Sep E-mini stock futures this morning are up +3.00 points (+0.11%) at a 1-week high and European stocks are up +0.56%. A rally in energy producing stocks is leading the overall market higher with Sep WTI crude oil up +1.47% on signs of tighter global supplies after Saudi Arabia said it cut its crude production in Jul to 10.3 million bpd in from 10.489 million bpd in Jun. Trade concerns limited the upside in equity markets after National Security Adviser Bolton said the U.S. will take the trade war “far enough to get China to change” and China said it is prepared for a “protracted trade war” and doesn’t fear sacrificing short-term economic interests. Gains in European stocks were limited, and EUR/USD fell -0.25% to a 1-1/4 month low against the dollar after German Jun factory orders posted their sharpest decline in 17-months. Asian markets settled mostly lower as China’s Shanghai Composite closed down -1.29% at a 1-month low and Japan’s Nikkei Stock Index closed down -0.06%. Trade concerns weighed on Chinese stocks although the yuan rebounded from a 14-month low against the dollar after the PBOC Friday night imposed a reserve requirement of 20% on trading of some foreign-exchange forward contracts, making it more expensive to short the yuan. The dollar index is up +0.31% at a 2-week high. USD/JPY is up +0.17%. GBP/USD is down -0.47% at an 11-month low on ramped up Brexit concerns after UK International Trade Secretary Fox said a “no-deal” Brexit is now more likely than not. Sep 10-year T-notes are up +1.5 ticks.
German Jun factory orders fell -4.0% m/m, weaker than expectations of -0.5% m/m and the biggest decline in 17-months.
The German Jul Markit construction PMI fell -3.0 to 50.0, the slowest pace of expansion in 4-months.
The Eurozone Jul Sentix investor confidence rose +2.6 to 14.7, stronger than expectations of +1.3 to 13.4.
ECB Governing Council member Nowotny said he supports a “faster” normalization of monetary policy, saying “a slow increase” in rates wouldn’t harm the Eurozone economy.
ECB Executive Board member Lautenschlaeger said it would be wrong to change course “abruptly” after very expansive monetary policy and “the art is to find a clear exit that doesn’t interrupt growth.”
Morning Markets Last Chg %chg
E-mini S&P 500 (U8) 2842.50 3.00 0.11%
Europe Euro Stoxx 50 3501.79 19.39 0.56%
Japan Nikkei Index 22507 -18 -0.08%
China Shanghai Comp. 2705 -35 -1.29%
10yr T-notes (CBT)(U8) 119.210 0.015 0.04%
U.S. Dollar Index 95.456 0.295 0.31%
Euro FX (EUR/USD) 1.1539 -0.0029 -0.25%
Dollar-yen (USD/JPY) 111.44 0.19 0.17%
Sterling (GBP/USD) 1.2940 -0.0061 -0.47%
WTI Crude Oil (U8) 69.50 1.01 1.47%
Brent Crude Oil (V8) 73.98 0.77 1.05%
Gasoline (Nymex) (U8) 2.0775 0.0120 0.58%
Gold (Comex) (Z8) 1217.8 -5.4 -0.44%
Silver (Comex) (U8) 15.355 -0.107 -0.69%
Copper (Comex) (U8) 2.721 -0.043 -1.56%