OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH15 +0.38%) this morning are up +0.30% on dovish comments by ECB President and on slightly stronger-than-expected Chinese PMI figures. The Euro Stoxx 50 index this morning is down -0.29%. Asian stocks today closed higher: Hong Kong +1.07%, Australia +0.46%, Singapore +0.16%, South Korea +0.30%, India +1.38%, Turkey -0.49%. The Japanese, Chinese and Taiwan stock markets remained closed today. The dollar index (DXY00 +0.58%) this morning is up +0.51% at a new high, while EUR/USD (^EURUSD) fell to a new 4-1/2 year low this morning on dovish Draghi comments and is down -0.47%. USD/JPY (^USDJPY) is up +0.67%. Mar 10-year T-note prices (ZNH15 -0.20%) are down -8.5 ticks. Commodity prices are up by an average +0.19% this morning. Feb crude oil (CLG15 -1.86%) is up +0.28% and Feb gasoline (RBG15 -2.05%) is up +0.29%. Feb gold (GCG15 -0.55%) is down -0.17% on the stronger dollar. Mar copper (HGH15 -0.14%) is down -0.09%. Agriculture futures markets have yet to start trading this morning.
ECB President Draghi said in an interview published today that, “The risk that we don’t fulfill our mandate of price stability is higher than it was six months ago.” He added, “We are in technical preparations to alter the size, speed and composition of our measures at the beginning of 2015, should this become necessary, to react to a too-long period of low inflation. There’s unanimity in the ECB council on that.” Mr. Draghi’s comments support market expectations that the ECB will announce the purchase of sovereign bonds at its next meeting on Jan 22. His comments were bearish for EURUSD this morning and supportive for Eurozone bond prices.
Russian oil production in December rose +0.3% to 10.667 million bpd, according to a division of the Russian Energy Ministry, which was a post-Soviet record high. That indicates that sanctions have not yet slowed down Russian oil production and that Russia is clearly not joining any effort by OPEC to rein in world oil production.
