Morning Call For March 10, 2015

OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH15 -0.87%) this morning are down -0.59% at a 1-3/4 month low and European stocks are down -0.78% after Dallas Fed President Fisher said that the Fed should raise interest rates before the economy reaches full employment to avoid triggering a recession. The yield on the German 10-year bund fell to a record low of 0.279% as the ECB bought Eurozone government bonds in the second day of its quantitative easing program. Asian stocks closed mostly lower: Japan -0.67%, Hong Kong -0.94%, China -0.48%, Taiwan -0.28%, Australia +0.05%, Singapore -0.19%, South Korea -0.40%, India -0.47%. Asian stocks fell back on China deflation concerns after China's producer prices extended a record stretch of declines to 36 months after Chine Feb PPI fell -4.8% y/y, the biggest decline in over 5 years. Commodity prices are mostly lower on a rally in the dollar. Apr crude oil (CLJ15 -0.98%) is down -0.48%. Apr gasoline (RBJ15 -1.07%) is down -0.94%. Apr gold (GCJ15 -0.37%) is down -0.45% at a 3-month low as the dollar strengthens. May copper (HGK15 -2.38%) is down -1.85%. Agriculture prices are lower ahead of the USDA's Mar WASDE crop production report. The dollar index (DXY00 +0.82%) is up +0.71% at an 11-1/2 year high. EUR/USD (^EURUSD) is down -0.84% at an 11-3/4 year low. USD/JPY (^USDJPY) is up +0.41% at a 7-1/2 year high. Jun T-note prices (ZNM15 +0.21%) are up +5 ticks.

Dallas Fed President Fisher said the Fed should raise interest rates before the economy reaches full employment as policy makers are better off tightening monetary policy earlier and more gradually than later and more quickly. He added that "every time the Fed tightened policy after achieving full employment, it has driven the economy into recession."

China Feb CPI rose +1.4% y/y, stronger than expectations of +1.0% y/y. Feb PPI fell -4.8% y/y, weaker than expectations of -4.3% y/y and the fastest pace of decline in 5-1/3 years.

Japan Feb machine tool orders jumped +28.9% y/y, the seventeenth consecutive month that machine tool orders have increased.

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