Morning Call For Tuesday, Dec. 27

OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH17 +0.06%) are up +0.06% and European stocks are up +0.10% in thin holiday trade. Markets in the UK, Australia and Hong Kong are closed today for holiday. A +0.30% rally in Feb WTI crude (CLG17 +0.26%) is positive for energy producing stocks, although a -0.22% decline in the price of Mar COMEX copper (HGH17 -0.22%) to a 1-1/4 month low is undercutting mining stocks and raw-material producers. Asian stocks settled mixed: Japan +0.03%, Hong Kong and Australia closed for holiday, China -0.25%, Taiwan -0.01%, Singapore +0.51%, South Korea +0.23%, India +1.57%. Economic concerns undercut Japanese stocks after Japan Nov household spending unexpectedly declined -1.5% y/y. Also, deflation concerns remain after Japan's Nov national CPI fell -0.4% y/y, weaker than expectations of -0.3% y/y and the ninth straight month prices have fallen.

The dollar index (DXY00 +0.17%) is up +0.07%. EUR/USD (^EURUSD) is down -0.08%. USD/JPY (^USDJPY) is up +0.19%.

Mar 10-year T-note prices (ZNH17 -0.09%) are down -3.5 ticks.

ECB Governing Council Member Knot said the ECB's assets purchase program prevents countries from taking structural reform measures and the program will have to come to an end at some point.

Japan Nov national CPI rose +0.5% y/y, right on expectations. Nov national CPI ex-fresh food fell -0.4% y/y, weaker than expectations of -0.3% y/y. Nov national CPI ex food & energy rose +0.1% y/y, right on expectations.

Japan Nov overall household spending unexpectedly fell -1.5%, weaker than expectations of +0.1% and the ninth consecutive month that spending has declined.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Oct S&P CoreLogic composite-20 home prices (expected +0.5% m/m and +5.0% y/y, Sep +0.37% m/m and +5.08% y/y), (2) Dec Richmond Fed manufacturing survey (expected +1 to 5, Nov +8 to 4), (3) Conference Board Dec U.S. consumer confidence index (expected +1.4 to 108.5, Nov +6.3 to 107.1), (4) Treasury auctions $26 billion of 2-year T-notes, (5) USDA weekly grain export inspections.

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