Barchart Moring Call 8/14

Barchart Morning Call

BC - 2 hrs 16 mins ago

Overnight Developments

• Sep E-mini S&Ps this morning are up +0.18% at a 4-1/4 month high and the Euro Stoxx 50 is up +0.53% after Germany's economy in Q2 expanded at a faster pace than expected. Commodity prices are stronger with Sep crude up +0.30% and Sep copper up +0.39%, while the grain markets are higher with Dec corn up +0.92% and Nov soybeans up +0.66%. The dollar index this morning is lower with EUR/USD up +0.14% and Sep T-notes are down -1.5 ticks.
• Asian stocks today closed higher after minutes of last month's BOJ policy meeting showed policy makers weren't ruling out any options to boost growth: Japan +0.50%, Hong Kong +1.05%, China +0.22%, Taiwan +0.58%, Australia +0.21%, Singapore +0.75%, South Korea +1.35%, India +0.54%.
• German Q2 GDP expanded at a +0.3% q/q and +1.0% y/y pace, stronger than expectations of +0.2% q/q and +0.9% y/y.
• Euro-Zone Q2 GDP fell -0.2% q/q and -0.4% y/y, right on expectations.
• German Aug ZEW economic sentiment unexpectedly fell for a fourth month as it declined -5.9 to -25.5, its weakest pace in 8 months and worse than expectations of a +0.3 increase to -19.3, although the Aug ZEW current situation fell -2.9 to 18.2, a 2-year low but stronger than expectations of -4.1 to 17.5.
• U.K. July CPI rose +0.1 m/m and +2.6% y/y, stronger than expectations of -0.1% m/m and +2.3% y/y, while July core CPI climbed +2.3% y/y, also stronger than expectations of +2.1% y/y.
• Greece sold 4.06 billion euros of 3-month bills, more than its maximum target of 3.125 billion euros.
• Monthly data from the Bank of Spain showed Spanish banks' ECB borrowings surged to a record 375.5 billion euros in July, up +11.4% from June.
• Minutes of the July 11-12 BOJ policy meeting showed some BOJ board members said the central bank should not dismiss any policy options in combating risks to the economy from the European sovereign debt crisis, and that the bank has been "pursuing powerful monetary easing" and would "continue to conduct monetary policy in an appropriate manner."
  Market Comments
  • Sep E-mini S&Ps this morning are up +2.50 points (+0.18%) at a fresh 4-1/4 month high and the Euro Stoxx 50 is up +0.53%. The stock market on Monday traded mostly lower and settled mixed on concerns over the global economy after Japan's Q2 GDP was weaker than expected: S&P 500 -0.13%, Dow Jones -0.29%, Nasdaq 100 +0.21%. Stock losses were limited on speculation global central banks will increase their stimulus measures to support economic growth.
  • Sep 10-year T-notes this morning are down -1.5 ticks. T-note prices on Monday traded slightly lower as a recovery in stocks limited the safe-haven demand for Treasuries: TYU2 -3.5, FVU2 -0.5. Another factor that reduced safe-haven demand for T-notes was Italy's action to sell all the debt it planned at an auction of Treasury bills, which eased European debt concerns.
  • The dollar index this morning is down -0.10%. EUR/USD is up +0.14% and USD/JPY is +0.26%. The yen weakened overnight after minutes of the BOJ's July meeting signaled policy makers are considering ways to expand stimulus. The dollar index on Monday settled lower as the euro recovered its losses and settled little changed after Italy sold the maximum amount of debt offered for sale, which reduced European debt concerns : Dollar index -0.118 (-0.14%), EUR/USD unchanged, USD/JPY unchanged. Dollar losses were limited on an increase in safe-haven demand as stocks fell early along with comments from ECB Council member Coene who said European sovereign bond yields have been rising because financial markets don't trust Spanish and Italian authorities to take the measures necessary to repair their economies.
  • Sep WTI crude oil prices this morning are up 28 cents a barrel (+0.30%) and Sep gasoline is up 0.0069 of a cent a gallon (+0.23%). Crude oil and gasoline prices on Monday closed slightly lower as weaker-than-expected Japan Q2 GDP bolstered concern that global economic growth and energy demand may slow: CLU2 -0.14 (-0.15%), RBU2 -0.0132 (00.44%). Sep gasoline had posted a 3-1/2 month nearest-futures high before erasing its gains and closing lower on supply concerns due to diminished fuel production at Chevron's 240,000 bpd refinery in Richmond, California along with reduced output in the North Sea due to ongoing seasonal maintenance. Another supportive factor for energy prices was the report from the Haaretz daily that Israeli leaders are leaning toward a military strike on Iran over its nuclear program before U.S. elections in November.
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    Today's U.S. Earnings Reports Earnings reports (ranked by market cap): HD-Home Depot (Consensus $0.97), TJX-TJX Cos. (0.55), EL-Estee Lauder (0.16), KORS-Michael Kors Holdings Ltd. (0.20), DKS-Dick's Sporting Goods (0.64), VAL-Valspar (0.96), TW-Towers Watson & Co. (1.24), JKHY-Jack Henry & Associates (0.46), FLO-Flowers Foods (0.22), JDSU-JDS Uniphase (0.12), NSM-Nationstar Mortgage Holdings (0.34), MYGN-Myriad Genetics (0.34), SKS-Saks (-0.09), NGL-NGL Energy Partners LP (-0.41), BOBE-Bob Evans Farms (0.60).
    Global Financial Calendar
    

    Tuesday 8/14/12
    United States
    0745 ET	ICSC (Int'l Council of Shopping Centers) weekly retailer sales.
    0830 ET	July PPI expected +0.2% m/m and +0.5% y/y, June +0.1% m/m and +0.7% y/y. July core PPI expected +0.2% m/m and +2.3% y/y, June +0.2% m/m and +2.6% y/y.
    0830 ET	July retail sales expected +0.3% m/m, June -0.5% m/m. July retail sales ex-autos expected +0.3% m/m, June was -0.4% m/m. July retail sales ex-autos and gas, June -0.2% m/m.
    0855 ET	Redbook weekly retailer sales.
    1000 ET	June business inventories expected +0.2% m/m, May +0.3% m/m.
    1130 ET	Weekly 4-week T-bill auction.
    1630 ET	API weekly U.S. oil statistics.
    Germany
    0200 ET	German Q2 GDP expected +0.2% q/q and +0.9% y/y, Q1 was +0.5% q/q and +1.7% y/y.
    0500 ET	German Aug ZEW current situation index expected -4.1 to 17.5, July 21.1. Aug ZEW economic sentiment index expected +0.3 to -19.3, July -19.6.
    United Kingdom
    0430 ET	UK June ONS house price expected +1.5% y/y, May +2.3% y/y.
    0430 ET	UK July CPI expected -0.1% m/m and +2.3% y/y, June -0.4% m/m and +2.4% y/y. UK July core CPI expected +2.1% y/y, June +2.1% y/y.
    0430 ET	UK July RPI expected -0.2% m/m and +2.8% y/y, June -0.2% m/m and +2.8% y/y. July RPI ex-mortgage interest payments expected +2.9% y/y, June +2.8% y/y.
    Euro-Zone
    0500 ET	Eurozone Q2 GDP expected -0.2% q/q and -0.4% y/y, Q1 unch q/q and -0.1% y/y.
    0500 ET	Eurozone June industrial production expected -0.7% m/m and -2.1% y/y, May +0.9% m/m and -2.6% y/y.

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