Overnight Markets And News

Sep E-mini S&Ps (ESU18 +0.25%) this morning are up +0.24% at a new all-time nearest-futures high and European stocks are up +0.27% at a 2-week high in thin trading with Britain closed for a bank holiday. Positive trade news pushed stocks higher on signs that the U.S. and Mexico were close to a nee Nafta deal after President Trump after President Trump tweeted Saturday that the U.S. could have a “big Trade Agreement” with Mexico soon. European stocks received a boost after German Aug IFO business confidence rose for the first time in nine months to a 6-month high. Asian stocks settled higher: Japan +0.88%, Hong Kong +2.17%, China +1.89%, Taiwan +0.86%, Australia +0.34%, Singapore +0.39%, South Korea +0.44%, India +1.16%. Asian stock markets rallied Monday with China’s Shanghai Composite at a 2-week high and Japan’s Nikkei Stock Index at a 1-1/4 month high as the yuan stabilized after the PBOC signaled Friday that it was acting to support the currency through its daily fixing. The yuan had tumbled to a 1-1/2 year low against the dollar earlier this month, which had weighed on Chinese stocks on concern the weak yuan would prompt capital outflows out of China. Asian markets also garnered support on Friday’s comments from Fed Chair Powell that the Fed would maintain its gradual pace of interest-rate increases.

The dollar index (DXY00 unch) is up +0.07%. EUR/USD (^EURUSD +0.01%) is down -0.03%. USD/JPY (^USDJPY -0.12%) is down -0.13%.

Sep 10-year T-note prices (ZNU18 +0-010) are up +2.5 ticks.

The German Aug IFO business climate rose +2.1 to a 6-month high of 103.8, stronger than expectations of +0.1 to 101.8 and the first increase in 9 months.

China Jul industrial profits rose +16.2% y/y, the smallest increase in 4-months.

U.S. Stock Preview

Key U.S. news today includes: (1) Jul Chicago Fed national activity index (expected +0.02 to 0.45, Jun +0.88 to 0.43), (2) Aug Dallas Fed manufacturing activity (expected -2.3 to 30.0, Jul -4.2 to 32.3), (3) USDA weekly grain export inspections, (4) Treasury auctions $36 billion of 2-year T-notes, (5) USDA weekly Crop Progress.