Morning Call For Thursday, Jan. 25

OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 +0.30%) this morning are up +0.21% as commodity producers and energy stocks rally with the dollar index sliding further to a new 3-year low. Metals prices all rallied with Feb COMEX gold (GCG18 +0.14%) up +0.16% and Mar silver (SIH18 +0.23%) up +0.18%, both at 4-1/2 month highs, and Mar COMEX copper (HGH18 +0.22%) is up +0.15% at a 1-week high. Mar WTI crude oil (CLH18 +1.01%) is up +0.72% at a new 3-year high on a weaker dollar along with carry-over support from Wednesday's EIA data that showed U.S. crude inventories fell for a record tenth consecutive week to a 2-3/4 year low. European stocks are up +0.30% ahead of the conclusion of today's ECB meeting and press conference from ECB President Draghi. Confidence in the European economic outlook is providing a lift to equities after the German Jan IFO business climate and the German Feb GfK consumer confidence both rose to record highs. Asian stocks settled mostly lower: Japan -1.13%, Hong Kong -0.92%, China -0.31%, Taiwan +0.12%, Australia -0.08%, Singapore -1.01%, South Korea +0.96%, India -0.31%. Chinese stocks retreated amid continuing protectionist rhetoric from the Trump administration on trade, while Japanese stocks fell back as the Nikkei Stock Index slid to a 1-1/2 week low after a fall in USD/JPY to a 4-1/2 month low undercut exporter stocks.

The dollar index (DXY00 -0.10%) is down -0.03% at a new 3-year low. EUR/USD (^EURUSD) is down -0.07%h. USD/JPY (^USDJPY) is down -0.18% at a 4-1/2 month low.

Mar 10-year T-note prices (ZNH18 +0.13%) are up +4 ticks.

The German Jan IFO business climate unexpectedly rose +0.4 to 117.6, stronger than expectations of -0.2 to 117.0 and matched the Nov reading as the highest since the data series began in 1991.

The German Feb GfK consumer confidence rose +0.2 to a record high of 11.0 (data from 2006), stronger than expectations of no change at 10.8.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +15,000 to 235,000, previous -41,000 to 220,000) and continuing claims (expected -27,000 to 1.925 million, previous +76,000 to 1.952 million), (2) Dec new home sales (expected -7.9% to 675,000, Nov +17.5% to 733,000), (3) Dec leading indicators (expected +0.5%, Nov +0.4%), (4) Jan Kansas City Fed manufacturing activity (expected unch at 14, Dec -2 to 14), (5) Treasury auctions $28 billion 7-year T-notes.

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