Overnight Developments
CRB - Commodity Research Bureau - CRB - Fri Aug 10, 6:33AM CDT

Sep E-mini S&Ps this morning are down -0.44% and European stocks sank -1.33% to a 3-week low on concern Turkey's economic problems will spill over into the Eurozone. EUR/USD fell to a 13-momnth low and the 10-year German bund yield declined to a 3-week low after the Financial Times reported the ECB is concerned about the exposure of some European banks to Turkey following the plunge in the Turkish lira to a fresh record low. The ECB cites Banco Bilboa Vizcaya Argentaria SA, UniCredit SpA and BNP Paribas SA as particularly exposed to losses in the lira and the risk is Turkish borrowers that are not hedged could start to default on foreign-currency loans. The lira sank another 3% today to a record low 6.3005 versus the dollar and has plunged more than 68% since the start of the year. The Russian ruble sank to a 2-year low versus the dollar today and the yield on the Russian 10-year bond rose to a 1-1/2 year high of 8.26% on risk of U.S. sanctions on Russian government debt. Asian stocks settled mostly lower: Japan -1.33%, Hong Kong -0.84%, China +0.03%, Taiwan -0.40%, Australia -0.31%, Singapore -1.26%, South Korea -1.27%, India -0.41%. Japan's Nikkei Stock Index fell to a 4-week low despite Japan Q2 GDP growing at a faster-than-expected pace. Japanese exporter stocks led the overall market lower as USD/JPY fell to a 2-week low on speculation the stronger-than-expected Japan Q2 GDP will prompt the BOJ to end its QE program.

The dollar index is up +0.53% at a 13-month high. EUR/USD is down -0.49% at a 13-month low. USD/JPY is down -0.18% at a 2-week low. GBP/USD is down -0.41% at a 13-month low on heightened concern about a no-deal Brexit.

Sep 10-year T-note prices are up +9.5 ticks at a 3-week high.

Japan Q2 GDP rose +1.9% (q/q annualized), stronger than expectations of +1.4% (q/q annualized). Q2 private consumption rose +0.7% q/q, stronger than expectations of +0.2% q/q. Q2 business spending rose +1.3% q/q, stronger than expectations of +0.6% q/q. The Q2 GDP deflator rose +0.1% y/y, stronger than expectations of unch y/y.

Japan Jul PPI rose +0.5% m/m and +3.1% y/y, stronger than expectations of +0.2% m/m and +2.9% y/y with the +3.1% y/y gain the largest year-on-year increase in 8 months.

UK Q2 GDP rose +0.4% q/q and +1.3% y/y, right on expectations.

UK Jun industrial production rose +0.4% m/m and +1.1% y/y, stronger than expectations of +0.3% m/m and +0.7% y/y.

UK Jun manufacturing production rose +0.4% m/m and +1.5% y/y, stronger than expectations of +0.3% m/m and +1.0% y/y.