Stock Market Update

The S&P 500 futures currently trade 21 points above fair value. 

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan Prime Minister Takaichi's cabinet is expected to approve stimulus spending on Friday with reports suggesting that the package could exceed the previously reported amount of JPY20 trln. Continued weakness in Japanese debt drove yields on most tenors to fresh highs for the year while expectations for a December rate hike from the Bank of Japan receded amid indications the central bank plans no hikes until March. China reinstated its ban against Japanese seafood amid growing political tension between the two nations.

• In economic data:
  • Japan's September Core Machinery Orders 4.2% m/m (expected 2.2%; last -0.9%); 11.6% yr/yr (expected 5.4%; last 1.6%)
  • Australia's October MI Leading Index 0.1% m/m (last 0.0%). Q3 Wage Price Index 0.8% qtr/qtr, as expected (last 0.8%); 3.4% yr/yr, as expected (last 3.4%)
  • New Zealand's Q3 Input PPI 0.2% qtr/qtr (expected 0.9%; last 0.6%) and Output PPI 0.6% qtr/qtr (expected 0.7%; last 0.6%)

---Equity Markets---

• Japan's Nikkei: -0.3%
• Hong Kong's Hang Seng: -0.4% 
• China's Shanghai Composite: +0.2%
• India's Sensex: +0.6%
• South Korea's Kospi: -0.6%
• Australia's ASX All Ordinaries: -0.2%

Major European indices trade near their flat lines while Spain's IBEX (+0.7%) outperforms, fighting to stay above its November low. The U.K.'s inflation report for October showed a slight deceleration in the yr/yr rate to 2.1% from 2.2% while Core PPI remained at 2.4%. Still, expectations for a December rate cut from the Bank of England increased slightly. FT reported that the British government is preparing to sell British Steel after rescuing the company from insolvency in 2019. The Central Bank of Iceland lowered its policy rate by 25 basis points to 7.25%.

• In economic data:
  • Eurozone's October CPI 0.2% m/m, as expected (last 0.1%); 2.1% yr/yr, as expected (last 2.2%). October Core CPI 0.3% m/m, as expected (last 0.1%); 2.4% yr/yr, as expected (last 2.4%). Q3 Labor Cost Index 3.5% yr/yr (last 3.6%). September Current Account surplus EUR23.1 bln (expected surplus of EUR15.9 bln; last surplus of EUR22.2 bln)
  • U.K.'s October CPI 0.4% m/m, as expected (last 0.0%); 3.6% yr/yr (expected 3.5%; last 3.8%). October Core CPI 0.3% m/m (expected 0.4%; last 0.0%); 3.4% yr/yr, as expected (last 3.5%). October Input PPI -0.3% m/m (expected 0.0%; last -0.1%); 0.5% yr/yr (expected 0.7%; last 0.7%) and Output PPI 0.0% m/m (expected 0.1%; last 0.0%); 3.6% yr/yr (last 3.5%). October House Price Index 2.6% yr/yr (expected 3.0%; last 3.0%)

---Equity Markets---

• STOXX Europe 600: +0.3%
• Germany's DAX: +0.4%
• U.K.'s FTSE 100: -0.2%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: -0.1%
• Spain's IBEX 35: +0.7%