OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU16 unch) are little changed, up +0.03%, and European stocks are down -0.85% on increased chances of a Fed rate hike this year after hawkish Fed comments last Friday at the Fed’s annual symposium in Jackson Hole, WY. The outlook for a near-term Fed rate hike has boosted the dollar and undercut commodity prices. Crude oil (CLV16 -1.34%) is down -1.34%, which has drug down energy producing stocks, while gold prices (GCZ16 -0.21%) are down -0.37% at a 2-month low, which has pushed mining stocks lower. Asian stocks settled mixed: Japan +2.30%, Hong Kong-0.38%, China -0.01%, Taiwan -0.24%, Australia -0.84%, Singapore -0.99%, South Korea +0.10%, India +0.43%. Japanese stocks rose as the Nikkei stock index climbed to a 1-1/2 week high after USD/JPY jumped to a 2-1/2 week high when BOJ Governor Kuroda said the BOJ “will act decisively as we move on.” The rally in USD/JPY boosted the outlook for exporters, with Toyota Motor and Mazda Motor up over 4%.

The dollar index (DXY00 +0.17%) is up +0.08% at a 2-week high. EUR/USD (^EURUSD) is down -0.15% at a 2-week low. USD/JPY (^USDJPY) is up +0.33% at a 2-1/2 week high.

Sep T-note prices (ZNU16 +0.11%) are up +3.5 ticks as they recover from a 2-month low posted in overnight trade.

ECB Executive Board member Coeure said “we may see short-term rates being pushed to the effective lower bound more frequently in the event of macroeconomic shocks” if governments don’t act to boost the growth potential of Eurozone economies.

BOJ Governor Kuroda said “the BOJ will act decisively as we move on” and the “zero bound is no longer insurmountable” as a policy constraint “in practice.” He said the current rate is “still far from such a lower bound” and that will carefully consider how to make the best use of the policy scheme in order to achieve the price stability target.