Overnight Markets and News
Jun E-mini S&Ps (ESM18 +0.03%) this morning are up +0.21% on signs of strong corporate quarterly earnings results with Kraft Heinz and Tableau Software both up 5% in pre-market trading after they reported better-than-expected Q1 profits. European stocks are down -0.34% on deflation concerns after Eurozone Apr core CPI rose +0.7% y/y, the slowest pace of increase in more than year. The slow pace of inflation is dovish for ECB monetary policy and boosted European government bonds as the 10-year German bund yield fell to a 2-week low of 0.553%. Asian stocks settled mixed: Japan closed for holiday, Hong Kong -1.34%, China+0.64%, Taiwan -0.99%, Australia +0.79%, Singapore -1.10%, South Korea -0.61%, India -0.21%. The U.S. trade envoy arrived in Beijing to begin trade talks today with Chinese trade representatives as both sides dial back expectations for a breakthrough. A Chinese official said his country won’t agree to preconditions for trade talks and American delegates said they might leave the talks early if no common ground is found.
The dollar index (DXY00 +0.02%) is down -0.01% after the Fed was less hawkish than expected in the FOMC post meeting statement. EUR/USD (^EURUSD +0.23%) is up +0.23. USD/JPY (^USDJPY -0.39%) is down -0.38%.
Jun 10-year T-note prices (ZNM18 +0-045) are up +5 ticks at a 1-1/2 week high on positive carry-over from a rally in German 10-year bund prices to a 2-week high.
Eurozone Mar PPI rose +0.1% m/m and +2.1% y/y, right on expectations.
The Eurozone Apr CPI estimate rose +1.2% y/y, weaker than expectations of +1.3% y/y. Apr core CPI rose +0.7% y/y, weaker than expectations of +0.9% y/y and the smallest pace of increase in 13-months.
The UK Apr Markit/CIPS services PMI rose +1.1 to 52.8, weaker than expectations of +1.8 to 53.5.
U.S. Stock Preview
Key U.S. news today includes: (1) Apr Challenger job cuts (Mar +39.4% y/y), (2) weekly initial unemployment claims (expected +16,000 to 225,000, previous -24,000 to 209,000) and continuing claims (expected -2,000 to 1.835 million, previous -29,000 to 1.837 million), (3) Q1 non-farm productivity (expected +0.9%, Q4 unch) and Q1 unit labor costs (expected +3.0%, Q4 +2.5%), (4) Mar trade balance (expected -$50.0 billion, Feb -$57.6 billion), (5) USDA weekly Export Sales, (6) final-Apr Markit U.S. services PMI (expected +0.1 to 54.5, prelim-Apr +0.4 to 54.4), (7) Apr ISM non-manufacturing PMI (expected -0.8 to 58.0, Mar -0.7 to 58.8), (8) Mar factory orders (expected +1.4%, Feb +1.2% and +0.1% ex transportation).
