Morning Call For Monday, Nov. 26

Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +1.14%) this morning are up +1.13% and European stocks are up +1.15% as political risks in Italy subsided. The yield on Italy's 10-year government bond tumbled to a 1-3/4 month low of 3.162% after Italy's populist government said it is studying scenarios for a lower 2019 budget deficit target after talks with EU negotiators. Also, bank stocks in Greece rallied as political risks eased there after Greece's Eurobank Ergasias SA said it plans to sell about 7 billion euros ($8 billion) of bad loans and merge with real estate fund Grivalia Properties REIC. In addition, energy stocks are higher with Jan WTI crude oil (CLF19 +1.51%)up +1.19% on short covering following last week's plunge. Asian stocks settled mixed: Japan +0.76%, Hong Kong +1,73%, China -0.14%, Taiwan +1.10%, Australia -0.78%, Singapore +1.34%, South Korea +1.30%, India +1.07%. China's Shanghai Composite dropped to a 3-week low as losses in energy stocks led the overall market lower after Friday's plunge in crude prices to a 13-month low. A rally in Japanese exporters led the Nikkei Stock Index higher after USD/JPY climbed to a 1-week high, which boosts the earnings prospects of exporters with the weaker yen. USD/JPY rallied after the Japan Nov Nikkei manufacturing PMI fell to its slowest pace of growth in 2 years, which may prompt the BOJ to continue with its QE program.

The dollar index (DXY00 -0.15%) is down -0.15%. EUR/USD (^EURUSD +0.26%) recovered from a 1-week low and is up +0.26% after ECB Executive Board member Lautenschlaeger said the ECB might raise interest rates "in the summer or in the autumn" next year. USD/JPY (^USDJPY +0.26%) is up +0.22% at a 1-week high.

Dec 10-year T-note prices (ZNZ18 -0-040) are down -3.5 ticks.

The German Nov IFO business climate fell -0.9 to a 4-month low of 102.0, weaker than expectations of -0.5 to 102.3.

The ECB's Chief Economist Praet said "factors related to protectionism, financial market volatility and vulnerabilities in emerging markets are creating headwinds that are becoming increasingly noticeable."

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