Overnight Markets And News

Sep E-mini S&Ps (ESU18 -0.27%) this morning are down -0.22% at a 1-week low and European stocks are down -0.62% at a 4-month low on concern about contagion from weakness in emerging markets. The Indonesian rupiah, Mexican peso, Turkish lira and South African rand all sold-off and raised concerns that their slumping currencies could lead to higher corporate borrowing costs in their economies that chokes off economic growth. Emerging market currencies remain under pressure after Tuesday’s stronger-than-expected U.S. Aug ISM manufacturing report boosted the odds of additional Fed rate hikes and strengthened the dollar. Energy stocks are weaker as well with Oct WTI crude oil (CLV18 -1.22%) down -1.36% after Tropical Storm Gordon pushed inland and did little damage to U.S. Gulf Coast oil installations. Asian stocks settled lower: Japan -0.51%, Hong Kong -2.61%, China-1.68%, Taiwan -0.24%, Australia -1.00%, Singapore -1.69%, South Korea -1.29%, India -0.37%. Asian stock markets moved lower due to wider turmoil in emerging markets and possible escalation of U.S./China trade tensions with the U.S. set to go ahead with tariffs on another $200 billion of Chinese goods. Japan’s Nikkei Stock Index fell to a 1-week low on trade worries after data from the U.S. Aug ISM manufacturing index showed U.S. export orders fell to a 10-month low in Aug and imports dropped to their lowest in 11-months, a sign that trade tensions are taking a toll on trade.

The dollar index (DXY00 +0.03%) is down -0.04%. EUR/USD (^EURUSD +0.03%) is up +0.09%. USD/JPY (^USDJPY+0.22%) is up +0.16%.

Dec 10-year T-note prices (ZNZ18 +0-035) are up +1.5 ticks.

Eurozone Jul retail sales fell -0.2% m/m, weaker than expectations of -0.1% m/m.

The Eurozone Aug Markit composite PMI was revised upward to 54.5 from 54.4.

The German Aug Markit services PMI was revised downward to 55.0 from 55.2, still the strongest pace of expansion in 6-months.

The UK Aug Markit/CIPS services PMI rose +0.8 to 54.3, stronger than expectations of +0.4 to 53.9.

The China Aug Caixin services PMI fell -1.3 to 51.5, weaker than expectations of -0.2 to 52.6 and the slowest pace of expansion in 10-months.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -1.7% to 344.0 with purchase sub-index -0.9% to 230.1 and refi sub-index -3.0% to 952.9), (2) Jul trade balance (expected -$50.2 billion, Jun -$46.3 billion), (3) St. Louis Fed President James Bullard (non-voter) speaks at the Real Return XII-Euromoney Conference in New York, (4) Minneapolis Fed President Neel Kashkari (non-voter) speaks at a town hall forum in Bozeman, Montana.