OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU15 -0.40%) are down -0.23% and European stocks are down -0.52% on Greek debt concerns after the Bild reported that a growing number of German Chancellor Merkel’s CDU members of parliament object to further financial aid to Greece and were preparing for a Greek default, including capital controls for Greek banking clients. Stocks pared their declines after German Finance Ministry spokesman Jaeger said that Germany doesn’t see that the IMF aborted the Greek debt talks, but that they were “a call, a warning to Greece to intensify the talks” to gain an agreement. Asian stocks closed mostly higher: Japan +0.12%, Hong Kong +1.39%, China +0.87%, Taiwan -0.01%, Australia -0.21%, Singapore +0.18%, South Korea -0.26%, India +0.21%. China’s Shanghai Composite Index climbed to a fresh 7-1/3 year high on speculation policy makers will boost stimulus. According to China Merchant Bank Co., the PBOC may cut banks’ reserve requirement ratios as early as this weekend.
Commodity prices are mostly lower as the dollar strengthened. Jul crude oil (CLN15 -0.94%) is down -1.00%. Jul gasoline (RBN15 -1.31%) is down -1.41%. Metals prices are mixed. Aug gold (GCQ15 -0.03%) is down -0.11%. Jul copper (HGN15 +0.26%) is up +0.34% after weekly Shanghai copper inventories fell -10,567 MT to a 4-1/2 month low of 134,816 MT. Agricultural prices are weaker.
The dollar index (DXY00 +0.45%) is up +0.480 (+0.51%). EUR/USD (^EURUSD) is down -0.0070 (-0.62%) on euro negative comments from German Chancellor Merkel. USD/JPY (^USDJPY) is up +0.36 (+0.29%).
Sep T-note prices (ZNU15 +0.01%) are down -4.5 ticks.
EUR/USD moved lower after German Chancellor Merkel said that a too-strong euro makes it harder “for countries like Portugal, Spain, Ireland, but especially Spain and Portugal,” to harvest the fruits of their economic reforms, especially in terms of exports.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) May final-demand PPI (expected +0.4% m/m and -1.1% y/y after April’s -0.4% m/m and -1.3% y/y) and May final-demand core PPI (expected +0.1% m/m and +0.7% y/y after April’s -0.2% m/m and +0.8% y/y), and (2) preliminary-June U.S. consumer sentiment index from the University of Michigan (expected +0.5 to 91.2 after May’s -5.2 to 90.7).
