Stock Market Update

The S&P 500 futures are down five points and are trading 0.1% below fair value, the Nasdaq 100 futures are up 11 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are down 88 points and are trading 0.2% below fair value.

Equity indices in the Asia-Pacific region began the week on a mostly lower note while markets in Singapore and India were closed for holidays. Bank of Japan Governor Ueda acknowledged that a July rate hike is a possibility and that the central bank is likely to reduce its purchases by a "considerable volume" at the upcoming meeting. House prices in 67 out of 70 Chinese cities decreased in May. China and Australia agreed to enhance their free trade agreement. The People's Bank of China left its medium-term lending facility rate at 2.50%.

• In economic data:
  • China's May Industrial Production 5.6% yr/yr (expected 6.2%; last 6.7%), Retail Sales 3.7% yr/yr (expected 3.0%; last 2.3%), and Fixed Asset Investment 4.0% yr/yr (expected 4.2%; last 4.2%). May Unemployment Rate 5.0%, as expected (last 5.0%) and May House Prices -3.9% yr/yr (last -3.1%)
  • Japan's April Core Machinery Orders -2.9% m/m, as expected (last 2.9%); 0.7% yr/yr (expected -0.1%; last 2.7%)
  • Australia's May job advertisements -2.1% m/m (last -2.3%)

---Equity Markets---

• Japan's Nikkei: -1.8%
• Hong Kong's Hang Seng: UNCH
• China's Shanghai Composite: -0.6%
• India's Sensex: HOLIDAY
• South Korea's Kospi: -0.5%
• Australia's ASX All Ordinaries: -0.5%

Major European indices are mixed. Pre-election polls from France suggest that Marine Le Pen's National Rally is on track to receive about 35% of the vote while President Macron's party is expected to come in third place with about 19% of the vote. The European Central Bank has reportedly not discussed activating the transmission protection instrument, which is aimed at preventing bond spreads from widening significantly. European Central Bank policymaker Vucic said that inflation must improve to allow for a rate cut in September.

• In economic data:
  • Eurozone's Q1 Labor Cost Index 5.1% yr/yr (expected 4.9%; last 3.4%) and wages 5.3% yr/yr (last 3.2%)
  • Italy's May CPI 0.2% m/m, as expected (last 0.1%); 0.8% yr/yr, as expected (last 0.8%)
  • Spain's April trade deficit EUR4.70 bln (last deficit of EUR2.00 bln)

---Equity Markets---

• STOXX Europe 600: -0.2%
• Germany's DAX: +0.1%
• U.K.'s FTSE 100: -0.1%
• France's CAC 40: +0.4%
• Italy's FTSE MIB: +0.6%
• Spain's IBEX 35: -0.5%