Stock Market Update

The S&P 500 futures currently trade 10 points below fair value.

Equity indices in the Asia-Pacific region ended Thursday on a mixed note with South Korea's Kospi (-4.6%) facing renewed selling. Japanese debt outperformed after Finance Minister Katayama said that Japan will not rely on new debt issuance to make up for tax revenue shortfalls. There was also a solid 30-yr JGB auction. China's Ministry of Commerce will tighten restrictions on exports of drones to the U.S. Fitch opined that the Bank of Japan will have to continue hiking rates in order for the yen to continue its rise off a multi-decade low against the dollar.

• In economic data:
  • South Korea's June Current Account surplus $49.73 bln (last surplus of $38.61 bln)
  • Australia's June Building Approvals 7.2% m/m, as expected (last -1.6%); 8.9% yr/yr, as expected (last 5.5%). June trade surplus AUD1.929 bln (expected deficit of AUD1.060 bln; last deficit of AUD2.367 bln). June Imports -0.2% m/m (last 0.9%) and Exports 9.6% m/m (last -7.6%)

---Equity Markets---

• Japan's Nikkei: -0.9%
• Hong Kong's Hang Seng: -1.5%
• China's Shanghai Composite: +0.6%
• India's Sensex: +0.5%
• South Korea's Kospi: -4.6%
• Australia's ASX All Ordinaries: +0.5%

Major European indices trade mostly higher with Spain's IBEX (+1.1%) pacing the advance with leadership from banks and industrial names. The European Central Bank's latest economic bulletin acknowledged elevated inflation and presence of risks to the upside. Siemens, Deutsche Telekom, and Persimmon reported strong results.

• In economic data:
  • Eurozone's June Retail Sales -0.3% m/m (expected 0.1%; last 0.4%); 0.7% yr/yr (expected 1.0%; last 1.9%)
  • Germany's June Factory Orders 3.1% m/m (expected 0.5%; last 0.3%)
  • France's final Q2 nonfarm payrolls -0.1% qtr/qtr, as expected (last -0.1%)
  • Italy's June Industrial Production -1.0% m/m (expected 0.3%; last -0.3%); -0.6% yr/yr (expected 1.0%; last 1.2%)
  • Spain's June Industrial Production 1.1% yr/yr (last 3.1%)
  • Swiss July Unemployment Rate 3.1%, as expected (last 3.1%)

---Equity Markets---

• STOXX Europe 600: +0.4%
• Germany's DAX: unch
• U.K.'s FTSE 100: +0.2%
• France's CAC 40: +0.6%
• Italy's FTSE MIB: +1.0%
• Spain's IBEX 35: +1.2%