OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.08%) this morning are up +0.06% and European stocks are up +0.15% on the prospects that that the ECB will extend its QE program for 9 months until Sep 2018. According to the report, an unnamed official said the ECB will reduce its bond purchases in half to 30 billion euros a month from the current 60 billion euros starting in Jan, but will extend the program until Sep of 2018. EUR/USD weakened on the report and the 10-year German bund yield dropped to a 2-1/2 week low of 0.415%. Strength in the Chinese economy is also positive for global growth after China Sep imports rose a more-than-expected +18.7% y/y, the largest increase in 6-months. Mining stocks are higher as Dec COMEX copper (HGZ17 +0.21%) climbs +0.46% to a new 1-month high on strong Chinese demand after China Sep copper imports rose +10% m/m and +26.5% y/y to 430,000 MT. Energy stocks are higher as well with Nov WTI crude oil (CLX17 +1.92%) up +1.84% at a 1-1/2 week high. Crude prices rallied on strength in Chinese demand after China Sep crude imports rose +13% m/m to 9.04 million bpd, the second-highest on record. Asian stocks settled mostly higher: Japan +0.96%, Hong Kong +0.06%, China +0.13%, Taiwan +0.12%, Australia +0.34%, Singapore +0.49%, South Korea -0.23%, India +0.78%. Japan’s Nikkei Stock Index rallied over 21,000 to a 20-3/4 year high and found support on comments from BOJ Governor Kuroda who said the BOJ will keep up current monetary easing to hit its 2% inflation target, even as that goal remains a distance away.

The dollar index (DXY00 +0.13%) is up +0.01%. EUR/USD (^EURUSD) is down -0.05%. USD/JPY (^USDJPY) is down -0.12% to a 2-week low.

Dec 10-year T-note prices (ZNZ17 -0.05%) are down -0.5 of a tick.

The ECB is considering reducing its QE program by half starting in Jan and extending the program for 9-months, according to unnamed officials because the deliberations are private. The ECB will reduce the pace of its asset purchases to 30 billion euros ($36 billion) a month from the current pace of 60 billion euros a month. The ECB will announce the future of their bond-buying program when they meet next on Oct 26.

The China Sep trade balance shrank to a surplus of $28.47 billion, smaller than expectations of +$38.00 billion and the smallest surplus in 6-months. Sep exports rose +8.1% y/y, weaker than expectations of +10.0% y/y. Sep imports rose +18.7% y/y, stronger than expectations of +14.7% y/y and the biggest increase in 6-months.