OVERNIGHT MARKETS AND NEWS
Jun E-mini S&Ps (ESM17 +0.07%) this morning are up +0.01% and European stocks are down -0.33%. U.S. equities ae being led higher by strength in energy producing stocks as Jul WTI crude oil (CLN17 +0.79%) climbs +0.89 to a 1-month high. Crude oil rallied after Saudi Arabian Energy Minister Khalid Al-Falih said that all oil producers participating in a deal to curb crude output are “on board” for an extension of crude production cuts for another 9 months. M&A activity was another positive for equity prices after Clariant AG agreed to buy Huntsman for $6.4 billion. European stocks were under pressure on Brexit concerns after Brexit Secretary Davis sad the UK may quit the Brexit talks unless the EU drops its demand for a “divorce payment” of up to 100 billion euros. Asian stocks settled mixed: Japan +0.45%, Hong Kong +0.86%, China -0.48%, Taiwan +0.50%, Australia +0.76%, Singapore -0.10%, South Korea +0.86%, India +0.35%.
The dollar index (DXY00 -0.13%) is down -0.11% at a 6-1/4 month low. EUR/USD (^EURUSD) is up +0.19% at a 6-1/4 month high on hawkish comments from German Chancellor Merkel who said the Euro is “too weak”. USD/JPY (^USDJPY) is up +0.16%.
Jun 10-year T-note prices (ZNM17 -0.07%) are down -3.5 ticks.
German Chancellor Merkel said Germany’s trade surplus is the result of the euro which is “too weak” because of ECB policy and that additional investment in Germany could help to reduce the trade surplus.
The Japan Apr trade balance was in surplus by 481.7 billion yen, narrower than expectations of 520.7 billion yen. Apr exports rose +7.5% y/y, weaker than expectations of +8.0% y/y, and Apr imports rose +15.1% y/y, stronger than expectations of +14.8% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Apr Chicago Fed national activity index (expected +0.02 to 0.10, Mar -0.19 to 0.08), (2) Philadelphia Fed President Patrick Harker (voter) speaks on the link between physical and economic wellbeing to the Jefferson College of Health Professions and Jefferson College of Pharmacy Commencement Ceremony, (3) Fed Governor Lael Brainard gives a speech on “The Roles of Opportunity and Inclusion in Strengthening the U.S. Economy” at the Minneapolis Fed, (4) USDA weekly grain export inspections, (5) USDA Apr Cold Storage, (6) USDA crop conditions and planting progress.
