Overnight Developments

Dec E-mini S&Ps this morning are up +0.77% and European stocks are up +1.14%, both at 1-1/2 week highs, on optimism the trade conflict between the U.S. and China will soon be resolved. President Trump reportedly asked key cabinet secretaries to draw up a draft to signal a ceasefire in the trade conflict with China and that President Trump wants to reach an agreement on trade with Chinese President Xi Jinping when both leaders meet at the G-20 summit in Argentina later this month. Stocks gains were limited as Apple fell nearly 6% in pre-market trading after it forecast weaker-than-expected Q1 revenue growth. The rally in equities undercut demand for government debt as the 10-year German bund yield rose to a 1-week high of 0.438% and the 10-year T-note yield climbed to 1-1/2 week high of 3.170%. Asian stocks settled higher: Japan +2.56%, Hong Kong +4.21%, China +2.70%, Taiwan +0.63%, Australia +0.14%, Singapore +1.81%, South Korea +3.65%, India +1.68%. Asian markets rallied sharply on the prospects for a resolution to the U.S.-China trade conflict as China's Shanghai Composite climbed to a 3-week high and Japan's Nikkei Stock Index rose to a 1-1/2 week high. The yuan also rallied and climbed to a 5-week high against the dollar.

The dollar index is down -0.25% at a 1-week low. EUR/USD is up +0.40% at a 1-week high. USD/JPY is up +0.11.

Dec 10-year T-note prices are down -6 ticks at a 1-week low.

The Eurozone Oct Markit manufacturing PMI was revised downward to 52.0 from the previously reported 52.1, the slowest pace of expansion in 2-years.

The German Sep import price index rose +0.4% m/m and +4.4% y/y, slightly weaker than expectations of +0.4% m/m and +4.5% y/y.

The UK Oct Markit/CIPS construction PMI unexpectedly rose +1.1 to 53.2, stronger than expectations of -0.1 to 52.0.