Stock Market Update

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

Equity indices in the Asia-Pacific region ended the week on a broadly higher note, encouraged by Thursday's rebound on Wall Street. President Trump said that the U.S. made "a great settlement" with Iran while Israel's Prime Minister Netanyahu said that Israel is not a party to the U.S.-Iran agreement. The Bank of Japan is expected to announce its next rate hike next week while the Reserve Bank of Australia is expected to announce a policy hold. Elsewhere, Bank of Korea Governor Shin said that interest rates need to be raised "before it is too late."

• In economic data:
  • China's May New Loans CNY520.0 bln (expected CNY450.0 bln; last -CNY10.0 bln), May Outstanding Loan Growth 5.5% yr/yr, as expected (last 5.6%), and May total social financing CNY2.03 trln (expected CNY1.87 trln; last CNY620.0 bln)
  • Japan's April Industrial Production 0.5% m/m (expected 0.8%; last -0.4%) and Capacity Utilization -0.8% m/m (last -1.2%)
  • New Zealand's May Business PMI 49.9 (last 50.4)
  • India's May CPI 3.93% yr/yr (expected 4.0%; last 3.5%)

---Equity Markets---

• Japan's Nikkei: +2.8%
• Hong Kong's Hang Seng: +1.9% 
• China's Shanghai Composite: +1.1% 
• India's Sensex: +2.3% 
• South Korea's Kospi: +4.6% 
• Australia's ASX All Ordinaries: +1.9%

Major European indices are seeking a higher finish to the week, encouraged by news of a memorandum of understanding between the U.S. and Iran that is expected to result in a final peace deal. The U.K. reported weak GDP growth for April, resulting in some pressure on rate expectations. The market expects the European Central Bank to hold its policy steady in July unless there is a renewed rise in energy prices. Germany's Economic Ministry noted that momentum in the domestic economy slowed notably in Q2.

• In economic data:
  • Germany's final May CPI -0.2% m/m, as expected (last 0.6%); 2.6% yr/yr, as expected (last 2.9%)
  • U.K.'s April GDP -0.1% m/m, as expected (last 0.3%); 1.2% yr/yr (expected 1.3%; prior 1.2%). April Manufacturing Production 0.4% m/m (expected -0.2%; last 1.2%), April trade deficit GBP26.05 bln (expected deficit of GBP22.50 bln; last deficit of GBP27.22 bln), April Industrial Production 0.0% m/m (expected 0.1%; last -0.2%); -0.2% yr/yr (expected -0.1%; last 0.0%). April Manufacturing Production 0.4% m/m (expected -0.2%; last 1.2%); 1.0% yr/yr (expected 0.4%; last 1.2%)
  • France's final May CPI 0.1% m/m, as expected (last 1.0%); 2.4% yr/yr, as expected (last 2.2%)
  • Spain's May CPI 0.1% m/m, as expected (last 0.4%); 3.2% yr/yr, as expected (last 3.2%). May Core CPI 3.0% yr/yr (expected 2.9%; last 2.8%)

---Equity Markets---

• STOXX Europe 600: +1.0% 
• Germany's DAX: +1.1% 
• U.K.'s FTSE 100: +0.9%
• France's CAC 40: +1.4% 
• Italy's FTSE MIB: +1.4% 
• Spain's IBEX 35: +1.7%