OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU17 -0.09%) this morning are down -0.06% and European stocks retreated from a 1-week high and are down -0.06% as weakness in energy producing companies drags the overall market lower. Aug WTI crude oil CLQ17 -0.97%) is down -0.72% and is undercutting energy stocks on concern the global oil glut will persist after Goldman Sachs warned that measures taken by OPEC to curb production don’t go far enough without sustained U.S. inventory declines and a drop in the active rig count. Also, Saudi Arabia said it pumped crude at a 10.07 million bpd rate in Jun, up from 9.88 million bpd in May and above its crude production limit of 10.058 million bpd agreed upon as part of OPEC’s production cuts. Asian stocks settled mixed: Japan +0.57%, Hong Kong +1.48%, China -0.30%, Taiwan +1.22%, Australia +0.08%, Singapore -0.85%, South Korea +0.68%, India +0.10%. Japan’s Nikkei Stock index rose to a 1-week high, led by a rally in exporter stocks, as a rally in USD/JPY to a 3-3/4 month high boosts the earnings prospects of exporters.

The dollar index (DXY00 +0.10%) is up +0.09%. EUR/USD (^EURUSD) is down -0.02%. USD/JPY (^USDJPY) is up +0.24% at a 3-3/4 month high.

Sep 10-year T-note prices (ZNU17 -0.10%) are down -4 ticks.

San Francisco Fed President Williams said that the latest U.S. jobs report shows the economy is strong and that forecasts of one more rate hike this year seems reasonable. He added that it makes sense to begin balance sheet normalization this year.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) May JOLTS job openings (expected -119,000 to 5.925 million, Apr +259,000 to 6.044 million), (2) final-May wholesale inventories (expected unrevised from prelim-May’s +0.3%), (3) Fed Governor Lael Brainard speaks at a conference on normalizing central banks’ balance sheets jointly sponsored by the New York Fed and Columbia University’s School of International and Public Affairs, (4) Treasury auctions $24 billion of 3-year T-notes.