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Barchart Morning Call 7/31


Barchart Morning Call

BC - Tue Jul 31, 7:00AM CDT

Overnight Developments

  • Sep E-mini S&Ps this morning are up by +0.18% and European stocks are also higher with the Euro Stoxx 50 up +0.28% at a 3-month high on speculation central banks will do more to support the global economy. The Fed begins a 2-day policy meeting today in Washington. EUR/USD is +% higher and the dollar index is lower. Commodity prices are mostly higher with crude oil up +0.19% and copper up +1.02%. Copper rose after China increased its railway spending for the second time in a month. Agricultural prices are stronger after Monday afternoon's weekly USDA crop conditions report showed the U.S. corn crop deteriorated for the eighth straight week. Dec corn is up +0.74% at a contract high and Nov soybeans are up +1.13% at a 1-week high. Sep T-notes are up +2 ticks.
  • Asian stocks today closed mostly higher: Japan +0.69%, Hong Kong +1.08%, China -0.12%, Australia +0.55%, South Korea +2.25%, India +0.54%. China's Shanghai Stock Index fell to a 3-1/3 year low on concern China's slowing economy will hurt earnings growth.
  • German July unemployment rose +7,000, right on expectations, while the German July unemployment rate remained unchanged at 6.8%, also right on expectations.
  • German Jun retail sales were mixed with the monthly figure unexpectedly falling -0.1% m/m, weaker than expectations of a +0.5% m/m increase, while year-over-year sales climbed +2.9% y/y, stronger than expectations of +0.4% y/y.
  • The Euro-Zone July CPI estimate rose +2.4% y/y, right on expectations.
  • The Euro-Zone Jun unemployment rate rose +0.1 to 11.2%, the highest since data began in 1995, but right on expectations.
  • Japan's Jun jobless rate unexpectedly fell -0.1 to 4.3%, a 9-month low and better than expectations of no change at 4.4%.
  • Japan Jun overall household spending climbed +1.6% y/y, weaker than expectations of +2.9% y/y.
  • For a second time this month, China's Ministry of Railways said it will increase spending on China's railroads and bridges this year after it announced plans to spend 470 billion yuan ($74 billion) on projects this year, 4.8% higher than a July 3 projection. Market Comments
    • Sep E-mini S&Ps this morning are up 2.50 points (+0.18%). The U.S. stock market on Monday closed lower: S&P 500 -0.05%, Dow Jones -0.02%, Nasdaq 100 -0.19%. The S&P 500 Index fell back from a 2-3/4 month high and finished lower on profit-taking as investors lightened up on some of their long positions ahead of this week's data on U.S. manufacturing and jobs along with the results of the FOMC and ECB policy meetings. Stocks remain buffeted though on hopes the FOMC at its 2-day meeting Tuesday and Wednesday might implement additional easing moves along with the possibility the ECB may ramp up its buying of European sovereign debt to contain the recent surge in government yields.
    • Sep 10-year T-notes this morning are up +2 ticks. Sep 10-year T-note prices on Monday rebounded from last Friday's sharp losses and closed higher: TYU2 +14, FVU2 +7.2. T-note prices rallied Monday on increased safe-haven demand as stocks faltered along with speculation the ECB may not do enough to stem the European sovereign-debt crisis.
    • The dollar index this morning is lower with EUR/USD +0.18% and USD/JPY +0.03%. The dollar index on Monday closed higher: Dollar index +0.085 (+0.10%), EUR/USD -0.00014 (-0.01%), USD/JPY -0.07 (-0.01%). EUR/USD weakened on speculation the ECB will expand its balance sheet to stem the rise of European government bond yields, which is negative for the euro. Weaker stock prices also prompted a safe-haven bid for dollar assets although a fall in Spain's 10-year bond yield to a 2-week low limited declines in the euro.
    • Sep WTI crude oil prices this morning are higher by +17 cents a barrel (+0.19%). Sep gasoline is down -0.0088 (-0.31%). Crude oil and gasoline prices Monday finished mixed as a strong dollar and weak stocks undercut crude but gasoline settled higher on supply concerns after Enbridge Energy Partners shut down an oil pipeline from Superior, Wisconsin into Chicago and refinery outages were reported in the Chicago area at Citgo Petroleum's Lemont, Illinois plant and at BP's Whiting, Indiana refinery: CLU2 -0.35 (-0.39%), RBU2 +0.0217 (+0.78%).
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      Global Financial Calendar

      Tuesday 7/31/12
      United States
      0745 ET ICSC (Int'l Council of Shopping Centers) weekly retailer sales.
      0830 ET Q2 employment cost index expected +0.5%, Q1 +0.4%.
      0830 ET June personal income expected +0.4%, May +0.2% m/m. June personal spending expected +0.1% m/m, May unch m/m.
      0830 ET June PCE deflator expected unch m/m and +1.7% y/y, May -0.2% m/m and +1.5% y/y. June PCE core deflator expected +0.2% m/m and +1.8% y/y, May +0.1% m/m and +1.8% y/y.
      0855 ET Redbook weekly retailer sales.
      0900 ET May S&P/Case-Shiller 20-city composite home price index expected +0.4% m/m and -1.5% y/y, Apr +0.67% m/m and -1.9% y/y.
      0945 ET July Chicago purchasing managers index expected -0.4 to 52.5, June +0.2 to 52.9.
      1000 ET July U.S. consumer confidence (Conference Board) expected -0.6 to 61.4, June -2.4 to 62.0.
      1130 ET Weekly 4-week T-bill auction.
      1630 ET API weekly U.S. oil statistics.
      0100 ET Japan June construction orders, May -0.9% y/y. June annualized housing starts expected 916,00, May 903,000. June housing starts expected +9.4% y/y, May +9.3% y/y.
      0200 ET German June retail sales expected +0.5% m/m and +0.4% y/y, May -0.3% m/m and -1.1% y/y.
      0355 ET German July unemployment rate expected unch at 6.8%, June 6.8%. July unemployment change expected +7,000, June +7,000.
      0500 ET Eurozone July CPI estimate expected +2.4% y/y, June +2.4% y/y.
      0500 ET Eurozone June unemployment rate expected 11.2%, May 11.1%.
      United Kingdom
      1901 ET UK July BRC Shop Price index, June +1.1% y/y.
      2100 ET China July manufacturing PMI (China Federation of Logistics and Purchasing) expected +0.2 to 50.4, June -0.2 to 50.2.
      2230 ET China July HSBC manufacturing PMI expected near flash report of +1.3 to 49.5, June -0.2 to 48.2. provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.