Morning Call For Aug. 18, 2014

OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 +0.55%) this morning are up +0.49% at a 2-week high and European stocks are up +1.06% on reduced geopolitical tensions as Ukraine and Russia met for peace talks. The yield on Ireland's 10-year bond fell to 1.949%, the lowest since Bloomberg data began in 1991, after Fitch upgraded Ireland's credit rating to A- from BBB+. Asian stocks closed mixed: Japan +0.03%, Hong Kong unchanged, China +0.59%, Taiwan -0.71%, Australia +0.37%, Singapore -0.06%, South Korea -0.62%, India +1.10%. China's Shanghai Stock Index climbed to an 8-1/4 month high on speculation that sliding property prices will prompt the PBOC to loosen monetary policy in order to support the economy. China's 7-day repurchase rate also fell to a 1-3/4 month low of 3.20% after China Jul new home prices fell in 64 out of 70 cities tracked by the government. Commodity prices are mixed. Sep crude oil (CLU14 -0.96%) is down -1.01% after Kurdish forces made progress against militants in northern Iraq and after Libyan oil production rose to 540,000 bpd from 415,000 bpd on Aug 14. Sep gasoline (RBU14 -1.05%) is down -0.96%. Dec gold (GCZ14 -0.34%) is down -0.24%. Sep copper (HGU14 +0.13%) is unchanged. Agriculture prices are mixed. The dollar index (DXY00 +0.02%) is up +0.050% (+0.06%). EUR/USD (^EURUSD) is down -0.0011 (-0.08%). USD/JPY (^USDJPY) is up +0.11 (+0.11%). Sep T-note prices (ZNU14 -0.16%) are down -7 ticks.

In its monthly report for Aug, the Bundesbank said that "the economic outlook for the German economy has clouded over in the middle of the year in response to unfavorable international news and that expectations for a strengthening of economic momentum in the second half of 2014 underlying the spring projections are called into question by current data."

China July new-home prices fell in 64 of the 70 cities tracked by the National Bureau of Statistics, the most since Jan 2011 when the government changed the way it compiles the data.

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