Stock Market Update

Equity futures now have a slightly negative tilt after the August employment report came in stronger than expected.

Equity indices in the Asia-Pacific region had a mostly higher finish to the week. JGBs of all tenors climbed overnight, extending their bounce off this year's lows. Softbank priced a JPY1 trillion 7-yr note offering at the higher end of the indicated yield range. Japan's Finance Minister Katayama confirmed that the budget for fiscal 27/28 will reach a new record of JPY143 trillion. Today's small data slate included Japan's largest decline in household spending in more than two years as consumers reduced spending on food and transportation.

• In economic data:
  • Japan's July household spending increased 0.5% month-over-month (expected 2.6%; last -6.4%) and decreased 3.6% year-over-year (expected -1.6%; last -3.3%), marking the largest annual decline in more than two years as consumers reduced spending on food and transportation.
  • South Korea's July current account surplus narrowed to $42.08 billion from $49.73 billion.

---Equity Markets---

• Japan's Nikkei: +1.3%
• Hong Kong's Hang Seng: +1.7%
• China's Shanghai Composite: -0.3%
• India's Sensex: +0.5%
• South Korea's Kospi: +1.6%
• Australia's ASX All Ordinaries: UNCH

Major European indices trade near their flat lines with Germany's DAX (+0.3%) showing some relative strength. Norway's sovereign wealth fund is looking to reduce its holdings of U.S. Treasuries from 70% to 50%, according to FT . Volkswagen outperforms after its supervisory board approved a plan that calls for up to 50,000 job cuts. The U.K. is looking to approve new oil drilling efforts in the North Sea.

• In economic data:
  • Eurozone July retail sales decreased 0.6% month-over-month (expected 0.3%; last 0.2%) and increased 0.6% year-over-year (expected 1.1%; last 1.4%).
  • Germany's July factory orders increased 2.5% month-over-month (expected 0.3%; last 3.7%).
  • Italy's July retail sales decreased 0.4% month-over-month (expected 0.2%; last -0.2%) and increased 0.8% year-over-year (last 3.1%).

---Equity Markets---

• STOXX Europe 600: -0.1%
• Germany's DAX: +0.5%
• U.K.'s FTSE 100: -0.2%
• France's CAC 40: -0.2%
• Italy's FTSE MIB: -0.3%
• Spain's IBEX 35: -0.1%