Stock Market Update

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

Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note while markets in India were closed for a holiday. Overall investor sentiment was dampened by reports of U.S. strikes on Iranian targets. Japan's extra budget bill will be sent to the parliament next week. The Bank of Korea left its policy rate at 2.50%, as expected, though a couple of rate hikes are being planned for the next six months.

• In economic data:
  • Hong Kong's April trade deficit HKD29.5 bln (last deficit of HKD89.1 bln). April Imports 44.4% m/m (last 41.2%) and Exports 42.9% m/m (last 35.8%)
  • Australia's Q1 Building Capital Expenditure -3.8% qtr/qtr (last 2.5%), Q1 Private New Capital Expenditure 6.5% qtr/qtr (expected 1.2%; last 0.7%, and Q1 Plant/Machinery Capital Expenditure 18.1% qtr/qtr (last -1.3%)
  • New Zealand's January Budget deficit NZD9.31 bln (last deficit of NZD14.80 bln)

---Equity Markets---

• Japan's Nikkei: -0.5%
• Hong Kong's Hang Seng: -1.3%
• China's Shanghai Composite: +0.1%
• India's Sensex: CLOSED
• South Korea's Kospi: -0.5%
• Australia's ASX All Ordinaries: -1.4%

Major European indices trade mostly lower amid some concerns about the lasting power of the U.S.-Iran ceasefire. European Central Bank Chief Economist Lane said that secondary effects of inflation will be visible for a while even if the energy shock starts to recede, contributing to the market's view that a rate hike will be announced in June. The EU is looking to tighten limits on duty-free steel imports from China.

• In economic data:
  • Eurozone's May Business and Consumer Survey 93.5 (expected 92.8; last 93.2)
  • France's April PPI -2.1% m/m (last 1.9%); 2.1% yr/yr (last 0.0%)
  • Italy's May Business Confidence 87.9 (expected 87.5; last 87.9) and Consumer Confidence 93.4 (expected 90.1; last 90.8). April PPI 0.3% m/m (last 4.4%); 6.8% yr/yr (last 4.2%)
  • Spain's April Retail Sales 0.8% yr/yr (last 4.1%)

---Equity Markets---

• STOXX Europe 600: -0.6%
• Germany's DAX: -0.6%
• U.K.'s FTSE 100: -0.8%
• France's CAC 40: -0.5%
• Italy's FTSE MIB: +0.3%
• Spain's IBEX 35: -0.5%