Morning Call For October 12, 2015

OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 unch) are little changed, up +0.06%, and European stocks are down -0.17% as the markets await U.S. Q3 company earnings results this week to gauge whether the economy is strong enough to handle an interest rate increase from the Fed. U.S. government offices and government bond trading are closed today for the Columbus Day Holiday.

Losses in stocks were contained on signs of increased M&A activity with EMC Corp. up over 7% in pre-market trading after a person with knowledge of the matter said that Dell is offering about $33 a share to acquire the company. Also, a slide in the dollar index to a 3-week low gave commodity prices a lift and boosted the shares of commodity producers. Asian stocks settled mostly higher: Japan closed for holiday, Hong Kong +1.21%, China +3.28%, Taiwan +1.51%, Australia -0.89%, Singapore +1.12%, South Korea +0.19%, India-0.65%. China's Shanghai Composite rose over 3% to a 1-1/2 month high on speculation the PBOC will cut interest rates or reserve-requirement ratios as Chinese economic data this week will likely show a slowdown in exports and a deceleration in inflation.

The dollar index (DXY00 -0.09%) is down -0.06% at a 3-week low. EUR/USD (^EURUSD) is up +0.10% at a 3-week high. USD/JPY (^USDJPY)is down-0.12%.

Dec T-note prices (ZNZ15 +0.04%) are up +2.5 ticks.

Speaking Sunday at the International Monetary Fund's annual meeting in Lima, Peru, Fed Vice Chair Fischer said that the U.S. economy may be strong enough to merit an interest rate increase by year end, although policy makers are monitoring slower domestic job growth and international developments in deciding the precise timing of liftoff.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Atlanta Fed President Dennis Lockhart's speech on the economic outlook to the Association for University Business and Economic Research in Orlando, FL, (2) Chicago Fed President Charles Evans' speech on on monetary policy and the economy at the World Steel Association conference, (3) and Fed Governor Lael Brainard's speech on the economic outlook and monetary policy at the annual meeting of the National Association for Business Economic. U.S. government offices and the cash government bond market is closed today for Columbus Day. Interest rate futures trade regular hours on Globex and U.S. stock market is open during regular hours.

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