Stock Market Update

The S&P 500 futures trade nine points below fair value.

Equity indices in the Asia-Pacific region retreated on Thursday after a poor finish on Wall Street. Japan's Finance Minister Kato said that U.S. Treasury Secretary Bessent agreed that foreign exchange levels should be determined by the market, suggesting that currencies will not be part of trade negotiations with Japan. More than half of Japanese companies reportedly want the Bank of Japan to pause its tightening campaign due to tariffs. Standard & Poor's warned that New Zealand is at a risk of a downgrade due to high deficits.

• In economic data:
  • Japan's flash May Manufacturing PMI 49.0, as expected (last 48.7) and flash Services PMI 50.8 (last 52.4). March Core Machinery Orders 13.0% m/m (expected -1.5%; last 4.3%); 8.4% yr/yr (expected -2.2%; last 1.5%)
  • Singapore's Q1 GDP -0.6% qtr/qtr (expected -0.8%; last 0.5%); 3.9% yr/yr (expected 3.8%; last 5.0%)
  • India's flash May Manufacturing PMI 58.3 (expected 58.0; last 58.2) and flash Services PMI 61.2 (expected 58.3; last 58.7)
  • Hong Kong's April CPI -0.1% m/m (last 0.0%); 2.0% yr/yr (expected 1.4%; last 1.4%)
  • Australia's flash May Manufacturing PMI 51.7 (last 51.7) and flash Services PMI 50.5 (last 51.0)

---Equity Markets---

• Japan's Nikkei: -0.8%
• Hong Kong's Hang Seng: -1.2%
• China's Shanghai Composite: -0.2%
• India's Sensex: -0.8%
• South Korea's Kospi: -1.2%
• Australia's ASX All Ordinaries: -0.5%

Major European indices trade in the red amid weak sentiment after yesterday's jump in longer-term U.S. Treasury yields. Adding to the negative mood, flash PMI data for May showed a deepening contraction in eurozone's manufacturing sector and an unexpected contraction in services. Germany's ifo Business Climate survey for May (87.5; expected 87.4) came in just ahead of expectations with ifo economists noting that first signs of recovery are being seen. France's Europe Minister Haddad urged the EU to radically cut red tape and unify its single market to enhance competitiveness.

• In economic data:
  • Eurozone's flash May Manufacturing PMI 48.4 (expected 49.2; last 49.0) and flash Services PMI 48.9 (expected 50.4; last 50.1)
  • Germany's flash May Manufacturing PMI 48.8, as expected (last 48.4) and flash Services PMI 47.2 (expected 49.6; last 49.0). May ifo Business Climate Index 87.5 (expected 87.4; last 86.9). May Current Assessment 86.1 (expected 86.8; last 86.4) and Business Expectations 88.9 (expected 88.0; last 87.4)
  • U.K.'s flash May Manufacturing PMI 45.1 (expected 46.2; last 45.4) and flash Services PMI 50.2 (expected 50.0; last 49.0). April Public Sector Net Borrowing GBP20.16 bln (expected GBP18.00 bln; last GBP14.14 bln). May CBI Industrial Trends Orders -30 (expected -24; last -26)
  • France's May Business Survey 97 (expected 99; last 100). Flash May Manufacturing PMI 49.5 (expected 48.9; last 48.7) and flash Services PMI 47.4 (expected 47.7; last 47.3)

---Equity Markets---

• STOXX Europe 600: -1.0%
• Germany's DAX: -0.8%
• U.K.'s FTSE 100: -0.8%
• France's CAC 40: -1.1%
• Italy's FTSE MIB: -0.9%
• Spain's IBEX 35: -0.8%