OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU17 +0.20%) this morning are up +0.18% and European stocks are up +0.78% as energy stocks climb with the price of Aug WTI crude oil (CLQ17 +1.60%) up +1.62%. Crude oil rallied after API data released late Tuesday showed U.S. crude inventories last week fell by -8.13 million bbl. European stocks also garnered support on signs of strength in industrial activity after Eurozone May industrial production rose +1.3% m/m, the largest increase in 6-months. Trading activity was muted ahead of Fed Chair Yellen’s testimony before the U.S. House Financial Services Committee about the economy and to when the Fed plans to shrink its balance sheet. Asian stocks settled mixed: Japan -0.48%, Hong Kong +0.64%, China -0.17%, Taiwan +0.05%, Australia -0.98%, Singapore -0.31%, South Korea unch, India +0.18%. Chinese stocks retreated and the yuan rose to a 1-week high against the dollar after China Jun new yuan loans rose by +1.54 trillion yuan, the biggest increase in 5 months, which reduces the chances of additional government stimulus.

The dollar index (DXY00 +0.07%) is up +0.11%. EUR/USD (^EURUSD) is down -0.06%. USD/JPY (^USDJPY) is down -0.39%.

Sep 10-year T-note prices (ZNU17 +0.11%) are up +4.5 ticks.

China Jun new yuan loans rose by +1.54 trillion yuan, stronger than expectations of +1.30 trillion yuan and the biggest increase in 5 months. Jun aggregate financing rose +1.78 trillion yuan, higher than expectations of +1.50 trillion yuan.

Eurozone May industrial production rose +1.3% m/m, stronger than expectations of +1.0% and the largest increase in 6-months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +1.4% with purchase sub-index +3.1% and refi sub-index -0.4%), (2) release of Chair Janet Yellen’s opening statement on the economic outlook ahead of her semi-annual testimony starting at 1000 ET before the U.S. House Financial Services Committee, (3) Treasury auctions $20 billion of 10-year T-notes, (4) Fed Beige Book, (5) Kansas City Fed President Esther George (non-voter) speaks on the economic outlook and the Fed’s balance sheet at a Kansas City Fed luncheon, (6) EIA Weekly Petroleum Status Report, (7) USDA Jul WASDE crop production.