Stock Market Update

The S&P 500 futures continue to move modestly lower as overseas weakness and rising sovereign yields remain in focus.

Equity indices in the Asia-Pacific region had a weak showing on Wednesday with South Korea's Kospi (-4.0%) falling toward last week's low. South Korea and Japan will deepen their cooperation on energy, critical minerals, and carbon rules. Continued weakness in Japanese debt sent JGB yields on all tenors to fresh highs for the year, though the long end finished slightly higher. Treasury Secretary Bessent said during yesterday's G20 meeting of finance ministers and central bankers that China continues to flood the world with cheap exports due to overcapacity. The Reserve Bank of New Zealand raised its official cash rate by 25 basis points to 2.75%, as expected.

• In economic data:
  • The Reserve Bank of New Zealand raised its official cash rate by 25 basis points to 2.75%, as expected.
  • South Korea's August CPI increased 0.2% month-over-month (expected 0.3%; last -0.2%) and 3.1% year-over-year (expected 3.2%; last 2.8%).
  • Australia's Q2 GDP increased 0.4% quarter-over-quarter (expected 0.3%; last 0.3%) and 2.1% year-over-year (expected 1.8%; last 2.5%).
  • Australia's August AIG Construction Index rose to -6.9 from -40.8.
  • Australia's August AIG Manufacturing Index rose to -16.6 from -19.3.
  • New Zealand's July Building Consents decreased 4.3% month-over-month after declining 3.7% in June.

---Equity Markets---

• Japan's Nikkei: -3.0%
• Hong Kong's Hang Seng: -0.1%
• China's Shanghai Composite: -1.0%
• India's Sensex: -0.5%
• South Korea's Kospi: -4.0%
• Australia's ASX All Ordinaries: -1.1%

Major European indices trade in the red while regional sovereign debt also trades lower with 10-yr yields in Germany, France, and the U.K. hitting fresh 2026 highs. Discount carrier Ryanair lowered its passenger traffic target for fiscal 2027 due to rising fuel prices. Intercontinental Hotels outperforms after an upgrade. European Central Bank policymaker Nagel acknowledged that the market is all but certain about a rate hike later this month.

• In economic data:
  • France's July budget deficit widened to EUR145.9 billion from EUR106.8 billion.
  • Italy's July PPI increased 2.4% month-over-month (last 0.0%) and 7.8% year-over-year (last 5.8%).
  • Spain's August unemployment increased by 44,400 (expected 15,400; last 19,500).

---Equity Markets---

• STOXX Europe 600: -0.4%
• Germany's DAX: -0.4%
• U.K.'s FTSE 100: -0.4%
• France's CAC 40: -0.5%
• Italy's FTSE MIB: -0.4%
• Spain's IBEX 35: +0.1%