Stock Market Update

The S&P 500 futures currently trade one point below fair value.

Equity indices in the Asia-Pacific region had a mostly higher finish to the week. JGBs faced more pressure with yields on the 20-yr and shorter tenors hitting fresh highs for the year even though the Household Spending report for October (-3.5% m/m; expected 0.7%) showed a sharp unexpected drop in spending. The report had little impact on the market's rate hike expectations. In addition, there was press speculation that a December hike from the Bank of Japan could be followed by more rate hikes next year. State-owned banks in China are reportedly purchasing dollars at their fastest pace in 14 months to counter recent yuan strength. The Reserve Bank of India left its policy rate at 5.25%, as expected.

• In economic data:
  • Japan's October Household Spending -3.5% m/m (expected 0.7%; last -0.7%); -3.0% yr/yr (expected 1.1%; last 1.8%). October Leading Index 110.0 (expected 109.3; last 108.6) and Coincident Indicator 0.5% m/m (expected 1.8%; last 1.7%)
  • South Korea's October Current Account surplus $6.81 bln (last surplus of $13.47 bln)
  • Singapore's October Retail Sales 2.3% m/m (last -1.7%); 4.5% yr/yr (last 2.7%)

---Equity Markets---

• Japan's Nikkei: -1.1% 
• Hong Kong's Hang Seng: +0.6%
• China's Shanghai Composite: +0.7%
• India's Sensex: +0.5%
• South Korea's Kospi: +1.8%
• Australia's ASX All Ordinaries: +0.2%

Major European indices trade in the green after the release of slightly better-than-expected growth and employment figures for Q3. French President Macron said that he is looking to eliminate trade restrictions between France and China. German Chancellor Merz is struggling to convince his coalition members to support a pension bill that has faced heavy opposition.

• In economic data:
  • Eurozone's Q3 GDP 0.3% qtr/qtr (expected 0.2%; last 0.1%); 1.4% yr/yr, as expected (last 1.5%). Q3 Employment Change 0.2% qtr/qtr (expected 0.1%; last 0.1%); 0.6% yr/yr (expected 0.5%; last 0.7%)
  • Germany's October Factory Orders 1.5% m/m (expected 0.3%; last 2.0%)
  • U.K.'s November Halifax House Price Index 0.0% m/m (expected 0.2%; last 0.5%); 0.7% yr/yr (last 1.9%)
  • France's October Industrial Production 0.2% m/m (expected -0.1%; last 0.7%). October trade deficit EUR3.9 bln (expected deficit of EUR6.8 bln; last deficit of EUR6.4 bln). October Current Account surplus EUR1.10 bln (last deficit of EUR1.60 bln)
  • Italy's October Retail Sales 0.5% m/m (expected 0.4%; last -0.4%); 1.3% yr/yr (last 0.7%)
  • Spain's October Industrial Production 1.2% yr/yr (last 1.5%)

---Equity Markets---

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