Stock Market Update

U.S. equity futures continue to point to a lower open as rising global bond yields and higher oil prices remain key headwinds. The S&P 500 futures currently trade 57 points below fair value. 

Equity indices in the Asia-Pacific region began September on a mostly lower note. There was some focus on an NHK report that Treasury Secretary Bessent told top Japanese officials that more rate hikes are needed. That said, the market was already pretty confident that a September rate hike will take place before this report. Japan's Ministry of Finance sold 10-yr JGBs to good demand, though the 10-yr yield still climbed to a fresh 2026 high just shy of 3.00%. Japan will spend JPY616 bln to extend fuel subsidies. China's RatingDog Manufacturing PMI (51.5) for August showed continued growth, bucking the trend seen in official PMI readings.

• In economic data:
  • China's August RatingDog Manufacturing PMI rose to 51.5 from 50.9, above the 51.0 consensus.
  • Japan's Q2 capital spending increased 1.6% yr/yr after no growth in Q1, versus an expected 0.2% decline.
  • Japan's August Manufacturing PMI rose to 54.9 from 54.5, just below the 55.1 consensus.
  • Japan's August Household Confidence rose to 35.5 from 34.9, above the 35.3 consensus.
  • South Korea's August trade surplus widened to $34.75 bln from $30.39 bln, exceeding the expected $30.70 bln surplus.
  • South Korea's August imports increased 22.5% yr/yr, below the 24.7% consensus and 26.5% in July.
  • South Korea's August exports increased 68.7% yr/yr, above the 62.6% consensus and 63.0% in July.
  • South Korea's August Manufacturing PMI fell to 52.3 from 53.1.
  • Australia's August Manufacturing PMI was unchanged at 52.0, as expected.
  • Australia's Q2 current account deficit widened to AUD27.2 bln from AUD25.4 bln, but was smaller than the expected AUD29.7 bln deficit.
  • Australia's July Building Approvals fell 3.6% m/m after increasing 6.9%, versus an expected 4.7% decline.
  • Australia's July Private House Approvals fell 4.2% m/m after increasing 0.4%.
  • India's August Manufacturing PMI fell to 52.8 from 53.5, just below the 52.9 consensus.

---Equity Markets---

• Japan's Nikkei: -0.2%
• Hong Kong's Hang Seng: -0.9%
• China's Shanghai Composite: -0.2%
• India's Sensex: UNCH
• South Korea's Kospi: +0.2%
• Australia's ASX All Ordinaries: -0.1%

Major European indices trade in the red. The eurozone's Manufacturing PMI for August (52.7) showed stronger than expected growth, thanks in large part to an-above consensus reading from Germany (54.3; expected 54.1). European Central Bank policymaker Rehn said that the conflict in Iran could keep inflation elevated and that the ECB can't show complacency. British Prime Minister Burnham is expected to announce measures to reduce the cost of living later today.

• In economic data:
  • The eurozone's August Manufacturing PMI rose to 52.7 from 51.9, just below the 52.8 consensus.
  • The eurozone's flash August CPI increased 2.9% m/m after rising 0.2% in July.
  • The eurozone's flash August CPI was up 3.3% yr/yr, as expected, accelerating from 2.9%.
  • The eurozone's flash August core CPI increased 0.2% m/m after being unchanged in July.
  • The eurozone's flash August core CPI was up 2.4% yr/yr, below the 2.5% consensus and July reading.
  • The eurozone's July unemployment rate was unchanged at 6.4%, above the 6.3% consensus.
  • Germany's July retail sales fell 3.4% m/m after being unchanged, versus an expected 0.4% increase.
  • Germany's July retail sales fell 2.5% yr/yr after increasing 5.3%.
  • Germany's August Manufacturing PMI rose to 54.3 from 52.2, above the 54.1 consensus.
  • The U.K.'s August Nationwide HPI increased 0.2% m/m after falling 0.1%, above the 0.1% consensus.
  • The U.K.'s August Nationwide HPI increased 1.6% yr/yr, below the 2.1% consensus but up from 1.4%.
  • The U.K.'s August Manufacturing PMI slipped to 51.7 from 51.9, above the 51.5 consensus.
  • U.K. net lending to individuals fell to GBP6.30 bln in July from GBP9.50 bln, below the GBP7.20 bln consensus.
  • U.K. mortgage approvals fell to 56,050 in July from 58,220, below the 59,000 consensus.
  • France's August Manufacturing PMI rose to 51.1 from 49.8, below the 51.5 consensus.
  • Italy's August Manufacturing PMI fell to 49.6 from 51.3, below the 51.4 consensus.
  • Italy's Q2 GDP increased 0.2% qtr/qtr, as expected and unchanged from Q1.
  • Italy's Q2 GDP increased 1.0% yr/yr, as expected, accelerating from 0.8%.
  • Italy's July unemployment rate was unchanged at 5.8%, above the 5.6% consensus.
  • Italy's flash August CPI increased 0.5% m/m, as expected, after rising 0.3% in July.
  • Italy's flash August CPI increased 3.3% yr/yr, accelerating from 2.9%.
  • Spain's August Manufacturing PMI fell to 49.5 from 50.2, below the 50.3 consensus.
  • Swiss retail sales increased 2.3% yr/yr in July, above the 1.6% consensus and 1.9% in June.
  • The Swiss August Manufacturing PMI rose to 57.1 from 53.2, above the 54.1 consensus.

---Equity Markets---

• STOXX Europe 600: -0.4%
• Germany's DAX: -1.0%
• U.K.'s FTSE 100: -0.5%
• France's CAC 40: -0.2%
• Italy's FTSE MIB: -0.9%
• Spain's IBEX 35: -0.6%