Overnight Markets and News

Jun E-mini S&Ps (ESM18 -0.24%) this morning are down -0.26% at a 6-week low and European stocks are down -1.38% at a 13-1/4 month low as global stocks sell-off on heightened trade concerns. The trade conflict between the U.S. and China escalated after China unveiled tariffs on $3 billion of U.S. imports of pork, recycled aluminum, steel pipes, fruit and wine in retaliation for U.S. tariffs on some Chinese imports. The U.S. then declared a temporary exemption for the European Union (EU) and other countries on steel and aluminum tariffs, signaling out China as the main recipient of the tariffs. The U.S. will give the EU, Argentina, Australia, Brazil, Canada, Mexico and South Korea until May 1 to negotiated levies on steel and aluminum. Increased supplies along with demand concerns have hammered copper prices with May COMEX copper (HGK18 -0.76%) down -0.25% at a 3-1/4 month low. Weekly Shanghai copper inventories rose +10,441 MT to a 11-1/2 month high of 307,435 MT. Asian stocks settled sharply lower: Japan -4.51%, Hong Kong -2.45%, China -3.39%, Taiwan -1.66%, Australia -1.96%, Singapore -2.00%, South Korea -3.37%, India -1.24%. Escalation of the trade war between the U.S. and China undercuts the outlook for global economic growth and fueled a slump in Asian equity markets.

The dollar index (DXY00 -0.21%) is down -0.17%. EUR/USD (^EURUSD +0.30%) is up +0.25%. USD/JPY (^USDJPY -0.29%) is down -0.25% at a 16-1/2 month low as the slump in global equity markets boosts safe-haven demand for the yen.

Jun 10-year T-note prices (ZNM18 +0-020) are up +3.5 ticks at a 6-week high.

Japan Feb national CPI rose +1.5% y/y, right on expectations and the fastest pace of increase in 2-3/4 years. Feb national CPI ex fresh food & energy rose +0.5% y/y, right on expectations and the fastest pace of increase in 1-1/2 years.

U.S. Stock Preview

Key U.S. news today includes: (1) Atlanta Fed President Raphael Bostic (voter) speaks about the economic outlook to the Knoxville Economic Forum, (2) Feb durable goods orders (expected +1.6% and +0.5% ex transportation, Jan -3.7% and -0.3% ex transportation), (3) Feb new home sales (expected +5.2% to 624,000, Jan -7.8% to 593,000), (4) Minneapolis Fed President Neel Kashkari (non-voter) speaks in a moderated Q&A, (5) USDA Feb Cattle on Feed, (6) Boston Fed President Eric Rosengren (non-voter) speaks at the International Research Forum in Washington, D.C.