Overnight Markets and News

Jun E-mini S&Ps (ESM18 +0.06%) this morning are up +0.13% on optimism S&P 500 Q1 corporate earnings will continue to surprise to the upside. General Electric is up 3% in pre-market trading after it reported Q1 adjusted EPS of 16 cents, higher than expectations of 12 cents. Gains in the overall market were limited on increased trade tensions with China as the U.S. Treasury Department considers using an emergency law to curb Chinese investment in sensitive technologies. Under a 1977 low known as the International Emergency Economic Powers Act, President Trump could declare a national emergency in response to an “unusual and extraordinary threat,” which allows him to block transactions and seize assets, according to assistant secretary in the international affairs office, Heath Tarbert. European stocks are up +0.48% at a 2-1/2 month high due to strength in exporter stocks. Exporters are gaining on weakness in EUR/USD (^EURUSD -0.28%) which is down -0.32% at a 1-1/2 week low after German Mar PPI rose less than expected, which is dovish for ECB monetary policy ahead of next Thursday’s ECB meeting. Asian stocks settled mostly lower: Japan -0.13%, Hong Kong -0.94%, China -1.47%, Taiwan -1.75%, Australia -0.21%, Singapore -0.70%, South Korea -0.70%, India +0.11%. Weakness in Asian technology stocks undercut Asian bourses after Taiwan Semiconductor Manufacturing, Apple’s main chip supplier, dropped 6% after it forecast weaker-than-expected revenue this quarter on slowing demand for smartphones. The IMF earlier this week had said that global smartphone shipments declined for the first time in 2017.

The dollar index (DXY00 +0.18%) is up +0.23% at a 1-1/2 week high. EUR/USD (^EURUSD -0.28%) is down -0.32% at a 1-1/2 week low. USD/JPY (^USDJPY +0.21%) is up +0.21%.

Jun 10-year T-note prices (ZNM18 +0-005) are little changed, up +0.5 of a tick.

Cleveland Fed President Mester said she doesn’t expect inflation to pick up sharply even as unemployment is likely to fall below 4% this year and remain there through 2019. This “argues against a steep path” for interest rates and that “gradual rate hikes will be appropriate this year and next year.”