Barchart Morning Call 1/4

Barchart Morning Call

BC - Fri Jan 04, 7:00AM CST

Overnight Developments

• March E-mini S&Ps are unchanged ahead of this morning's U.S. Dec unemployment report (payrolls expected +150,000). European stocks are mildly lower by -0.34%. Asian stocks are narrowly mixed except for Japan's Nikkei index, which rallied +2.82% today. Commodity prices are sharply lower by -0.96% on a continued negative reaction to yesterday's FOMC minutes that showed that half of FOMC members anticipate ending QE3 by mid-year. Feb crude oil is down -1.32%, Feb gasoline is down -1.59%, Feb gold is down -2.60%, March copper is down -0.96%, and agriculture prices are trading mostly lower. The dollar index is up +0.57% as the market continues to react to the FOMC's tighter stance on QE3. EUR/USD is down -0.28% and USD/JPY is up sharply by +1.16%. March 10-year T-note prices are sharply lower by 12 ticks.
• The next round of talks with Iran on its nuclear program will be held "very soon," according to the spokesman for EU foreign policy chief Catherine Ashton, who is the lead negotiator for the talks.
• China's Dec HSBC services PMI fell by 0.4 points to 51.7 from 52.1 in November.
• The German Nov retail sales report of +1.2% m/m and -0.9% y/y was substantially stronger than market expectations of +0.8% m/m and -1.6% y/y. Oct was revised stronger to -1.3% m/m and +0.2% y/y from -2.8% m/m and -0.8% y/y.
• The German final-Dec services PMI was revised slightly lower by 0.1 point to 52.0 from 52.1. The final-Dec Eurozone services PMI was revised slightly lower to 47.2 from 47.3.
• the UK Dec services PMI fell by 1.3 points to 48.9 from 50.2 and was weaker than market expectations for a report of unchanged at 50.2.
• The Eurozone Dec CPI was unchanged from Nov at +2.2% y/y and was slightly above market expectations of +2.1% y/y.
  Market Comments
  • March E-mini S&Ps this morning are unchanged as the market treads water ahead of today's Dec unemployment report. The S&P 500 index on Thursday overcame early weakness and moved up to a 2-3/4 month high on the stronger-than-expected Dec ADP employment change, but then fell back and closed lower after the FOMC Dec 11-12 meeting minutes showed that Fed members will probably end quantitative easing sometime this year. Closes: S&P 500 -0.21%, Dow Jones -0.15%, Nasdaq -0.52%.
  • March 10-year T-notes this morning are down by another 12 ticks. March 10-year T-note prices on Thursday tumbled to a 2-1/4 month low and closed lower on speculation that Friday's Dec non-farm payrolls may be stronger than expected when the Dec ADP employment change rose by +215,000, the most in 10 months, and after the FOMC Dec 11-12 meeting minutes suggested the Fed may end their QE3 bond buying sometime this year. Closes: TYH3 -16.5, FVH3 -7.75. The 10-year T-note yield shot up to a 7-3/4 month high of 1.912%.
  • The dollar index this morning is up +0.46 points (+0.57%) on hopes for a strong U.S. payroll report today and on yesterday's indication of a tighter-than-expected FOMC stance towards QE3. EUR/USD is down -0.0036 (-0.28%) and USD/JPY is up 1.01 (+1.16%). The dollar index on Thursday rallied to a 3-week high and closed higher on the improved foreign investment prospects for the U.S. after the fiscal cliff resolution along with the FOMC Dec 11-12 meeting minutes that suggest the Fed may end their QE3 measures sometime this year, which would be dollar supportive. USD/JPY rallied to a fresh 2-1/2 year high on speculation Japanese Prime Minister Abe will pursue measures to weaken the yen. Closes: Dollar index +0.537 (+0.67%), EUR/USD -0.00107 (-0.08%), USD/JPY +0.203 (+0.23%).
  • Feb WTI crude oil prices this morning are down -$1.23 (-1.32%) and Feb gasoline is down -0.0446 (-1.59%). Feb crude oil and gasoline prices on Thursday closed mixed as crude oil was undercut by dollar strength, although gasoline closed higher on the prospects for increased consumption after Dec ADP employment rose by 215,000, the most in 10 months. The market consensus for Friday's weekly DOE report is for a -500,000 bbl decline in crude oil inventories, a +2 million barrel increase in gasoline inventories, a +1 million rise in distillate inventories, and a +0.4 point increase in the refinery utilization rate to 90.7%. Closes: CLG3 -0.15 (-0.16%), RBG3 +0.0026 (+0.09%).
  • For the complete subscription version of this daily report (plus a 13-page big-picture weekly report), along with the earliest possible delivery in the morning, please visit http://www.barchart.com/register/crbfms_usmc.php
    Today's U.S. Earnings Reports Earnings reports (ranked by market cap): MOS-Mosaic (consensus $0.88).
    Global Financial Calendar
    

    Friday 1/4/13
    United States
    0830 ET	Dec nonfarm payrolls expected +150,000, Nov +146,000. Dec private payrolls expected +153,000, Nov +147,000. Dec mfg payrolls expected +4,000, Nov -7,000. Dec unemployment rate expected unch at 7.7%, Nov was -0.2 to 7.7%.
    0830 ET	Dec avg hourly earnings expected +0.2% m/m and +1.7% y/y, Nov +0.2% m/m and +1.7% y/y. Dec avg weekly hours expected unch at 34.4 hours, Nov 34.4 hours.
    0830 ET	USDA weekly Export Sales.
    1000 ET	Nov factory orders expected +0.4% m/m, Oct +0.8% m/m.
    1000 ET	Dec ISM non-manufacturing index expected -0.7 to 54.0, Nov +0.5 to 54.7.
    1315 ET	Philadelphia Fed President Charles Plosser speaks on panel on "Real Business Cycle After Three Decades: Past, Present and Future" at the American Economic Association's conference in San Diego.
    1330 ET	Richmond Fed President Jeffrey Lacker delivers speech on the economic outlook at Maryland Bankers Association in Baltimore.
    1530 ET	Fed Vice Chairman Janet Yellen speaks on "Financial System Interconnectedness and Systemic Risk: Lessons from the Crisis and Policy Implications" at American Economic Association conference in San Diego.
    1730 ET	St. Louis Fed President James Bullard speaks at NABE panel "Federal Reserve Independence in the Aftermath of the Financial Crisis: Should We Be Worried?"
    Germany
    0200 ET	German Nov retail sales expected +0.8% m/m and -1.6% y/y, Oct -1.3% m/m and -0.8% y/y.
    0355 ET	German final Dec services PMI expected unrevised at 52.1.
    Euro-Zone
    0400 ET	Eurozone final Dec services PMI expected unrevised at 47.8. Final Dec PMI composite expected unrevised at 47.3.
    0500 ET	Eurozone Dec CPI expected +2.1% y/y, Nov +2.2% y/y.
    United Kingdom
    0430 ET	UK Dec services PMI expected unch at 50.2, Nov 50.2.
    0430 ET	UK Nov net consumer credit expected -100,000 bln pounds, Oct -500,000 pounds. Nov net lending secured on dwellings expected 500,000 pounds, Oct 200,000 pounds.
    0430 ET	UK Nov mortgage approvals expected 54,000, Oct 53,000.
    0430 ET	UK Nov M4, Oct +0.2% m/m and -3.2% y/y.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.