Stock Market Update

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

Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note with South Korea's Kospi (+1.6%) and Japan's Nikkei (+0.7%) closing at fresh records. Japan's May exports grew at their fastest pace in more than three years. China's annual forum on national financial issues started today and will continue tomorrow. People's Bank of China Governor Pan said that China's low-yield environment will be addressed through adjusting overnight reverse repurchase operations. Reserve Bank of Australia Assistant Governor Jones said that the country's financial system needs to be prepared for potential shocks.

• In economic data:
  • Japan's May trade deficit JPY90 bln (expected deficit of JPY210 bln; last deficit of JPY200 bln). May Imports 12.5% yr/yr (expected 12.8%; last 9.8%) and Exports 17.0% yr/yr (expected 16.2%; last 14.8%). June Reuters Tankan Index 13 (last 8). April Core Machinery Orders 8.7% m/m (expected 1.2%; last 9.8%); 15.6% yr/yr (expected 9.3%; last 5.9%)
  • Australia's May MI Leading Index 0.0% m/m (last 0.1%)
  • New Zealand's Q1 Current Account deficit 3.6% of GDP (prior deficit 3.7% of GDP). Q2 Westpac Consumer Sentiment 80.4 (last 94.7)
  • Singapore's May trade surplus SGD5.57 bln (last surplus of SGD13.13 bln). May non-oil exports 7.7% yr/yr (last 11.0%); 38.4% yr/yr (expected 30.0%; last 24.4%)

---Equity Markets---

• Japan's Nikkei: +0.7%
• Hong Kong's Hang Seng: -0.8%
• China's Shanghai Composite: +0.4%
• India's Sensex: +0.5%
• South Korea's Kospi: +1.6%
• Australia's ASX All Ordinaries: +0.6%

Major European indices trade mostly higher. The Bank of France lowered its domestic growth forecast for 2026 to 0.5% from 0.9%. Elsewhere, the London Times Shadow monetary policy committee voted 5-4 in favor of a rate hike from the Bank of England tomorrow, but the market does not see a high likelihood of a hike. BMW lowered its profit outlook for the year.

• In economic data:
  • Eurozone's final May CPI 0.1% m/m, as expected (last 1.0%); 3.2% yr/yr, as expected (last 3.0%). May Core CPI 0.3% m/m, as expected (last 0.9%); 2.6% yr/yr (expected 2.5%: last 2.2%)
  • U.K.'s May CPI 0.2% m/m (expected 0.4%; last 0.7%); 2.8% yr/yr (expected 3.0%; last 2.8%). May Core CPI 0.3% m/m (expected 0.4%; last 0.7%); 2.6% yr/yr (expected 2.7%; last 2.5%). May Input PPI 0.2% m/m (expected 0.5%; last 2.6%) and Output PPI 0.5% m/m, as expected (last 1.5%). May House Price Index 3.8% yr/yr (expected 2.8%; last 0.0%)

---Equity Markets---

• STOXX Europe 600: +0.4%
• Germany's DAX: -0.1%
• U.K.'s FTSE 100: -0.1%
• France's CAC 40: +0.3%
• Italy's FTSE MIB: +0.1%
• Spain's IBEX 35: +0.7%