OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.26%) this morning are up +0.24% at a new record nearest-futures high and European stocks are up +0.77% at a 1-1/2 week high on optimism in the global economic outlook after the German Nov IFO business climate unexpectedly rose to a record high. Strength in energy stocks is also propelling the overall market higher with Jan WTI crude oil (CLF18 +1.38%) up +1.22% at a new 2-1/3 year high. Crude oil prices rallied on a report that said OPEC and Russia have crafted the outline of a deal to extend their crude production cuts to the end of next year. Metal producers and mining stocks are higher as well with Dec COMEX copper (HGZ17 +0.91%) up +0.91% at a 2-1/2 week high on signs of tighter supplies amid lower production. Copper prices rallied on a fall in LME copper inventories by -5,475 MT to a 2-1/4 month low of 213,600 MT, along with strikes by copper miners in Chile and Peru which lowers global copper output. Asian stocks settled mostly higher: Japan +0.12%, Hong Kong +0.53%, China +0.06%, Taiwan unch, Australia -0.06%, Singapore +0.55%, South Korea +0.28%, India +0.27%. China’s Shanghai Composite recovered from a 2-3/4 month low and closed higher after energy stocks rallied on the jump in crude oil prices, and Japanese stocks found support on signs of strength in manufacturing activity after the Japan Nov Nikkei manufacturing PMI expanded at the fastest pace in 3-1/2 years.

The dollar index (DXY00 -0.20%) is down -0.12% at a 6-week low. EUR/USD (^EURUSD) is up +0.06% at a 6-week high after the German Nov IFO business climate unexpectedly rose to a record high, which is hawkish for ECB monetary policy. USD/JPY (^USDJPY) is up +0.25%.

Dec 10-year T-note prices (ZNZ17 -0.11%) are down -5.5 ticks on reduced safe-haven demand with the rally in equities.

The German Nov IFO business climate unexpectedly rose +0.7 to a record high of 117.5 (data from 1991), stronger than expectations of no change at 116.7. Nov IFO expectations rose +1.8 to a 7-year high of 111.0, stronger than expectations of -0.3 to 108.8. Nov IFO current assessment fell -0.4 to 124.4, weaker than expectations of +0.2 to 125.0.