Morning Call For March 2, 2015

OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH15 +0.02%) this morning are up +0.05% and European stocks are down -0.25%. Stocks found support after China cut interest rates on Saturday for the second time in three months. Gains were limited as energy stocks declined after the price of crude oil fell. The yield on Portugal's 10-year bond fell to a record low 1.74% and Italy's 10-year yield dropped to a record low 1.294% before the start of the ECB's bond-buying program. Asian stocks closed mostly higher: Japan +0.15%, Hong Kong +0.26%, China +0.80%, Taiwan -0.22%, Australia +0.51%, Singapore +0.03%, South Korea +0.87%, India +0.33%. China's Shanghai Stock Index rose to a 1-month high and the Chinese yuan fell to a 2-1/3 year low against the dollar after China cut interest rates. The PBOC on Saturday cut the 1-year deposit and lending rates by -25 bp each to 2.50% and 5.35% respectively effective Mar 1. Japan's Nikkei Stock index climbed to a 14-3/4 year high as exporter stocks rallied after the yen fell to a 2-week low against the dollar, which boosts exporters' earnings prospects. Commodity prices are mixed. Apr crude oil (CLJ15 -1.81%) is down -1.73% and Apr gasoline (RBJ15-1.52%) is down -1.56%. Apr gold (GCJ15 +0.26%) is up +0.26% at a 1-1/2 week high. May copper (HGK15 -0.33%) is down -0.17%. Agriculture prices are mixed. The dollar index (DXY00 -0.21%) is down -0.16%. EUR/USD (^EURUSD) is up +0.26% after Eurozone Feb CPI rose less than expected. USD/JPY (^USDJPY) is up +0.13% at a 2-week high. Jun T-note prices (ZNM15 +0.01%) are down -2.5 ticks.

The China Feb manufacturing PMI unexpectedly rose +0.1 to 49.9, stronger than expectations of -0.1 to 49.7. The Feb non-manufacturing PMI climbed +0.2 to 53.9.

The China Feb HSBC flash manufacturing PMI was revised lower to 50.7 from the previously reported 51.1.

The Eurozone Feb CPI estimate fell -0.3% y/y, a slower pace of decline than expectations of -0.4% y/y. The Feb core CPI rose +0.6% y/y, right on expectations and matched Jan's gain as the slowest pace of increase since the data series began in 1997.

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