Morning Call For Wednesday, Oct. 31

Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +0.68%) this morning are up +0.69% on strength in technology stocks led by a rally in Facebook which is up almost 4% in pre-market trading after it reported better-than-expected Q3 earnings. European stocks are up +1.59% at a 1-week high on better-than expected quarterly earnings results from L’Oreal SA and Sanofi. Also, strength in European exporter stocks are positive for the overall market after EUR/USD (^EURUSD+0.05%) fell to a 2-1/2 month low. Asian stocks settled higher: Japan +2.16%, Hong Kong +1.60%, China +1.35%, Taiwan +2.90%, Australia +0.43%, Singapore +1.76%, South Korea +0.59%, India +1.63%. The BOJ as expected kept its policy interest rates and its QE program unchanged and it forecast inflation will remain below target until at least 2021. That sparked a rally in USD/JPY to a 3-week high that spurred gains in exporter stocks to lead the Nikkei Stock Index higher. Chinese stocks rallied on month-end short covering despite weaker-than-expected manufacturing data that showed the China Oct manufacturing PMI fell -0.6 to 50.2, the slowest pace of growth in 2-1/4 years. The weak economic data spurred losses in the yuan which fell to a 10-1/4 year low of 6.9783 per dollar.

The dollar index (DXY00 -0.11%) is up +0.01% at a 16-month high. EUR/USD (^EURUSD +0.05%) is down -0.03% at a 2-1/2 month low. USD/JPY (^USDJPY -0.02%) is up +0.02% at a 3-week high.

Dec 10-year T-note prices (ZNZ18 -0-070) are down -7.5 ticks.

The Eurozone Sep unemployment rate was unch at 8.1%, right on expectations.

Eurozone Oct CPI rose +2.2% y/y, right on expectations and the fastest pace of increase in 6 years. Oct core CPI rose +1.1% y/y, right on expectations.

German Sep retail sales of +0.1% m/m and -2.6% y/y was weaker than expectations of +0.5% m/m and +1.0% y/y with the -2.6% y/y drop the biggest year-on-year decline in 5 years.

The China Oct manufacturing PMI fell -0.6 to 50.2, weaker than expectations of -0.2 to 50.6 and the slowest pace of growth in 2-1/4 years.

The China Oct non-manufacturing PMI fell -1.0 to 53.9, weaker than expectations of -0.3 to 54.6 and the slowest pace of growth in 14 months.

Japan Sep industrial production fell -1.1% m/m, weaker than expectations of -0.3% m/m.