Stock Market Update

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

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note with South Korea's Kospi (+1.5%) showing strength on expectations for new stimulus from the incoming president. Japanese government debt climbed with the long end leading the way despite soft demand for new 30-yr paper. Suzuki has had to pause production of one of its vehicles after China imposed restrictions on sales of rare earth elements. A massive iron deposit was discovered in West Australia with the value estimated around $6 trillion.

• In economic data:
  • China's May Caixin Services PMI 51.1 (expected 51.0; last 50.7)
  • Japan's April Overall Wage Income 2.3% yr/yr (expected 2.6%; last 2.3%)
  • South Korea's Q1 GDP -0.2% qtr/qtr, as expected (last -0.2%); 0.0% yr/yr (expected -0.1%; last 1.2%)
  • Singapore's April Retail Sales 0.3% m/m (last -2.7%); 0.3% yr/yr (last 1.3%)
  • Australia's April trade surplus AUD5.41 bln (expected surplus of AUD5.96 bln; last surplus of AUD6.89 bln). April Imports 1.1% m/m (last -2.4%) and Exports -2.4% m/m (last 7.2%)

---Equity Markets---

• Japan's Nikkei: -0.5%
• Hong Kong's Hang Seng: +1.1%
• China's Shanghai Composite: +0.2%
• India's Sensex: +0.6%
• South Korea's Kospi: +1.5%
• Australia's ASX All Ordinaries: UNCH

Major European indices trade higher after the European Central Bank announced a 25-basis point rate cut, which was expected. This was the eighth cut over the past year with the market speculating that ECB President Lagarde could hint at a pause in the cutting cycle during her post-decision press conference. EU Trade Commissioner Sefcovic said that the World Trade Organization is in need of deep reform. The Bank of England's Decision Maker Panel survey for May found little impact from U.S. trade policy.

• In economic data:
  • Eurozone's April PPI -2.2% m/m (expected -1.8%; last -1.7%); 0.7% yr/yr (expected 1.2%; last 1.9%)
  • Germany's April Factory Orders 0.6% m/m (expected -1.5%; last 3.4%)
  • Italy's April Retail Sales 0.7% m/m (expected 0.4%; last -0.4%); 3.7% yr/yr (last -2.7%)
  • Swiss May Unemployment Rate 2.9% (expected 2.8%; last 2.8%)

---Equity Markets---

• STOXX Europe 600: +0.3%
• Germany's DAX: +0.8%
• U.K.'s FTSE 100: +0.3%
• France's CAC 40: +0.4%
• Italy's FTSE MIB: +0.5%
• Spain's IBEX 35: +0.3%