OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM16 -0.38%) are down -0.31% and European stocks are down -0.89% on signs of lackluster global manufacturing activity. The German May Markit/BME manufacturing PMI was revised lower, Japan’s May Nikkei PMI contracted at the steepest pace in over 3 years, and China’s May manufacturing PMI remained basically flat. A -1.22% slide in July WTI crude oil (CLN16 -1.20%) to a 1-week low undercut energy producers, and U.S. stocks were under pressure after the OECD revised its U.S. 2016 GDP forecast downward. Asian stocks settled mostly lower: Japan -1.62%, Hong Kong -0.26%, China -0.11%, Taiwan +0.72%, Australia -1.03%, Singapore -0.02%, South Korea -0.02%, India +0.17%.

The dollar index (DXY00 -0.38%) is down -0.34% after the OECD cut its U.S. 2016 GDP forecast and EUR/USD (^EURUSD) is up +0.26% after the OECD raised its Eurozone 2016 GDP forecast to 1.6% from a Feb estimate of 1.4%. USD/JPY (^USDJPY) is down -1.11%.

Sep T-note prices (ZNU16 +0.06%) are up +1 tick.

The OECD cut its U.S. 2016 GDP estimate to 1.8% from a Feb projection of 2.0% and raised its Eurozone 2016 GDP forecast to 1.6% from a Feb estimate of 1.4%. The OECD kept its global 2016 GDP estimate unchanged at 3.0%, but warned that the global economy is slipping into a self-fulfilling “low-growth trap” where ultra-loose monetary policy risks doing more harm than good.

The China May manufacturing PMI was unchanged at 50.1, stronger than expectations of -0.1 to 50.0.

The German May Markit/BME manufacturing PMI was revised downward to 52.1 from the originally reported 52.4.

The Japan May Nikkei manufacturing PMI was revised upward to 47.7 from the originally reported 47.6, still the steepest pace of contraction since the data series began in 2013.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +2.3% with purchase sub-index +4.8% and refi sub-index +0.4%), (2) revised-May Markit U.S. manufacturing PMI (expected unrevised at 50.5, preliminary-May -0.3 to 50.5), (3) May ISM manufacturing index (expected -0.5to 50.3, Apr -1.0 to 50.8), (4) Apr construction spending (expected +0.6%, Mar +0.3%), (5) Fed Beige Book, (6) May total vehicle sales (expected 17.30 million, Apr 17.32 million).