Morning Call For Aug. 25, 2014

OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 +0.35%) this morning are up +0.31% at a record high and European stocks are up +1.06% at a 3-week high on increased M&A activity. Burger King Worldwide gained over 5% in pre-market trading after saying it is in talks to acquire Tim Hortons Inc., which would make it the third-largest fast-food chain if the merger takes place. Intermune surged 35% in pre-market trading after Roche Holding AG said it purchased the biotechnology company for $8.3 billion. European stocks also received support on speculation the ECB may boost stimulus measures to support growth after a gauge of German business confidence fell for a fourth month and after ECB President Draghi said late last Friday at a Fed symposium in Jackson Hole, Wyoming that ECB policy makers "stand ready to adjust our policy stance further" and will us all available instruments to "ensure price stability over the medium term." Asian stocks closed mostly higher: Japan +0.48%, Hong Kong +0.22%, China -0.95%, Taiwan +0.11%, Australia -0.19%, Singapore +0.14%, South Korea +0.08%, India +0.07%. Japan's Nikkei Stock Index rose as exporters rallied on the prospects of improved earnings after the yen tumbled to a 7-month low against the dollar when BOJ Governor Kuroda said at Jackson Hole that BOJ monetary policy was "having its intended effect" and that global central banks must fight deflation by any and all means. Commodity prices are mixed. Oct crude oil (CLV14 +0.20%) is up +0.15%. Oct gasoline (RBV14 +0.20%) is up +0.14%. Dec gold (GCZ14 -0.02%) is down -0.13%. Sep copper (HGU14 +0.34%) is down -0.05%. Agriculture prices are mixed with Nov soybeans down -0.58% at a contract low on expectations for a bumper U.S. soybean harvest. The dollar index (DXY00 +0.21%) is up +0.18% at a fresh 11-1/2 month high amid speculation the Fed will raise interest rates before the ECB or the BOJ. EUR/USD (^EURUSD) is down -0.32% at an 11-1/2 month low after German Aug IFO business confidence fell more than expected to a 13-month low. USD/JPY (^USDJPY) is down -0.05% as it fell back from a 7-month high. The yen had slumped to a 7-month low after comments over the weekend at Jackson Hole, Wyoming from BOJ Governor Kuroda signaled the BOJ will maintain record stimulus. Sep T-note prices (ZNU14 +0.14%) are up +4.5 ticks on carry-over support from a rally in German bunds as the yield on Germany's 10-year bund tumbled to a record low 0.931%.

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