Morning Call For Tuesday, August 15


Sep E-mini S&Ps (ESU17 +0.26%) this morning are up +0.20% and European stocks are up +0.40% as tensions between the U.S. and North Korea wane, which is fueling gains in global equity markets. The VIX volatility index fell for a third day and Dec COMEX gold prices (GCZ17 -0.81%) declined -0.81% on reduced safe-haven demand after a North Korean media report signaled that North Korean President Kim Jong Un had decided not to launch missiles toward Guam. Gains in European stocks were contained after German Q2 GDP expanded at a slower than expected pace, while weakness in energy stocks limited the upside in U.S. markets as Sep WTI crude oil (CLU17 -0.46%) slid -0.38% to a 3-week low. GBP/USD fell -0.69% to a 1-month low on weaker-than-expected UK Jul CPI, which may keep the BOE from tapering its QE program. Asian stocks settled mostly higher: Japan +1.11%, Hong Kong -0.28%, China +0.43%, Taiwan +0.84%, Australia +0.47%, Singapore -0.42%, South Korea and India closed for holiday. Chinese stocks also found support on stronger-than-expected China Jul aggregate financing, the broadest measure of credit, and Japanese exporters led gains in the Nikkei Stock Index as USD/JPY rose for a second day.

The dollar index (DXY00 +0.36%) is up +0.34%. EUR/USD (^EURUSD) is down -0.21%. USD/JPY (^USDJPY) is up +0.71%.

Sep 10-year T-note prices (ZNU17 -0.22%) are down -9 ticks.

German Q2 GDP rose +0.6% q/q, weaker than expectations of +0.7% q/q.

UK Jul CPI of -0.1% m/m and +2.6% y/y was weaker than expectations of unch m/m and +2.7% y/y. Jul core CPI rose +2.4% y/y, weaker than expectations of +2.5% y/y.

China Jul new yuan loans rose 825.5 billion yuan, stronger than expectations of +800.0 billion yuan. Jul aggregate financing increased by 1.22 trillion yuan, stronger than expectations of 1.00 trillion yuan.


Key U.S. news today includes: (1) Jul import price index (expected +0.1% m/m, Jun -0.2% and +0.1% ex-petroleum), Jul export price index (expected +0.2% m/m, Jun -0.2% m/m and +0.6% y/y), (2) Aug Empire manufacturing survey general business conditions (expected +0.2 to 10.0, Jul -10.0 to 9.8), (3) Jul retail sales (expected +0.3% and +0.4% ex autos, Jun -0.2% and -0.2% ex autos), (4) Aug NAHB housing market index (expected unch at 64, Jul -2 to 64), (5) Jun business inventories (expected +0.4%, May +0.3%).

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Disclosure: None.

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