Morning Call For Wednesday, June 13

Overnight Markets and News

Sep E-mini S&Ps (ESU18 +0.19%) this morning are up +0.20% at a new 3-month high and European stocks are up +0.22% a strength in technology stocks lifts the overall market. The Fed is expected to raise interest rates by 25 bp later today, so the focus of the market will be on the comments from Fed Chair Powell after the meeting for the future course of Fed policy. The upside in European stocks was limited on economic concerns after Eurozone Apr industrial production fell -0.9% m/m, the biggest decline in 10-months. Asian stocks settled mixed: Japan +0.38%, Hong Kong -1.22%, China -0.97%, Taiwan +0.26%, Australia -0.51%, Singapore -1.11%, South Korea closed for holiday, India +0.13%. Stock prices in China and Hong Kong moved lower, led by a 42% plunge in ZTE Corp, after the company agreed to a $1 billion fine and major revamp on management. Japanese stocks were led higher by strength in exporters after USD/JPY climbed to a 3-week high, which boosts the earnings prospects of exporters with the weaker yen.

The dollar index (DXY00 +0.03%) is down -0.02%. EUR/USD (^EURUSD +0.11%) is up +0.12%. USD/JPY (^USDJPY +0.15%) is up +0.14% at a 3-week high.

Sep 10-year T-note prices (ZNU18 +0-010) are unchanged.

Eurozone Apr industrial production fell -0.9% m/m, weaker than expectations of -0.7% m/m and the biggest decline in 10-months.

UK May CPI rose +0.4% m/m and +2.4% y/y, right on expectations. May core CPI rose +2.1% y/y, right on expectations.

The UK Apr house price index rose +3.9% y/y, the smallest year-on-year increase in 13-months.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +4.1% to 370.8 with the purchase sub-index +4.2% to 252.8 and the refi sub-index up +3.8% to 1007.3), (2) May PPI final demand (expected +0.3% m/m and +2.8% y/y, Apr +0.1% m/m and +2.6% y/y) and May PPI ex food & energy (expected +0.2% m/m and +2.3% y/y, Apr +0.2% m/m and +2.3% y/y), (3) EIA weekly Petroleum Status Report, (4) FOMC announces interest rate decision (expected +25 bp increase in the fed funds rate target to 1.75% to 2.00% from 1.50% to 1.75%), (5) Fed Chair Jerome Powell holds press conference following FOMC meeting.

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