Overnight Markets and The Day Ahead

Lou Brien |

Stocks were generally weak in Asian trade. The Nikkei fell 3.1%, the Hang Seng was down 2.3%, Australia fell by that much too, while Shanghai was off 0.4%. European indexes are on offer this morning, with the DAX off 0.8% and the Footsie down a half percent. US stock futures are modestly higher as I write.

*The December reading of Australia’s Trade Balance is a deficit of A$3.535 billion. The trade gap was almost fifty percent larger than expected; it is the fourth largest trade shortfall in at least four decades. Exports were down 5% from a month earlier and Imports were down one percent on the month.

*The January reading of China’s service sector Purchasing Managers Index is 52.4, up from 50.2 the month before, according to Caixin; it is the best result in six months.

*The final January reading of the Euro Zone’s service sector PMI was unrevised at 53.6. But in France the services PMI was revised three tenths lower at 50.3; and in Germany this index was revised down four tenths to 55.0.

*The December reading of Euro Zone Retail Sales is +0.3% on the month, as forecast.

*Germany’s 5 Year sale earlier today was a technically failed auction, with €4.745 total bids versus €5 billion on offer; the allotment was €3.971 billion. I wonder why Germany couldn’t sell the full load?…….. Oh, did I mention the average yield of the 5 Year papers was -0.24%, a record low.

*US mortgage applications were down 2.6% in the week ended January 29, according to the Mortgage Bankers Association. Applications for Purchases were down 7.0% on the week, but those for Refinancing were up 0.3%.

*ADP is set to release at 7:15am CST its estimate for the net change in January for private sector nonfarm payrolls, it is expected to be +193k. The January reading of the ISM Nonmanufacturing Composite Index is due out at 9:00am CST, it is forecast to be 55.1, down from 55.8 the month before.

*The Treasury will at 7:30am CST announce the details for next week’s refunding auctions of 3 Year and 10 Year Notes and 30 Year Bonds.

*The weekly report on energy inventories is due out at 9:30am CST. Stocks of Crude Oil are forecast to increase 4.0 million barrels, Gasoline inventories are expected to be up 2.5 million and the estimate for Distillates is -1.5 million.

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