Stock Market Update

The S&P 500 futures currently trade 50 points above fair value. 

Equity indices in the Asia-Pacific region climbed on Thursday with South Korea's Kospi (+0.9%) reaching another fresh record. Japan reported a smaller-than-expected trade surplus for December as imports grew more than expected while export growth undershot estimates. Australia reported strong employment figures for December with the Unemployment Rate unexpectedly falling to 4.1% from 4.3%, which boosted expectations for a rate hike in February. Expectations for a near-term rate hike from the Bank of Japan also increased. The BoJ will release its latest statement overnight, but a rate hike is not expected just yet.

• In economic data:
  • Japan's December trade surplus JPY105.7 bln (expected JPY357.0 bln; last JPY316.7 bln). December Imports 5.3% yr/yr (expected 3.6%; last 1.3%) and Exports 5.1% yr/yr (expected 6.1%; last 6.1%)
  • South Korea's Q4 GDP -0.3% qtr/qtr (expected 0.1%; last 1.3%); 1.5% yr/yr (expected 1.9%; last 1.8%)
  • Hong Kong's December CPI 0.3% m/m (last 0.0%); 1.4% yr/yr (last 1.2%)
  • Australia's December Employment Change 65,200 (expected 28,300; last -28,700) and full Employment Change 54,800 (last -65,300). December Unemployment Rate 4.1% (expected 4.4%; last 4.3%) and Participation Rate 66.7% (expected 66.8%; last 66.6%)
  • New Zealand's December Electronic Card Retail Sales -0.1% m/m (last 1.2%); -0.5% yr/yr (last 1.6%)

---Equity Markets---

• Japan's Nikkei: +1.7%
• Hong Kong's Hang Seng: +0.2%
• China's Shanghai Composite: +0.1%
• India's Sensex: +0.5%
• South Korea's Kospi: +0.9%
• Australia's ASX All Ordinaries: +0.7%

Major European indices trade in the green while regional sovereign debt is also on the rise. Automotive names are among the outperformers after Volkswagen and Michelin reported strong cash flow for 2025. German Chancellor Merz called for "significant" defense investment. Bundesbank expects only modest growth in the German economy in Q1.

• In economic data:
  • U.K.'s December Public Sector Net Borrowing GBP11.58 bln (expected GBP13.40 bln; last GBP10.49 bln). January CBI Distributive Trades Survey -17 (expected -35; last -44)

---Equity Markets---

• STOXX Europe 600: +1.0%
• Germany's DAX: +1.1%
• U.K.'s FTSE 100: +0.5%
• France's CAC 40: +1.1%
• Italy's FTSE MIB: +1.2%
• Spain's IBEX 35: +0.9%