Overnight Markets And News

Sep E-mini S&Ps (ESU18 -0.03%) this morning are unchanged and European stocks are up +0.05% at a 1-week high. U.S. stocks were under pressure on escalation of trade tensions as the U.S. and China imposed fresh $16 billion of tariffs on each other that began at midnight. Trading activity was muted as the markets were watching for any headlines to come out of ongoing trade talks in Washington between China and the U.S., and as the markets await the Fed’s annual 3-day conference in Jackson Hole, WY, that begins tonight and may provide clues as to the future course of monetary policy. Gains in European stocks were limited, and Sep COMEX copper (HGU18 -1.53%) fell -1.37% after the Eurozone Aug Markit manufacturing PMI unexpectedly fell to its slowest pace in 1-3/4 years. Asian stocks settled mixed: Japan +0.22%, Hong Kong -0.49%, China +0.37%, Taiwan +0.55%, Australia -0.34%, Singapore +1.56%, South Korea +0.44%, India +0.13%. Japan’s Nikkei Stock Index eked out a 1-1/2 week high as exporter stocks rallied after USD/JPY climbed to a 4-session high, which bolsters exporters’ earnings prospects.

The dollar index (DXY00 +0.08%) is up +0.08%. EUR/USD (^EURUSD -0.13%) is down -0.15%. USD/JPY (^USDJPY+0.20%)is up +0.18%.

Sep 10-year T-note prices (ZNU18 -0-015) are down -2 ticks.

The Eurozone Aug Markit manufacturing PMI unexpectedly fell -0.5 to 54.6, weaker than expectations of +0.1 to 55.2 and the slowest pace of expansion in 1-3/4 years. The Aug Markit composite PMI rose +0.1 to 54.4, weaker than expectations of +0.2 to 54.5.

ECB Governing Council member and Bundesbank President Weidmann said that with inflation heading toward the ECB’s goal, “it’s time to begin exiting the very expansionary monetary policy and the non-standard measures, especially considering their possible side effects.”

The German Aug Markit/BME manufacturing PMI fell -0.8 to 56.1, weaker than expectations of -0.4 to 56.5. The Aug Markit services PMI rose +1.1 to a 6-month high of 55.2, stronger than expectations of +0.2 to 54.3.

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