December E-mini S&Ps (ESZ15 +0.31%) are up +0.35% and European stocks are up +2.20% on speculation the ECB will expand monetary stimulus and offset the expectations of a Fed rate increase. ECB Executive Board member Praet said the ECB may consider adding to stimulus next month because there’s a risk of inflation expectations becoming de-anchored. That sent EUR/USD (^EURUSD) down to a 7-month low and bolstered the earnings prospects for European exporters. European stocks also received a boost after the German Nov ZEW survey of expectations of economic growth rose more than expected. U.S. stocks found support on a 3% gain in Wal-Mart and a 2% gain in Home Depot in pre-market trading after both companies reported better-than-expected Q3 earnings results. Asian stocks settled mostly higher: Japan +1.22%, Hong Kong +1.15%, China -0.06%, Taiwan +1.50%, Australia +2.29%, Singapore +0.04%, South Korea +1.00%, India +0.41%.

The dollar index (DXY00 +0.08%) is up +0.10% at a 7-month high. EUR/USD (^EURUSD) is down -0.26%% at a 7-month low after comments from ECB Executive Board member Praet bolstered the outlook for additional ECB stimulus. USD/JPY (^USDJPY) is up +0.11%.

Dec T-note prices (ZNZ15 -0.12%) are down -4.5 ticks.

ECB Executive Board member Praet said “It’s key for the central bank to keep inflation expectations anchored, especially in a period of slack in the economy, and we have some signals that these inflation expectations are still fragile. This is why the Governing Council will discuss whether there is a case for further action as a possible de-anchoring of inflation expectations together with a lot of slack is a dangerous cocktail.”

The German Nov ZEW survey expectations of economic growth rose +8.5 to 10.4, stronger than expectations of +4.1 to 6.0.


Key U.S. news today includes: (1) Oct CPI (expected +0.2% m/m and +0.1% y/y, Sep -0.2% m/m and unch y/y) and Oct CPI ex food & energy (expected +0.2% m/m and +1.9% y/y, Sep +0.2% m/m and +1.9% y/y), (2) Oct industrial production (expected +0.1% m/m, Sep -0.2% m/m) and Oct manufacturing production (expected +0.2%, Sep -0.1%), and (3) Nov NAHB housing market index (expected unch at 64, Oct +3 to 64).

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