Stock Market Update

The S&P 500 futures currently trade 59 points above fair value. 

Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. The People's Bank of China injected some liquidity through reverse repurchases. China Securities Times speculated that the need for reserve requirement ratio cuts is lower due to proactive fiscal policy. Japan is planning record defense spending of JPY9 trln for 2026. Australia reduced its borrowing forecast for 2026 by AUD25 bln due to an improved surplus forecast. New Zealand's Q3 GDP expanded at its fastest pace in three years after a brief contraction in Q2.

• In economic data:
  • Australia's December MI Inflation Expectations 4.7% (last 4.5%)
  • New Zealand's Q3 GDP 1.1% qtr/qtr (expected 0.9%; last -1.0%); 1.3% yr/yr, as expected (last -1.1%)

---Equity Markets---

• Japan's Nikkei: -1.0%
• Hong Kong's Hang Seng: +0.1%
• China's Shanghai Composite: +0.2%
• India's Sensex: -0.1% 
• South Korea's Kospi: -1.5%
• Australia's ASX All Ordinaries: UNCH

Major European indices trade mostly higher. The Bank of England voted 5-4 to lower its bank rate by 25 basis points to 3.75% while central banks in Norway and Sweden did not make any policy changes. EU officials are meeting in Brussels to discuss a potential seizure of frozen Russian assets, but several countries remain opposed to this action. Germany is planning record debt issuance of EUR512 bln for 2026. The European Central Bank will release its latest policy statement at 8:15 ET, but the market does not expect any headline changes.

• In economic data:
  • Eurozone's October Construction Output 0.88% m/m (last -0.58%)
  • France's December Business Survey 102 (expected 98; last 98)
  • Swiss November trade surplus CHF3.841 bln (expected surplus of CHF5.32 bln; last surplus of CHF4.203 bln)

---Equity Markets---

• STOXX Europe 600: +0.4%
• Germany's DAX: +0.5%
• U.K.'s FTSE 100: -0.2%
• France's CAC 40: +0.3%
• Italy's FTSE MIB: +0.6%
• Spain's IBEX 35: +0.9%