Stock Market Update

The S&P 500 futures currently trade one point above fair value.

Equity indices in the Asia-Pacific region had a mixed showing on Wednesday with Japan's Nikkei (-1.1%) dipping from record territory while South Korea's Kospi (+0.6%) reached a fresh record high ahead of tomorrow's release of preliminary quarterly results from Samsung Electronics. Baidu's chip unit is looking to raise up to $2 bln through its IPO. Automakers in China are reportedly cutting prices. South Korea's President Lee cautioned against an unnecessary confrontation with China, adding that the restoration of trust is most important. He also said that South Korea's relations with Japan are as important as those with China.

• In economic data:
  • China's December FX Reserves $3.358 trln (last $3.346 trln)
  • Japan's December Services PMI 51.6 (expected 52.5; last 53.2)
  • Australia's November Building Approvals 15.2% m/m (expected 1.9%; last -6.1%); 20.2% yr/yr (last -1.1%). November Private House Approvals 1.3% m/m (last -1.3%). November CPI Indicator 3.4% (expected 3.6%; last 3.8%)
  • India's 2025 GDP 7.4% (last 6.5%)

---Equity Markets---

• Japan's Nikkei: -1.1%
• Hong Kong's Hang Seng: -0.9%
• China's Shanghai Composite: +0.1%
• India's Sensex: -0.1%
• South Korea's Kospi: +0.6%
• Australia's ASX All Ordinaries: +0.2%

Major European indices trade on a mostly lower note while Germany's DAX (+0.7%) outperforms with industrials contributing to the show of relative strength. Luxury names in France are pressured amid some concern about the recent trade tensions between China and Japan. Shipping giant Maersk said that intra-Asia freight volumes have increased while traffic at Europe's major ports has been hampered by severe winter weather.

• In economic data:
  • Eurozone's flash December CPI 0.2% m/m (last -0.3%); 2.0% yr/yr, as expected (last 2.1%). Flash December Core CPI 0.3% m/m (last -0.3%); 2.3% yr/yr (expected 2.4%; last 2.4%)
  • Germany's November Retail Sales -0.6% m/m (expected 0.2%; last 0.3%); 1.1% yr/yr (last 2.1%). December Unemployment Change 3,000 (expected 5,000; last 1,000) and December Unemployment Rate 6.3%, as expected (last 6.3%)
  • U.K.'s Q3 Housing Equity Withdrawal -GBP10.9 bln (expected -GBP8.7 bln; last -GBP17.9 bln)
  • France's December Consumer Confidence 90, as expected (last 89)
  • Italy's December CPI 0.2% m/m, as expected (last 0.2%); 1.2% yr/yr (expected 1.1%, last 1.1%)

---Equity Markets---

• STOXX Europe 600: +0.1%
• Germany's DAX: +0.7%
• U.K.'s FTSE 100: -0.6%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: flat
• Spain's IBEX 35: -0.3%