Overnight Markets And News

Jun E-mini S&Ps (ESM18 +0.43%) this morning are up +0.43% at a 2-week high and European stocks are up +0.16% at a 3-month high. A rally in energy stocks is boosting the overall market with a +2.58% surge in Jun WTI crude oil(CLM18 +2.85%) to a 3-1/2 year high. Crude oil has moved sharply higher since President Trump yesterday said the U.S. is withdrawing from the Iran nuclear deal and re-imposing sanctions on Iran and that buyers of Iranian crude have six months to curb their purchases or face stiff penalties. Crude oil also moved higher after API data late Tuesday showed U.S. crude inventories fell -1.85 million bbl last week. The rally in stocks pushed the 10-year T-note yield up over 3.00% to a 1-week high. Asian stocks settled mixed: Japan -0.44%, Hong Kong +0.44%, China -0.07%, Taiwan +0.11%, Australia +0.26%, Singapore +0.15%, South Korea -0.46%, India +0.29%.

The dollar index (DXY00 -0.10%) is down -0.10%. EUR/USD (^EURUSD +0.16%) is up +0.11%. USD/JPY (^USDJPY+0.50%) is up +0.52%.

Jun 10-year T-note prices (ZNM18 -0-065) are down -8.5 ticks at a 1-week low ahead of the Treasury’s auction of $25 billion in 10-year T-notes.

France Mar industrial production unexpectedly fell -0.4% m/m, weaker than expectations of +0.4% m/m. Mar manufacturing production rose +0.1% m/m, weaker than expectations of +0.9% m/m.

UK Apr BRC sales like-for-like fell -4.2% y/y, weaker than expectations of -0.8% y/y and the biggest decline in 13 years.

Japan Mar labor cash earnings rose +2.1% y/y, stronger than expectations of +1.0% y/y and the largest increase in 14-3/4 years. Mar real cash earnings rose +0.8% y/y, stronger than expectations of -0.5% y/y and the biggest increase in 1-1/2 years.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -2.5% to 388.6 with purchase sub-index -1.6% to 258.1 and refi sub-index -3.5% to 1104.9), (2) Apr PPI final demand (expected +0.2% m/m and +2.8% y/y, Mar +0.3% m/m and +3.0% y/y) and Apr PPI ex food & energy (expected +0.2% m/m and +2.4% y/y, Mar +0.3% m/m and +2.7% y/y), (3) revised Mar wholesale inventories (expected unrevised at +0.5%) and Mar wholesale trade sales (Feb +1.0% m/m), (4) EIA weekly Petroleum Status Report, (5) Treasury auctions $25 billion of 10-year T-notes, (6) Atlanta Fed President Raphael Bostic (voter) speaks on the economic outlook and monetary policy to the World Affairs Council.