Overnight Markets and News
Jun E-mini S&Ps (ESM18 +0.07%) this morning are up +0.07% as T-note yields stabilize. Concern the Fed would speed up the pace of its interest rate increases sent stocks prices reeling Tuesday and pushed the 10-year T-note yield up to a 6-3/4 year high of 3.09%. European stocks are down -0.13% and EUR/USD tumbled to a 4-3/4 month low on increased political risks in Italy after the Five Star Party discussed a potential government debt write-down of 250 billion euros from the ECB. Energy stocks are lower with Jun WTI crude oil (CLM18 -0.15%) down -0.13% after API data late Tuesday showed U.S. crude supplies rose 4.85 million bbl last week. Asian stocks settled mostly lower: Japan -0.44%, Hong Kong -0.13%, China -0.71%, Taiwan +0.21%, Australia +0.15%, Singapore -0.20%, South Korea +0.33%, India -0.44%. The rise in the 10-year T-note yield to a 6-3/4 year high undercut Asian stocks as did Japanese growth concerns after Japan Q1 GDP slid -0.6% (q/q annualized), the steepest pace of contraction in over 2-years.
The dollar index (DXY00 +0.29%) is up +0.30% at a 4-3/4 month high. EUR/USD (^EURUSD -0.45%) is down -0.39% at a 4-3/4 month low. USD/JPY (^USDJPY -0.17%) is down -0.19%.
Jun 10-year T-note prices (ZNM18 +0-030) are up +4 ticks.
San Francisco Fed President Williams said he’s “very positive” about the economic outlook both in the U.S. and abroad and that three to four interest rate increases this year are appropriate. He added that “with a new normal for interest rates of around 2.5%, interest rates ae likely to remain low relative to historical experience.”
China Apr new home prices rose +0.57% m/m, the largest increase in 10 months.
Japan Q1 GDP fell -0.6% (q/q annualized), weaker than expectations of -0.1% (q/q annualized) and the steepest pace of contraction in over 2-years. Q1 GDP deflator rose +0.5% y/y, stronger than expectations of +0.3% y/y and the biggest increase in 2-years. Q1 GDP private consumption was unch q/q, right on expectations. Q1 GDP business spending unexpectedly fell -0.1% q/q, weaker than expectations of +0.4% q/q.