OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 -0.24%) this morning are down -0.15% on long liquidation spurred on by market doubts over the trajectory of U.S. tax reform. European stocks are down -0.37% at a 2-week low after Kepler Cheuvreux downgraded European equities to ‘Underweight’ from perspective of international allocation. Asian stocks settled mostly lower: Japan -1.32%, Hong Kong +0.21%, China +0.44%, Taiwan -0.45%, Australia -0.13%, Singapore -0.03%, South Korea -0.49%, India -0.84%. China’s Shanghai Composite rose to a new 1-3/4 year high, led by a rally in bank stocks. China 10-year note yield jumped to a 3-year high of 3.98% on signs the government’s attempt to reduce leverage is working after China Oct aggregate financing, the broadest measure of credit growth, rose by a less-than-expected 1.04 trillion yuan, the smallest increase in a year.

The dollar index (DXY00 +0.13%) is up +0.16%. EUR/USD (^EURUSD) is down -0.09%. USD/JPY (^USDJPY) is down -0.16%.

Dec 10-year T-note prices (ZNZ17 +0.13%) are up +5 ticks.

Philadelphia Fed President Harker said he’s looking for another Fed rate hike this year and that the balance sheet unwind will be “boring.” He added that he would be more confident with three rate hikes next year if underlying inflation picks up above 2%.

ECB Vice President Constancio said “the Eurozone economy is experiencing a broad-based, robust and resilient recovery, but we know that this process still relies significantly on our monetary policy support.”

China Oct new yuan loans were +663.2 billion yuan, weaker than expectations of +783.0 billion yuan and the least amount of new loans in a year. Oct aggregate financing increase 1.04 trillion yuan, weaker than expectations of 1.10 trillion yuan and the smallest increase in a year.

Japan Oct PPI of +0.3% m/m and +3.4% y/y was stronger than expectations of +0.1% m/m and +3.1% y/y with the +3.4% y/y gain the sharpest year-on-year increase in 3 years.