Stock Market Update

The S&P 500 futures currently trade two points below fair value. 

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note with Japan's Nikkei (-0.3%), Hong Kong's Hang Seng (+1.8%), and South Korea's Kospi (-1.1%) hitting fresh highs for the year. Baidu had a strong showing in Hong Kong on expectations for AI growth. China's government announced a series of measures aimed at increasing consumption through promotional activities. Japan's trade balance report for August showed that exports to the U.S. fell 13% month-over-month. Japan sold 20-yr bonds to strong demand.

• In economic data:
  • Japan's August trade deficit JPY242.5 bln (expected deficit of JPY513.6 bln; prior deficit of JPY118.4 bln). August Imports -5.2% yr/yr (expected -4.2%; last -7.4%) and Exports -0.1% yr/yr (expected -1.9%; last -2.6%)
  • Singapore's August trade surplus $5.078 bln (last surplus of $6.351 bln). August non-oil exports -8.9% m/m (last -6.0%); -11.3% yr/yr (expected 1.0%; last -4.7%). Q2 Unemployment Rate 2.0% (expected 2.1%; last 2.1%)
  • Australia's August MI Leading Index -0.1% m/m (last 0.1%)
  • New Zealand's Q3 Westpac Consumer Sentiment 90.9 (last 91.2). Q2 Current Account -3.7% of GDP (last -5.7% of GDP)

---Equity Markets---

• Japan's Nikkei: -0.3%
• Hong Kong's Hang Seng: +1.7%
• China's Shanghai Composite: +0.4%
• India's Sensex: +0.4%
• South Korea's Kospi: -1.1%
• Australia's ASX All Ordinaries: -0.6%

Major European indices trade near their flat lines while Italy's MIB (-1.2%) underperforms, deepening its pullback from its best level of the year. A hot CPI reading from the U.K. kept the year-over-year CPI growth rate at 3.8%, which will weigh on rate cut expectations. In addition, the U.K.'s budget office is expected to reduce its productivity growth estimates ahead of the fall budget. Meanwhile, the eurozone's CPI was up 2.0% year-over-year in August, matching the European Central Bank's target. Germany is expected to announce that its borrowing in Q4 will be increased by EUR15 bln.

• In economic data:
  • Eurozone's August CPI 0.1% m/m (expected 0.2%; last 0.0%); 2.0% yr/yr (expected 2.1%; last 2.0%). August Core CPI 0.3% m/m, as expected (last -0.2%); 2.3% yr/yr, as expected (last 2.3%)
  • U.K.'s August CPI 0.3% m/m, as expected (last 0.1%); 3.8% yr/yr, as expected (last 3.8%). August Core CPI 0.3% m/m (last 0.2%); 3.6% yr/yr (expected 3.7%; last 3.8%). August RPI 0.4% m/m (expected 0.5%: last 0.4%); 4.6% yr/yr (expected 4.7%; last 4.8%)

---Equity Markets--- 

• STOXX Europe 600: flat
• Germany's DAX: +0.3%
• U.K.'s FTSE 100: +0.3%
• France's CAC 40: -0.1%
• Italy's FTSE MIB: -1.2%
• Spain's IBEX 35: -0.1%