Stock Market Update

The stock market is still poised for a higher start as S&P 500 futures trade 20 points above fair value.

Equity indices in the Asia-Pacific region ended Monday on a mostly higher note. China's Manufacturing PMI (49.7) remained in contraction for the third consecutive month. The People's Bank of China will reportedly signal reduced urgency to cut the reserve requirement ratio. Nikkei reported that President Trump is determined to maintain the 25% tariff on auto imports from Japan. South Korea's President Lee is expected to visit the U.S. in late July.

• In economic data:
  • China's June Manufacturing PMI 49.7 (expected 49.6; last 49.5) and Non-Manufacturing PMI 50.5 (expected 50.3; last 50.3)
  • Japan's May Housing Starts -34.4% yr/yr (expected -15.0%; last -26.6%) and Construction Orders 14.0% yr/yr (last 52.7%)
  • South Korea's May Industrial Production -2.9% m/m (expected -0.1%; last -0.6%); 0.2% yr/yr (expected 2.6%; last 5.1%). May Retail Sales 0.0% m/m (expected- 0.1%; last -0.9%)
  • India's May Industrial Production 1.2% yr/yr (expected 2.4%; last 2.7%) and May Manufacturing Output 2.6% m/m (last 3.4%)
  • Australia's June MI Inflation Gauge 0.1% m/m (last -0.4%). May Private Sector Credit 0.5% m/m (expected 0.7%; last 0.7%) and May Housing Credit 0.5% m/m (last 0.5%)
  • New Zealand's June ANZ Business Confidence 46.3 (last 36.6)

---Equity Markets---

• Japan's Nikkei: +0.8%
• Hong Kong's Hang Seng: -0.9%
• China's Shanghai Composite: +0.6%
• India's Sensex: -0.5%
• South Korea's Kospi: +0.5%
• Australia's ASX All Ordinaries: +0.3%

Major European indices trade near their flat lines. FT reported that major European ports are experiencing highest congestion since the coronavirus pandemic due to low river levels and the impact of tariffs. There is some ongoing hope for an EU-U.S. trade deal to be reached by July 9. European Central Bank policymaker de Guindos said that growth in Q2 and Q3 is expected to be almost flat due to weak consumption.

• In economic data:
  • Eurozone's May Import Price Index -0.7% m/m (expected -0.3%; last -1.7%); -1.1% yr/yr (expected -0.8%; last -0.4%). May Retail Sales -1.6% m/m (expected 0.5%; last -0.6%); 1.6% yr/yr (expected 3.3%; last 4.6%)
  • U.K.'s Q1 GDP 0.7% qtr/qtr, as expected (last 0.1%); 1.3% yr/yr, as expected (last 1.5%). Q1 Business Investment 3.9% qtr/qtr (expected 5.9%; last -1.9%); 6.1% yr/yr (expected 8.1%; last 1.8%). Q1 Current Account deficit GBP23.5 bln (expected deficit of GBP19.7 bln; last deficit of GBP21.0 bln). May Mortgage Lending GBP2.05 bln (expected GBP2.50 bln; last -GBP780 mln)
  • Italy's Q1 Public Deficit 8.5% (last -0.3%). June CPI 0.2% m/m (expected 0.1%; last -0.1%); 1.7% yr/yr, as expected (last 1.6%). Non-EU trade surplus EUR5.26 bln (last surplus of EUR2.32 bln)
  • Spain's April Current Account surplus EUR1.36 bln (last surplus of EUR1.42 bln)
  • Swiss June KOF Leading Indicators 96.1 (expected 99.3; last 98.6)

---Equity Markets---

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