Barchart Morning Call 1/15

Barchart Morning Call

BC - Tue Jan 15, 7:00AM CST

Overnight Developments

• March E-mini S&Ps this morning are trading mildly lower on debt ceiling concerns and a -0.48% sell-off in European stocks on a weak German GDP report. Asian stocks today closed mixed. Japan closed +0.72%, Hong Kong closed -0.14%, and China closed +0.70%. Commodity prices are mildly higher by +0.13%. Feb crude oil is down -0.10%, Feb gasoline is down -0.29%, Feb gold is up +0.55%, March copper is down -0.39%, grain prices are up about +0.6% on average, and livestock and softs are mostly lower. The dollar index is up +0.15%, EUR/USD is down -0.43%, and USD/JPY is sharply lower by -1.15%. March 10-year T-note prices are up 8.5 ticks.
• Japanese preliminary Dec machine tool orders weakened to -27.5% y/y from -21.3% in Nov.
• German Q4 GDP fell -0.5% q/q (-2.0% q/q annualized), according to a preliminary estimate from the German Federal Statistics Office. Overall German GDP growth in 2012 slid to +0.7% from +3.0% in 2011. Notably, German produced a budget surplus of 0.1% of GDP in 2012, an improvement from a 0.8% deficit in 2011.
• The UK Dec CPI rose +0.5% m/m and +2.7% y/y, which was in line with market expectations. The Dec core CPI eased to +2.4% y/y from +2.6% in Nov and was weaker than market expectations of +2.6%. UK inflation remains above the BOE's limit of 2% and continues to discourage the BOE from further easing at this point.
• The Eurozone Nov adjusted trade balance rose to 11.0 bln euros from a revised 7.4 bln euros in Oct and was larger than market expectations of 8.0 bln euros. The report was supportive for EUR/USD.
• USD/JPY fell after Japan's economy minister Akira Amari said that Japan faces risks from an excessive decline in the yen. The yen has plunged by 13% in the past four months against a trade-weighted basket of currencies.
• Spain today successfully sold 5.75 billion euros of bills, more than the target of 5.5 billion euros.
  Market Comments
  • March E-mini S&Ps this morning are down -4.25 points on the -0.48% sell-off in European stocks and on increased worries about the debt ceiling battle. The S&P 500 index on Monday closed mildly lower as concern rose about the debt ceiling battle after President Obama at a surprise press conference continued to indicate that he does not plan to negotiate with House Republicans over a debt ceiling hike, highlighting the impending battle that could easily result in at least a government shut-down. The Nasdaq index fell -0.46% on a sharp 3.6% sell-off in Apple on a report that Apple is curbing iPhone production due to weak demand. Closes: S&P 500 -0.09%, Dow Jones +0.14%, Nasdaq -0.46%.
  • March 10-year T-notes this morning are up 8.5 ticks on the lower trade in stocks and debt ceiling worries. March 10-year T-note prices on Monday closed mildly higher on some increased safe-haven demand with the impending debt ceiling battle.
  • The dollar index this morning is up +0.12 points (+0.15%) on increased safe-haven demand. EUR/USD is down -0.0057 (-0.43%). USD/JPY is sharply lower by -1.03 (-1.15%) as the Japanese government seems to be getting nervous about the extent of the yen's plunge in recent weeks. The dollar index on Monday closed slightly lower on continued technical weakness with the new 2-week low. EUR/USD closed higher despite a weaker-than-expected Eurozone industrial production report. Closes: Dollar index -0.08 (-0.09%), EUR/USD +0.0039 (+0.29%),USD/JPY +0.30 (+0.34%).
  • Feb WTI crude oil prices this morning are down -0.09 (-0.10%) and Feb gasoline is down -0.0079 (-0.29%). Feb crude oil and gasoline prices on Monday closed higher on the slightly lower close in the dollar index and on carry-over support from the reopening of the Seaway pipeline last Friday with an expanded capacity of 400,000 bpd (vs 150,000 bpd), which will help dampen inventories at the Cushing hub where WTI crude oil futures are priced. Crude oil and gasoline prices were able to rally even though increases are expected for tomorrow's DOE inventory report for crude oil, gasoline and distillates. Closes: CLG3 +0.58 (+0.62%), RBG3 +0.0146 (+0.53%).
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    Today's U.S. Earnings ReportsEarnings reports (ranked by market cap): FRX-Forest Labs (consensus -$0.08), LLTC-Linear Tech (0.44), LEN-Lennar (0.44), CBSH-Commerce Bankshares (0.72), FULT-Fulton Financial (0.20), IRWD-Ironwood Pharmaceuticals (-0.48), PNFP-Pinnacle Financial (0.33), IBKR-Interactive Broker (0.21).
    Global Financial Calendar

    Tuesday 1/15/13
    United States
    0800 ET	Boston Fed President Eric Rosengren speaks on the economic outlook at the Greater Providence Chamber.
    0830 ET	Jan Empire manufacturing index expected +8.1 to 0.0, Dec -2.9 to -8.1.
    0830 ET	Dec retail sales expected +0.2% m/m, Nov +0.3% m/m. Dec retail sales ex-autos expected +0.2% m/m, Nov unch m/m. Dec retail sales ex-auto and gas, Nov +0.7% m/m.
    0830 ET	Dec PPI expected -0.1% m/m and +1.4% y/y, Nov -0.8% m/m and +1.5% y/y. Dec core PPI expected +0.2% m/m and +2.1% y/y, Nov +0.1% m/m and +2.2% y/y.
    1000 ET	Nov business inventories expected +0.3% m/m, Oct +0.4% m/m.
    1230 ET	Philadelphia Fed President Charles Plosser speaks on the U.S. economic outlook at Simon School of Business in Rochester, NY.
    n/a	World Bank released Global Economic Prospects report.
    1630 ET	API weekly U.S. oil statistics.
    Germany
    0200 ET	German final-Dec CPI expected unrevised at +0.9% m/m and +2.1% y/y. Final-Dec EU-harmonized, Nov +1.0% m/m and +2.1% y/y.
    United Kingdom
    0430 ET	UK Dec PPI input nsa expected unchanged m/m and +0.4% y/y, Nov +0.1% m/m and -0.3% y/y. Dec PPI output nsa expected unchanged m/m and +2.4% y/y, Nov -0.2% m/m and +2.2% y/y. Dec PPI output core nsa expected unchanged m/m and +1.5% y/y, Nov unch m/m and +1.4% y/y.
    0430 ET	UK Dec CPI expected +0.5% m/m and +2.7% y/y, Nov +0.2% m/m and +2.7% y/y. Dec core CPI expected +2.6% y/y, Nov +2.6% y/y.
    0430 ET	UK Dec RPI expected +0.4% m/m and +3.0% y/y, Nov unch m/m and +3.0% y/y. Dec RPI ex-mortgage interest payments expected +3.0% y/y, Nov +2.9% y/y.
    Euro-Zone
    0500 ET	Eurozone Nov trade balance sa expected 8.0 bln euros, Oct 7.9 bln euros. Nov trade balance expected 10 bln euros, Oct 10.2 bln euros.
    Japan
    1850 ET	Japan Dec domestic CGPI expected +0.2% m/m and -0.7% y/y, Nov unch m/m and -0.9% y/y.
    1850 ET	Japan Nov machine orders expected +0.3% m/m and -7.3% y/y, Oct +2.6% m/m and +1.2% y/y.

    
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