Morning Call For Thursday, August 10


Sep E-mini S&Ps (ESU17 -0.38%) this morning are down -0.42% and European stocks are down -0.60% as tensions between the U.S. and North Korea continue to weigh on global equity markets. South Korea and Japan both warned North Korea that it would face a strong response if it carried through with a threat to launch missiles toward the U.S. territory of Guam. The slide in global stock markets has boosted the safe-haven demand for precious metals with Dec COMEX gold (GCZ17 +0.57%) up +0.55% at a 1-3/4 month high. Asian stocks settled mostly lower: Japan -0.05%, Hong Kong -1.13%, China -0.42%, Taiwan -1.34%, Australia -0.08%, Singapore +0.16%, South Korea -0.37%, India -0.84%. The Chinese yuan rallied to a 23-month high against the dollar after the PBOC raised its daily reference rate for the yuan and as some investors are buying the yuan as a safe-haven currency due to the North Korean tensions.

The dollar index (DXY00 +0.16%) is up +0.14%. EUR/USD (^EURUSD) is down -0.31%. USD/JPY (^USDJPY) is down -0.30%.

Sep 10-year T-note prices (ZNU17 +0.01%) are up +1.5 ticks.

Japan Jul PPI rose +0.3% m/m and +2.6% y/y, stronger than expectations of +0.2% m/m and +2.3% y/y with the +2.6% y/y gain the largest year-on-year increase in 2-3/4 years.

UK Jun industrial production rose +0.5% m/m, stronger than expectations of +0.1% m/m and the largest increase in 5 months.

UK Jun manufacturing production was unch m/m, right on expectations.


Key U.S. news today includes: (1) weekly initial unemployment claims (expected -5.000 at 240,000, previous -5,000 to 240,000) and continuing claims (expected -8,000 to 1.960 million, previous +3,000 to 1.968 million), (2) Jul PPI final demand (expected +0.1% m/m and +2.2% y/y, Jun +0.1% m/m and +2.0% y/y) and Jul PPI ex food & energy (expected +0.2% m/m and +2.1% y/y, Jun +0.1% m/m and +1.9% y/y), (3) New York Fed President William Dudley (voter) holds an economic press briefing on regional wage inequality, (4) Treasury auctions $15 billion 30-year T-bonds, (5) Jul monthly budget statement expected -$54.0 billion, Jun -$90.2 billion, (6) USDA weekly Export Sales, (7) USDA Aug WASDE crop production.

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