Stock Market Update

The S&P 500 futures currently trade 18 points below fair value. 

Equity indices in the Asia-Pacific region enjoyed a generally higher finish to the week with South Korea's Kospi (+0.8%) continuing its record run. Japan's Lower House was dissolved ahead of a snap election on February 8. New Zealand's Q4 CPI was hotter than expected, but it did not invite hawkish commentary from Reserve Bank of New Zealand Governor Breman. The Bank of Japan left its policy rate at 0.75%, which was expected. One policymaker dissented, voting for a rate hike. Malaysia's central bank also left its policy rate unchanged (2.75%).

• In economic data:
  • Japan's December National CPI -0.1% m/m (last 0.3%); 2.1% yr/yr (last 2.9%). National Core CPI 2.4% yr/yr, as expected (last 3.0%). Flash January Manufacturing PMI 51.5 (expected 50.1; last 50.0) and flash Services PMI 53.4 (last 51.6)
  • South Korea's January Consumer Confidence 110.8 (last 109.9)
  • Singapore's December CPI 0.3% m/m (last 0.2%); 1.2% yr/yr, as expected (last 1.2%). December Core CPI 1.2% yr/yr (last 1.2%). Q4 URA Property Index 0.6% qtr/qtr (expected 0.7%; last 0.9%)
  • India's flash January Manufacturing PMI 56.8 (last 55.0) and flash Services PMI 59.3 (last 58.0)
  • Australia's flash January Manufacturing PMI 52.4 (last 51.6) and flash Services PMI 56.0 (last 51.1)
  • New Zealand's Q4 CPI 0.6% qtr/qtr (expected 0.5%; last 1.0%); 3.1% yr/yr (expected 3.0%; last 3.0%)

---Equity Markets---

• Japan's Nikkei: +0.3%
• Hong Kong's Hang Seng: +0.5% 
• China's Shanghai Composite: +0.3%
• India's Sensex: -0.9% 
• South Korea's Kospi: +0.8% 
• Australia's ASX All Ordinaries: +0.2%

Major European indices are on course for a mostly lower finish to the week. Flash January Manufacturing PMI readings from the region beat expectations, though the eurozone-wide reading (49.4) remained in contraction. British retail sales were much stronger than expected in December, which will keep the market guessing about the timing of the next rate cut from the Bank of England. Bank of England policymaker Greene said that there is a case to be made for moving the bank rate in the opposite direction from the fed funds rate since looser Fed policy would increase British inflation.

• In economic data:
  • Eurozone's flash January Manufacturing PMI 49.4 (expected 49.1; last 48.8) and flash Services PMI 51.9 (expected 52.6; last 52.4)
  • Germany's flash January Manufacturing PMI 48.7 (expected 47.8; last 47.0) and flash Services PMI 53.3 (expected 52.6; last 52.7)
  • U.K.'s December Retail Sales 0.4% m/m (expected 0.0%; last -0.1%); 2.5% yr/yr (expected 1.0%; last 1.8%). December Core Retail Sales 0.3% m/m (expected -0.2%; last -0.4%); 3.1% yr/yr (expected 1.4%; last 2.6%). Flash January Manufacturing PMI 51.6 (expected 50.6; last 50.6) and flash Services PMI 54.3 (expected 51.7; last 51.4)
  • France's flash January Manufacturing PMI 51.0 (expected 50.4; last 50.7) and flash Services PMI 47.9 (expected 50.3; last 50.1)

---Equity Markets---

• STOXX Europe 600: -0.2% 
• Germany's DAX: -0.1%
• U.K.'s FTSE 100:  UNCH 
• France's CAC 40: -0.3% 
• Italy's FTSE MIB: -0.8% 
• Spain's IBEX 35: -0.7%