Morning Call For May 20, 2015

OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM15 +0.05%) this morning are little changed as the market awaits today's FOMC meeting minutes. The Euro Stoxx 50 index this morning is mildly lower by -0.20%. Asian stocks today closed mixed: Japan +0.85%, Hong Kong -0.39%, China +0.65%, Taiwan -0.32%, Australia-0.09%, Singapore -0.42%, South Korea +0.93%, India +0.69%, Turkey -1.07%.

The dollar index (DXY00 +0.30%) this morning is up +0.21%. EUR/USD is seeing continued weakness and is down -0.0046 (-0.41%) this morning on yesterday's news that the ECB will slightly expand QE in May-June to account for lower liquidity over the summer. USD/JPY is up +0.24 (+0.20%). June 10-year T-notes (ZNM15 +0.04%) are unchanged this morning. June bunds are up +0.26 points.

Commodity prices are unchanged on net this morning. July WTI crude oil is up +0.56 (+0.97%) on some short-covering after yesterday's plunge. July gasoline is up +0.0243 (+1.23%). July natural gas is up +0.027 (+0.90%).

Precious metals prices are trading slightly higher this morning on some short-covering after Tuesday's sharp sell-off. Jun gold this morning is up +2.0 (+0.17%) and July silver is up +0.064 (+0.37%). July copper is down -0.013 (-0.44%). Grain and softs prices are trading moderately lower this morning.

The Japan Q1 GDP report of +2.4% (q/q annualized) was stronger than market expectations of +1.6%, although Q4 was revised lower to +1.1% from +1.5%.

The Bank of England policy minutes were a bit hawkish as they said that slack in the UK economy will probably be eroded within a year, which signals that potential future inflation pressures may then require a rate hike. For now, the Monetary Policy Committee voted 9-0 to keep its base rate unchanged at 0.50%.

The ECB later today will likely raise the Greek Emergency Lending Assistance (ELA) facility from the current 80 billion euros, adding to last week's hike of 2.0 billion euros.

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