Stock Market Update

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

Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note. Japan held a weak 40-yr bond auction, but the auction did not fail, which was seen as a positive given the recent pressure on the long end. Japan is reportedly willing to commit to buying JPY1 trln worth of chips as part of a potential trade deal with the U.S. The Reserve Bank of New Zealand lowered its official cash rate by 25 basis points to 3.25%, as expected, though the policy statement had some hints of hawkishness.

• In economic data:
  • South Korea's May Manufacturing BSI Index 73 (last 68)
  • Australia's Q1 Construction Work Done 0.0% qtr/qtr (expected 0.5%; last 0.9%). April CPI Indicator 2.4% yr/yr (expected 2.3%; last 2.4%)

---Equity Markets---

• Japan's Nikkei: UNCH
• Hong Kong's Hang Seng: -0.5% 
• China's Shanghai Composite: UNCH
• India's Sensex: -0.3%
• South Korea's Kospi: +1.3%
• Australia's ASX All Ordinaries: -0.1%

Major European indices trade on a mostly lower note. Germany's unemployment showed a larger-than-expected increase in May, though the unemployment rate remained at 6.3%. France reported weaker-than-expected consumer spending for April. There was speculation that European Central Bank President Lagarde could leave her post about a year before the end of her term to become the chair of the World Economic Forum. The European Commission is urging member states to reduce their water use by 10% by 2030, according to FT.

• In economic data:
  • Germany's May Unemployment Change 34,000 (expected 12,000; last 4,000) and Unemployment Rate 6.3%, as expected (last 6.3%). April Import Price Index -1.7% m/m (expected -1.4%; last -1.0%); -0.4% yr/yr (expected 0.1%; last 2.1%)
  • France's Q1 GDP 0.1% qtr/qtr, as expected (last -0.1%); 0.6% yr/yr (expected 0.8%; last 0.6%). Q1 Nonfarm Payrolls -0.1% qtr/qtr (expected 0.0%; last -0.4%). April Consumer Spending 0.3% m/m (expected 0.8%; last -1.1%). April PPI -4.3% m/m (last -0.5%); -0.8% yr/yr (last -0.2%)
  • Swiss May ZEW Expectations -22.0 (last -51.6)

---Equity Markets---

• STOXX Europe 600: -0.4%
• Germany's DAX: -0.6%
• U.K.'s FTSE 100: -0.1% 
• France's CAC 40: -0.2%
• Italy's FTSE MIB: +0.2%
• Spain's IBEX 35: -1.0%