Morning Call For May 28, 2015

OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM15 -0.14%) this morning are down -0.13% and European stocks are down -0.56% after G-7 finance ministers meeting in Dresden, Germany said that Greece needs to get serious about striking a deal on rescue aid. German Finance Minister Schaeuble rebuffed Greece's claim that a deal is imminent when he said "negotiations between the ECB, European Commission, IMF and the Greek government still haven't come very far." Asian stocks closed mixed: Japan +0.39%, Hong Kong -2.23%, China -6.50%, Taiwan +0.20%, Australia -0.21%, Singapore -0.21%, South Korea -0.04%, India -0.21%. Japan's Nikkei Stock Index climbed to a fresh 15-year high as exporters rallied on a weak yen which tumbled to a 12-1/3 year low against the dollar. China's Shanghai Composite Stock Index plunged 6.5% after some Chinese brokerages increased their margin requirements. Another negative for Chinese stocks was the action by the PBOC to drain tens of billions of yuan from the financial system by selling repurchase agreements to targeted financial institutions, which signals the PBOC does not intend to cut interest rates further in the near-term.

Commodity prices are mixed. Jul crude oil (CLN15 -0.12%) is up +0.30% and Jul gasoline (RBN15 +0.69%) is up +0.85%. Metals prices are mixed. Jun gold (GCM15 +0.10%) is up +0.13 and Jul copper (HGN15 -0.02%) is down -0.02%. Agricultural prices are higher.

The dollar index (DXY00 +0.04%) is down -0.17%. EUR/USD (^EURUSD) is up +0.17%. USD/JPY (^USDJPY) is up +0.39% at a 12-1/3 year high.

Jun T-note prices (ZNM15 unch) are unchanged.

San Francisco Fed President Williams said he "expects the Fed will be raising rates later this year" and that he sees above trend growth for the rest of the year with full-year GDP growth probably about 2.0%. He added that he sees interest rates "moving up in 2015, '16 and '17 and coming close to long-run estimates, which are between 3.5% and 4.0%."

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