Barchart Morning Call

BC - 2 hrs 24 mins ago

Overnight Developments

• March E-mini S&Ps this morning are little changed as the market remains nervous ahead of Q4 earnings season and the debt ceiling battle that will start in earnest in February. European stocks are up +0.49% this morning on the improvement in the Eurozone confidence indexes. Asian stocks today closed mostly lower on overhang from Monday's weak U.S. stock market session. Japan today closed down -0.86%, Hong Kong closed down -0.94%, and China closed down -0.42%. Commodity prices this morning are mildly higher by +0.16%. Feb crude oil is up +0.54%, Feb gasoline is up +0.94%, Feb gold is up +0.63%, March copper is up +0.12%, and agriculture prices are trading mostly lower. The dollar index is slightly lower by -0.10% this morning. EUR/USD is up +0.05% and USD/JPY is down -0.32%. March 10-year T-notes are up +2 ticks.
• The European Stability Mechanism (ESM) will sell up to 2 billion euros in 3-year bills later today in its first debt auction. The sale will be a test of investor interest in buying securities that provide bailout aid to Eurozone countries and that are backed by Eurozone sovereign commitments.
• The Eurozone Dec economic confidence index rose by 1.3 points to 87.0 from 85.7 in Nov, which was stronger than market expectations for a +0.6 point increase to 86.3. The other Eurozone confidence indexes showed some improvement and were mixed relative to market expectations. The Dec Eurozone business climate indicator improved to -1.12 from a revised -1.17 in Nov although it was weaker than market expectations of -1.09. The Dec Eurozone industrial confidence report improved to -14.4 from a revised -15.0 in Nov and was slightly stronger than market expectations of -14.5. The Eurozone Dec services confidences index improved to -9.8 from -11.9 in Nov and was stronger than market expectations of -11.5.
• German Nov exports fell by -3.4% m/m, which was weaker than market expectations of -0.5% m/m and was a disappointing sign for the German economic outlook. German Nov imports fell by -3.7% m/m versus expectations of +0.5% m/m. The German Nov trade balance widened to 17.0 bln euros from 15.8 bln euros in October.
• The German Nov factory orders report fell -1.8% m/m and -1.0% y/y, which was weaker than market expectations of -1.4% m/m and -0.4% m/m.
• The Eurozone Nov retail sales report of +0.1% m/m and -2.6% y/y was slightly weaker than market expectations of +0.3% m/m and -2.1% y./y, but was at least an improvement from Oct's revised report of -0.7% m/m and -3.2% y/y.
• The Eurozone Nov unemployment rate rose slightly by 0.1 point to a new record high of 11.8% from 11.7% in October.
• The chances are increasing for a cut in the Chinese reserve requirement ratio for banks in January, according to the official Xinhua News Agency, which cited "industry insiders."
  Market Comments
  • March E-mini S&Ps this morning are slightly lower by -0.25 points (-0.02%) as the market looks ahead to today's unofficial start of the Q4 earnings season with Alcoa's earnings report after the close. The S&P 500 index on Monday closed mildly lower on long liquidation pressure after last week's rally sparked by nervousness ahead of earnings season and the debt ceiling battle in February. Banks rallied on the decision by global banking regulators to delay liquidity ratio requirements. Closes: S&P 500 -0.31%, Dow Jones -0.38%, Nasdaq -0.01%.
  • March 10-year T-notes this morning are up 2 ticks. March 10-year T-note prices on Monday closed mildly higher on the mildly lower close in stocks and on a little short-covering. Closes: TYH3 +2, FVH3 +0.5.
  • The dollar index this morning is slightly lower by -0.08 points (-0.10%). EUR/USD is up +0.00006 (+0.05%). USD/JPY is down -0.28 (-0.32%). The dollar index on Monday closed mildly lower on some long liquidation pressure after last week's sharp rally. EUR/USD rallied despite the outside chance that the ECB at its meeting on Thursday may cut rates by 25 to jump-start the Eurozone economy. Closes: Dollar index -0.24 (-0.30%), EUR/USD +0.0048 (+0.37%), USD/JPY -0.36 (-0.41%).
  • Feb WTI crude oil prices this morning are up +0.50 (+0.54%) and Feb gasoline is up +0.0260 (+0.94%). Feb crude oil and gasoline prices on Monday closed mildly higher on continued supportive sentiment from last week's fiscal cliff deal and on last Friday's 11 million barrel plunge in U.S. crude oil inventories. Closes: CLG3 +0.10 (+0.11%), RBG3 +0.0131 (+0.47%).
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    Today's U.S. Earnings ReportsEarnings reports (ranked by market cap): MON-Monsanto (consensus $0.36), AA-Alcoa (0.06), IHS-IHS Inc (1.11), RMP-RMP Intl (0.42), GPN-Global Payments (0.87), AYI-Acuity Brands (0.83), APOL-Apollo Group (-0.90), LNN-Lindsay Corp (0.75).
    Global Financial Calendar

    Tuesday 1/8/13
    United States
    1300 ET	Treasury auction of $32 billion in 3-year T-notes.
    1500 ET	Nov consumer credit expected +$12.75 bln, Oct +$14.2 bln.
    1500 ET	Richmond Fed President Jeffrey Lacker speaks on the U.S. economic outlook at South Carolina Business & Industry Political Education Committee's 27th annual meeting.
    1630 ET	API weekly U.S. oil statistics.
    Germany
    0200 ET	German Nov trade balance expected 15.8 bln euros, Oct 15.8 bln euros. German Nov exports expected -0.3% m/m, Oct +0.2% m/m. German Nov imports expected +0.5% m/m, Oct +2.5% m/m. Nov current account expected 16.0 bln euros, Oct 13.6 bln euros.
    0600 ET	German Nov factory orders, Oct +3.9% m/m and -2.4% y/y.
    Euro-Zone
    0500 ET	Eurozone final Dec consumer confidence expected unrevised at -26.6.
    0500 ET	Eurozone Dec business climate indicator expected -1.09, Nov -1.19. Dec Eurozone economic confidence expected 86.3, Nov 85.7. Dec industrial confidence expected -14.5, Nov -15.1. Dec services confidence expected -11.5, Nov -11.9.
    0500 ET	Eurozone Nov retail sales expected +0.3% m/m and -2.1% y/y, Oct -1.2% m/m and -3.6% y/y.
    0500 ET	Eurozone Nov unemployment rate expected 11.8%, Oct 11.7%.
    0600 ET	German Nov factory orders expected -1.4% m/m and -0.3% y/y, Oct +3.9% m/m and -2.4% y/y.
    United Kingdom
    1901 ET	UK Dec BRC shop price index expected +1.7% y/y, Nov +1.5% y/y.

    
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