Stock Market Update

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

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan's trade balance report for May showed a drop in shipments of vehicles and steel to the U.S. and China. Japan's Prime Minister Ishiba said that he will seek a trade deal with the U.S. "until the final minute," adding that auto imports are a big point of disagreement. Australia's Prime Minister Albanese will begin negotiations on a security and defense partnership with the EU and he expects to meet with President Trump soon.

• In economic data:
  • Japan's June Reuters Tankan Index 6 (last 8). May trade deficit JPY637.6 bln (expected deficit of JPY893.0 bln; last deficit of JPY115.6 bln). May Imports -7.7% yr/yr (expected -6.7%; last -2.2%) and Exports -1.7% yr/yr (expected -3.8%; last 2.0%). April Core Machinery Orders -9.1% m/m (expected -9.3%; last 13.0%); 6.6% yr/yr (expected 4.0%; last 8.4%)
  • Australia's May MI Leading Index -0.1% m/m (last 0.0%)
  • New Zealand's Q2 Westpac Consumer Sentiment 91.2 (last 89.2). Q1 Current Account deficit NZD2.32 bln (expected deficit of NZD2.19 bln; last deficit of NZD6.80 bln)

---Equity Markets---

• Japan's Nikkei: +0.9%
• Hong Kong's Hang Seng: -1.1%
• China's Shanghai Composite: UNCH
• India's Sensex: -0.2%
• South Korea's Kospi: +0.7%
• Australia's ASX All Ordinaries: -0.2%

Major European indices trade in the red, reflecting some ongoing caution and uncertainty surrounding the situation in the Middle East. European Central Bank policymaker Panetta lamented the presence of risks to the policy outlook that are difficult to quantify. Sweden's Riksbank lowered its policy rate by 25 basis points to 2.00%. The Bank of England will announce its latest policy decision tomorrow, though a rate cut is not expected.

• In economic data:
  • Eurozone's May CPI 0.0% m/m, as expected (last 0.6%); 1.9% yr/yr, as expected (last 2.2%). May Core CPI 0.0% m/m, as expected (last 0.1%); 2.3% yr/yr, as expected (last 2.7%). April Current Account surplus EUR19.8 bln (expected surplus of EUR40.4 bln; last surplus of EUR50.9 bln)
  • U.K.'s May CPI 0.2% m/m, as expected (last 1.2%); 3.4% yr/yr (expected 3.3%; last 3.5%). May Core CPI 0.2% m/m, as expected (last 1.4%); 3.5% yr/yr, as expected (last 3.8%). May RPI 0.2% m/m (last 1.7%); 4.3% yr/yr (expected 4.2%; last 4.5%). May House Price Index 3.5% yr/yr (expected 5.6%; last 6.4%)

---Equity Markets---

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.6%
• U.K.'s FTSE 100: +0.2%
• France's CAC 40: -0.3%
• Italy's FTSE MIB: -0.1%
• Spain's IBEX 35: -0.2%