OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH15 +0.13%) this morning are up +0.12% and European stocks are up +0.25% in thin holiday trade. Many European equity markets close early today and U.S. and all European markets will be closed tomorrow for New Year’s day. Greek sovereign-debt risks remain elevated as the Greek 10-year bond yield climbed to a 1-1/4 year high of 9.745% on concern that elections on Jan 25 may give power to the anti-austerity Syriza party that seeks to renegotiate Greek’s debt. Asian stocks closed mixed: Japan and South Korea closed for holiday, Hong Kong +0.44%, China +2.20%, Taiwan +0.42%, Australia -0.10%, Singapore -0.03%, India +0.35%. China’s Shanghai Stock Index rallied up to a 4-3/4 year high on speculation the government will boost stimulus measures along with increased M&A activity after China CNR Corp. and CSR Corp., China’s biggest train makers, agreed to merge. Commodity prices are mostly lower. Feb crude oil (CLG15 -2.18%) is down -1.77%. Feb gasoline (RBG15 -3.17%) is down -2.35% at a 5-1/2 year low. Feb gold (GCG15 -0.18%) is down -0.27%. Mar copper (HGH15 -0.53%) is down -0.54%. Agriculture prices are weaker. The dollar index (DXY00 -0.06%) is down -0.11%. EUR/USD (^EURUSD) is down -0.03%. USD/JPY (^USDJPY) is down -0.12%. Mar T-note prices (ZNH15+0.16%) are up +7.5 ticks at a 1-week high.
Comments from ECB Chief Economist Praet signal the ECB may be closer to implementing QE when he said the Eurozone could see “negative inflation during a substantial part of 2015” amid a slide in crude prices. He added that “Inflation expectations are extremely fragile” and “the risk of second-round effects seems to be greater today than it was in the past” and that the Governing Council “cannot simply look through that.”
The China Dec HSBC manufacturing PMI was unexpectedly revised higher to 49.6, better than expectations of unch at 49.5 but still the slowest pace of expansion in 7 months.
