose +0.3% m/m and +1.9% y/y, less than expectations of +0.6% m/m and +2.1% y/y.
