Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +0.51%) this morning are up +0.40% and European stocks are up +0.31% on stronger than expected company quarterly earnings results along with an easing of Italian political risks. BlackRock, Morgan Stanley and Johnson & Johnson all reported better than expected Q3 adjusted EPS and Walmart forecast sales growth this year and next year at the fastest pace in 10 years. European stocks rallied and the yield on Italy’s 10-year government bond fell to a 1-week low of 3.427% after the Italian government reached an agreement on a budget accord. Gains in European stocks were limited after the German Oct ZEW survey expectations of economic growth fell more than expected to a 6-year low. Asian stocks settled mixed: Japan +1.25%, Hong Kong +0.07%, China -0.85%, Taiwan +0.81%, Australia +0.56%, Singapore -0.38%, South Korea -0.10%, India +0.85%. Trade concerns undercut Chinese stocks as the Shanghai Composite fell to a nearly 4-year low. Chinese stocks were also under pressure after S&P Global Ratings warned that China’s local governments may have accumulated 40 trillion yuan ($5.8 trillion) of off-balance sheet debt, which may lead to increased defaults.

The dollar index (DXY00 -0.07%) is down -0.03%. EUR/USD (^EURUSD +0.04%) is up +0.01%. USD/JPY (^USDJPY +0.25%) is up +0.22%.

Dec 10-year T-note prices (ZNZ18 -0-015) are down -1.5 ticks.

The German Oct ZEW survey expectations of economic growth fell -14.1 to -24.7, weaker than expectations of -1.4 to -12.0 and matched July’s level as the lowest in 6 years.

ECB Governing Council member Vasiliauskas said there is no reason why the ECB shouldn’t end its net asset purchases as planned in December and could start discussing raising interest rates in the middle of 2019 and take decision next autumn if needed.

UK Aug avg hourly earnings rose +2.7% 3-mo avg y/y, stronger than expectations of +2.6% 3-mo avg y/y. Aug weekly earnings ex-bonus rose +3.1% 3-mo avg y/y, stronger than expectations of +2.9% 3-mo avg y/y and the fastest pace of increase n 9-1/2 years.