Stock Market Update

The S&P 500 futures are down three points and are trading 0.1% below fair value, the Nasdaq 100 futures are up one point and are trading roughly in line fair value, and the Dow Jones Industrial Average futures are down 17 points and are trading 0.1% below fair value.

Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's CPI and core CPI growth accelerated on a yr/yr basis in May, but core CPI growth was a touch below expectations. Flash Manufacturing PMI readings from the region showed a deceleration in the pace of growth in Japan while Australia's reading fell deeper into contraction. Australian respondents blamed high rates and weak economic conditions for the poor showing. Meanwhile, Japan's Services PMI fell into contraction (actual 49.8; prior 53.8). China's Housing Ministry urged local governments to speed up purchases of unsold homes. The Japanese government will consider raising the minimum wage next week. Bank Indonesia left its policy rate at 6.25%, as expected.

• In economic data:
  • Japan's May National CPI 0.5% m/m (last 0.4%); 2.8% yr/yr (last 2.5%). May National Core CPI 2.5% yr/yr (expected 2.6%; last 2.2%). Flash June Manufacturing PMI 50.1 (expected 50.6; last 50.4) and flash Services PMI 49.8 (last 53.8)
  • South Korea's May PPI 0.1% m/m (last 0.3%); 2.3% yr/yr (last 1.9%)
  • India's flash June Manufacturing PMI 58.5 (last 57.5) and flash Services PMI 60.4 (expected 60.0; last 60.2)
  • Hong Kong's May CPI -0.2% m/m (last -0.7%); 1.2% yr/yr (expected 1.3%; last 1.1%)
  • Australia's flash June Manufacturing PMI 47.5 (last 49.7) and flash Services PMI 50.6 (last 52.5)

---Equity Markets---

• Japan's Nikkei: -0.1% (-0.6% for the week)
• Hong Kong's Hang Seng: -1.7% (+0.5% for the week)
• China's Shanghai Composite: -0.2% (-1.1% for the week)
• India's Sensex: -0.4% (+0.3% for the week)
• South Korea's Kospi: -0.8% (+0.9% for the week)
• Australia's ASX All Ordinaries: +0.4% (+0.8% for the week)

Major European indices are on track for a lower finish to the week. Flash Manufacturing and Services PMI readings from France and Germany disappointed while the U.K.'s Manufacturing PMI showed slightly higher than expected growth. The weak results fueled some speculation that the European Central Bank could announce another rate cut sooner rather than later. French Finance Minister Le Maire said that the promise to reduce public spending should not be underestimated.

• In economic data:
  • Eurozone's flash June Manufacturing PMI 45.6 (expected 48.0; last 47.3) and flash Services PMI 52.6 (expected 53.5; last 53.2)
  • U.K.'s May Retail Sales 2.9% m/m (expected 1.6%; last -1.8%); 1.3% yr/yr (expected -0.9%; last -2.3%). May Core Retail Sales 2.9% m/m (expected 1.3%; last -1.4%); 1.2% yr/yr (expected -0.8%; last -2.5%). May Public Sector Net Borrowing GBP14.10 bln (expected GBP14.50 bln; last GBP17.52 bln). Flash June Manufacturing PMI 51.4 (expected 51.3; last 51.2) and flash Services PMI 51.2 (expected 53.0; last 52.9)
  • Germany's flash June Manufacturing PMI 43.4 (expected 46.4; last 45.4) and flash Services PMI 53.5 (expected 54.4; last 54.2)
  • France's June Business Survey 99 (expected 100; last 99). Flash June Manufacturing PMI 45.3 (expected 46.8; last 46.4) and flash Services PMI 48.8 (expected 50.0; last 49.3)

---Equity Markets---

• STOXX Europe 600: -0.9% (+0.6% week-to-date)
• Germany's DAX: -0.4% (+0.9% week-to-date)
• U.K.'s FTSE 100: -0.6% (+0.9% week-to-date)
• France's CAC 40: -0.5% (+1.8% week-to-date)
• Italy's FTSE MIB: -1.1% (+2.0% week-to-date)
• Spain's IBEX 35: -1.2% (+0.3% week-to-date)