Stock Market Update

The S&P 500 futures trade 20 points below fair value.

Equity indices in the Asia-Pacific region began the week on a mostly lower note while markets in China and New Zealand were closed for holidays. Steelmakers faced pressure after President Trump shared a plan to double the tariff on steel imports to 50%, starting Wednesday. The Wall Street Journal reported on Friday that the trade détente between the U.S. and China is being jeopardized by a disagreement over access to rare earth elements. China's Manufacturing PMI (49.5) remained in contraction for the second month in a row. Japan's top trade negotiator said that an agreement was made with representatives from the U.S. to accelerate talks.

• In economic data:
  • China's May Manufacturing PMI 49.5, as expected (last 49.0) and Non-Manufacturing PMI 50.3 (expected 50.6; last 50.4)
  • Japan's Q1 Capital Spending 6.4% yr/yr (expected 3.8%; last -0.2%). May Manufacturing PMI 49.4 (expected 49.0; last 48.7)
  • Hong Kong's April Retail Sales -2.3% yr/yr (last -3.5%)
  • South Korea's May trade surplus $6.94 bln (expected surplus of $4.61 bln; last surplus of $4.88 bln). May Imports -5.3% yr/yr (expected -3.1%; last -2.7%) and Exports -1.3% yr/yr (expected -2.7%; last 3.7%). May Manufacturing PMI 47.7 (last 47.5)
  • India's May Manufacturing PMI 57.6 (expected 58.3; last 58.2)
  • Australia's May Manufacturing PMI 51.0 (expected 51.7; last 51.7). May ANZ Job Advertisements -1.2% m/m (last -0.3%) and May MI Inflation Gauge -0.4% m/m (last 0.6%). May Commodity Prices -7.7% yr/yr (last -7.1%)

---Equity Markets---

• Japan's Nikkei: -1.3%
• Hong Kong's Hang Seng: -0.6%
• China's Shanghai Composite: HOLIDAY
• India's Sensex: -0.1%
• South Korea's Kospi: +0.1%
• Australia's ASX All Ordinaries: -0.3%

Major European indices trade mostly lower amid some pressure on overall sentiment after President Trump announced a doubling of a tariff on steel imports. Final May Manufacturing PMI readings from the region were mixed relative to estimates with the eurozone reading (49.4; expected 48.4; prior 49.0) pointing to an ongoing contraction. The European Central Bank is expected to announce a rate cut at the conclusion of its meeting on Thursday.

• In economic data:
  • Eurozone's May Manufacturing PMI 49.4 (expected 48.4; last 49.0)
  • Germany's May Manufacturing PMI 48.3 (expected 48.8; last 48.4)
  • U.K.'s May Nationwide HPI 0.5% m/m (expected 0.0%; last -0.6%); 3.5% yr/yr (expected 2.9%; last 3.4%). May Manufacturing PMI 46.4 (expected 45.1; last 45.4). April BoE Consumer Credit GBP1.58 bln (expected GBP1.10 bln; last GBP1.10 bln) and April Mortgage Lending -GBP760 mln (expected -GBP500 mln; prior GBP12.96 bln)
  • France's May Manufacturing PMI 49.8 (expected 49.5; last 48.7)
  • Italy's May Manufacturing PMI 49.2 (expected 49.5; last 49.3)
  • Spain's May Manufacturing PMI 50.5 (expected 48.3; last 48.1)
  • Swiss Q1 GDP 0.5% qtr/qtr (expected 0.4%; last 0.3%); 2.0% yr/yr (expected 1.5%; last 1.6%). April Retail Sales 1.3% yr/yr (expected 2.5%; last 2.1%). May Manufacturing PMI 42.1 (expected 48.1; last 45.8)

---Equity Markets---

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.6%
• U.K.'s FTSE 100: UNCH
• France's CAC 40: -0.5%
• Italy's FTSE MIB: -0.3%
• Spain's IBEX 35: -0.1%