Stock Market Update

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

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's trade balance for June showed a drop in exports to China and the United States. There is a growing likelihood that the U.S. will not reach a trade deal with Japan by the end of the month, though Japan's top trade negotiator said that in-depth talks are being held with the U.S. Australia reported weak employment figures for June, prompting speculation about the Reserve Bank of Australia being behind the curve when it comes to rate cuts. Nomura expects the RBA to make three cuts by February.

• In economic data:
  • Japan's June trade surplus JPY153.1 bln (expected surplus of JPY353.9 bln; last deficit of JPY638.6 bln). June Imports 0.2% yr/yr (expected -1.6%; last -7.7%) and Exports -0.5% yr/yr (expected 0.5%; last -1.7%)
  • Singapore's June trade surplus SGD9.71 bln (last surplus of SGD7.26 bln). June non-oil exports 14.3% m/m (last -12.4%); 13.0% yr/yr (expected 5.0%; last -3.9%)
  • Hong Kong's June Unemployment Rate 3.5% (last 3.5%)
  • Australia's July MI Inflation Expectations 4.7% (last 5.0%). June Employment Change 2,000 (expected 21,000; last -1,100) and full employment change -38,200 (last 38,700). June Unemployment Rate 4.3% (expected 4.1%; last 4.1%) and Participation Rate 67.1% (expected 67.0%; last 67.0%)
  • New Zealand's June FPI 1.2% m/m (last 0.5%)

---Equity Markets---

• Japan's Nikkei: +0.6%
• Hong Kong's Hang Seng: -0.1%
• China's Shanghai Composite: +0.4%
• India's Sensex: -0.5%
• South Korea's Kospi: +0.2%
• Australia's ASX All Ordinaries: +0.8%

Major European indices trade in the green. The U.K.'s unemployment rate stayed on an upward trend in May, reaching 4.7%, its highest level in nearly four years. The EU is reportedly preparing a list of U.S. services that could be hit with tariffs on top of planned tariffs on imports of U.S. goods. EasyJet reported solid quarterly results but warned that profit in the current quarter will be hit by an air traffic controller strike in France.

• In economic data:
  • Eurozone's June CPI 0.3% m/m, as expected (last 0.0%); 2.0% yr/yr, as expected (last 1.9%). June Core CPI 0.4% m/m, as expected (last 0.0%); 2.3% yr/yr, as expected (last 2.3%)
  • U.K.'s May Average Earnings Index + Bonus 5.0% yr/yr, as expected (last 5.4%). June Claimant Count Change 25,900 (expected 17,900; last 15,300), May three-month employment change 134,000 (expected 46,000; last 89,000), and May Unemployment Rate 4.7% (expected 4.6%; last 4.6%)
  • Swiss June trade surplus CHF5.79 bln (expected surplus of CHF4.22 bln; last surplus of CHF4.01 bln)

---Equity Markets---

• STOXX Europe 600: +0.7%
• Germany's DAX: +0.9%
• U.K.'s FTSE 100: +0.3%
• France's CAC 40: +1.0%
• Italy's FTSE MIB: +0.6%
• Spain's IBEX 35: +0.5%