OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 +0.71%) are up +0.69% and European stocks are up +1.53% as global stocks and emerging-market currencies rallied on speculation that a Fed interest rate increase has been pushed back into next year. European stocks rose further and EUR/USD fell back from a 1-1/2 month high on signs that the ECB is concerned about deflation and may expand QE after ECB Governing Council member Nowotny said both headline and core inflation in the Eurozone are “clearly missing our target,” which contrasts from comments he made three weeks ago when he said there was “equilibrium” in prices. Asian stocks settled higher: Japan +1.15%, Hong Kong +2.00%, China +2.32%, Taiwan +0.93%, Australia +0.63%, Singapore +1.05%, South Korea +1.20%, India +0.86%. China’s Shanghai Composite rallied up to a 1-1/2 month high after the Chinese government unveiled a $36 billion plan to reorganize China’s telecom industry, which bolstered speculation the government will accelerate reforms of state-owned companies to revive economic growth.

The dollar index (DXY00 +0.17%) is up +0.17% as it rebounds from an overnight 1-1/2 month low. EUR/USD (^EURUSD) is down -0.31% and retreated from a 1-1/2 month high after comments from ECB Governing Council member Nowotny fueled speculation the ECB may expand QE. USD/JPY (^USDJPY) is down -0.45% to a 1-1/2 month low.

Dec T-note prices (ZNZ15 -0.10%) are down -3.5 ticks.

ECB Governing Council member Nowotny hinted that the ECB may need to expand QE measures when he said both headline and core inflation in the Eurozone are “clearly missing our target” and that “additional” steps may be necessary to achieve growth.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +7,000 to 270,000, previous -13,000 to 263,000) and continuing claims (expected -4,000 to 2.200 million, previous +9,000 to 2.204 million), (2) Sep CPI (expected -0.2% m/m and -0.1% y/y, Aug -0.1% m/m and +0.2% y/y) and Sep CPI ex food & energy (expected +0.1% m/m and +1.8% y/y, Aug +0.1% m/m and +1.8% y/y), (3) Oct Empire manufacturing survey general business conditions (expected +6.67 to -8.00, Sep +0.25 to -14.67), (4) Oct Philadelphia Fed outlook survey diffusion index (expected +4.0 to -2.0, Sep-14.3 to -6.0), (5) New York Fed President William Dudley’s speech at the Brookings Institute in Washington, D.C. about how the Fed should decide the appropriate level of interest rates, (6) St. Louis Fed President James Bullard’s opening remarks at the St. Louis Fed’s annual fall policy conference, (7) Cleveland Fed President Loretta Mester’s speech at the NYU Stern Center for Global Business and Economy,