Stock Market Update

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

Equity indices in the Asia-Pacific region ended the week on a mixed note with Japan's Nikkei (+2.5%) and South Korea's Kospi (+3.6%) reaching fresh records. Japan's Tokyo CPI decelerated in May despite higher energy prices. Japan's Finance Minister Katayama warned that a currency intervention is possible at any time with the yen back near this year's low against the dollar in the 160 area. The People's Bank of China called on banks to increase lending amid ongoing weakness in credit issuance.

• In economic data:
  • Japan's May Tokyo CPI 1.4% yr/yr (last 1.5%) and Tokyo Core CPI 1.3% yr/yr (expected 1.5%; last 1.5%). April Industrial Production 0.8% m/m (expected -0.4%; last -0.4%), April Retail Sales 2.1% yr/yr (expected 1.4%; last 1.4%), April jobs/applications ratio 1.18, as expected (last 1.18), and April Unemployment Rate 2.5% (expected 2.7%; last 2.7%). April Housing Starts 11.4% yr/yr (expected 14.7%; last -29.3%) and Construction Orders -32.3% yr/yr (last -14.4%). May Household Confidence 33.6 (expected 32.3; last 32.2)
  • South Korea's April Retail Sales -3.6% m/m (last 1.9%), April Industrial Production -0.7% m/m (expected 0.3%; last 0.6%); 1.5% yr/yr (expected 2.2%; last 3.9%). April Service Sector Output -1.0% m/m (last 1.5%)
  • Singapore's April Bank Lending SGD908.4 bln (last SGD902.3 bln)

---Equity Markets---

• Japan's Nikkei: +2.5%
• Hong Kong's Hang Seng: +0.7% 
• China's Shanghai Composite: -0.7% 
• India's Sensex: -1.4% 
• South Korea's Kospi: +3.6% 
• Australia's ASX All Ordinaries: +1.7% 

Major European indices are tracking a higher finish to the week. U.K.'s Andy Burnham, who could become the next prime minister, said that there should be more state involvement in the economy. Bank of England Governor Bailey said that rate cuts should not be expected at this time and that policy has been tightened sufficiently. Germany's flash CPI report for May will be released at 8:00 ET and is expected to show a month-over-month increase of 0.1%, keeping the year-over-year growth rate at 2.9% that was reported in April.

• In economic data:
  • Germany's May Unemployment Change -12,000 (expected 11,000; last 20,000) and May Unemployment Rate 6.3% (expected 6.4%; last 6.4%). April Import Price Index 1.2% m/m, as expected (last 3.6%); 5.3% yr/yr, as expected (last 2.3%)
  • France's Q1 GDP -0.1% qtr/qtr (expected 0.0%; last 0.2%); 0.9% yr/yr (expected 1.1%; last 1.3%). May CPI 0.1% m/m (expected 0.2%; last 1.0%); 2.4% yr/yr (expected 2.5%; last 2.2%). April Consumer Spending -0.5% m/m (expected -0.1%; last 0.9%). Q1 nonfarm payrolls 0.0% qtr/qtr (expected -0.1%; last -0.1%)
  • Italy's May CPI 0.4% m/m (expected 0.1%; last 1.1%); 3.2% yr/yr, as expected (last 2.7%). Q1 GDP 0.3% qtr/qtr (expected 0.2%; last 0.3%); 0.8% yr/yr (expected 0.7%; last 0.8%). April Unemployment Rate 5.1% (expected 5.3%; last 5.2%)
  • Spain's May CPI 0.1% m/m (expected 0.2%; last 0.4%); 3.2% yr/yr (expected 3.3%; last 3.2%). May Core CPI 2.9% yr/yr (last 2.8%). March Current Account surplus EUR4.61 bln (last surplus of EUR4.04 bln)
  • Swiss May KOF Leading Indicators 98.0, as expected (last 97.8)

---Equity Markets---

• STOXX Europe 600: +0.5%
• Germany's DAX: +0.1% 
• U.K.'s FTSE 100: +0.3%
• France's CAC 40: +0.6%
• Italy's FTSE MIB: +0.7% 
• Spain's IBEX 35: +0.7%