OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 +0.31%) rebounded from a 2-week low and are up +0.21% and European stocks recovered from a 4-week low and are up +0.84% after the new orders sub-index in the Eurozone Sep Markit manufacturing PMI rose to a 5-month high, which signals increased production in the coming months. Stocks also found support after a rally in crude oil and copper boosted energy producers and basic-resource companies. Stocks had been weaker and emerging markets closed mostly lower after a gauge of Chinese manufacturing activity unexpectedly fell to its lowest in 6-1/2 years. Asian stocks closed mostly lower: Japan closed for holiday, Hong Kong -2.29%, China -2.19%, Taiwan -2.06%, Australia -2.07%, Singapore-0.79%, South Korea -1.85%, India +0.67%.

The dollar index (DXY00 -0.12%) is down -0.11% as it fall back from a 2-week high. EUR/USD (^EURUSD) is up +0.36% and recovered from a 2-week low after ECB Governing Council member Nowotny said he’s wary of expanding QE. USD/JPY (^USDJPY) is up +0.06%.

Dec T-note prices (ZNZ15 -0.13%) are down -7 ticks.

ECB Governing Council member Nowotny said he’s wary of increasing QE any time soon and that the question of whether more easing is needed “deserves a much more thorough examination.”

The China Sep Caixin manufacturing PMI unexpectedly fell -0.3 to 47.0, weaker than expectations of +0.2 to 47.5 and the steepest pace of contraction in 6-1/2 years.

The Eurozone Sep Markit manufacturing PMI fell -0.3 to 52.0, right on expectations and matched April’s reading as the slowest pace of growth in 7 months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -7.0% with purchase sub-index -4.2% and refi sub-index -9.1%), (2) prelim-Sep Markit manufacturing PMI (expected -0.2 to 52.8, Aug 53.0), (3) Atlanta Fed President Dennis Lockhart’s speech on the economy to the Buckhead Rotary Club in Atlanta, and (4) the Treasury’s auction of $35 billion of 5-year T-notes and $13 billion of 2-year floating rate notes.