OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH16 -0.43%) are down -0.43% and European stocks are down 1.18% as energy producer companies decline after the price of crude oil (CLF16 -0.80%) drops -1.34% to a new 6-3/4 year low and natural gas prices slump -0.57% to a fresh 16-1/2 year low as increased production and above-normal U.S. winter temperatures boosts supplies. Asian stocks settled mostly lower: Japan -1.90%, Hong Kong -0.53%, China -0.03%, Taiwan -0.75%, Australia +0.09%, Singapore -0.29%, South Korea -0.48%, India -1.10%. Japan’s Nikkei Stock Index initially jumped to a 2-week high after the BOJ announced a new program of ETF purchases, but then fell back and closed sharply lower on disappointment over the size of the program as the BOJ announced 300 billion yen ($2.5 billion) of new purchases, only one tenth the size of its current ETF purchases.

The dollar index (DXY00 -0.39%) is down -0.39%. EUR/USD (^EURUSD) is up +0.10%. USD/JPY (^USDJPY) is down -1.13% as it fell back sharply from a 2-week high as further analysis of the BOJ’s new ETF program indicate a fine-tuning rather than an extension expansion of stimulus.

Mar T-note prices (ZNH16 +0.28%) are up +9.5 ticks.

The BOJ as expected kept its QE purchase program at an annual pace of 80 trillion yen ($656 billion), but lengthened the average maturities of Japanese government bonds it buys to 7 to 12 years from 7 to 10 years currently. In addition to its annual purchase of 3 trillion worth of ETFs, the BOJ established a new program to buy 300 billion yen ($2.5 billion) in ETFs that target companies investing “proactively in physical and human capital” and start from Apr 2016 with ETFs tracking the JPX-Nikkei Index 400.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) preliminary-Dec Markit U.S. services PMI (expected -0.2 to 55.9, Nov +1.3 to 56.1), (2) Dec Kansas City Fed manufacturing survey (expected +1 to 2, Nov +2 to 1), (3) Richmond Fed President Jeffrey Lacker’s delivery of his 2016 U.S. economic forecast to the Charlotte chamber of commerce, and (4) USDA Nov Cattle on Feed.