Stock Market Update

The S&P 500 futures currently trade 13 points above fair value.

Equity indices in the Asia-Pacific region ended the week on a mixed note with Japan's Nikkei (-0.6%) and South Korea's Kospi (-0.5%) hitting fresh records before reversing. The Bank of Japan left its policy rate at 0.50%, as expected, though two policymakers voted in favor of an increase. The central bank announced a plan to sell its ETF holdings at JPY330 bln per year while J-REITS will be sold at a pace of JPY5.5 bln per year. The market sees some potential for another hike in October and expects that hike to be made no later than January. President Trump is expected to speak with China's President Xi this morning. Softbank is reportedly reducing the headcount in its Vision Fund by up to 20%.

• In economic data:
  • Japan's August National CPI 0.1% m/m (last 0.1%); 2.7% yr/yr (last 3.1%). National Core CPI 2.7% yr/yr, as expected (last 3.1%)
  • New Zealand's August trade deficit NZD1.19 bln (expected deficit of NZD746 mln; last deficit of NZD716 mln). August Credit Card Spending 3.5% yr/yr (last 1.6%)

---Equity Markets---

• Japan's Nikkei: -0.6% (+0.6% for the week)
• Hong Kong's Hang Seng: UNCH (+0.6% for the week)
• China's Shanghai Composite: -0.3% (-1.3% for the week)
• India's Sensex: -0.5% (+0.9% for the week)
• South Korea's Kospi: -0.5% (+1.5% for the week)
• Australia's ASX All Ordinaries: +0.3% (-0.7% for the week)

Major European indices are on track for a mostly higher finish to the week. Spain's economy minister called on the EU to "engage" China to reduce the EU's trade deficit with China. Stellantis trades firmly higher after being upgraded at Berenberg. European Central Bank policymaker Centeno said that inflation risks remain tilted to the downside and that inflation below 2.0% can't be tolerated for too long. UBS, Morgan Stanley, and Bank of America no longer expect the Bank of England to cut its bank rate before the end of the year.

• In economic data:
  • Germany's August PPI -0.5% m/m (expected -0.1%; last -0.1%); -2.2% yr/yr (expected -1.8%; last -1.5%)
  • U.K.'s August Retail Sales 0.5% m/m (expected 0.4%; last 0.5%); 0.7% yr/yr (expected 0.6%; last 0.8%). August Core Retail Sales 0.8% m/m (expected 0.3%; last 0.4%); 1.2% yr/yr (expected 0.8%; last 1.0%). August Public Sector Net Borrowing GBP18.00 bln (expected GBP12.80 bln; last GBP1.05 bln)
  • France's September Business Survey 96, as expected (last 97)

---Equity Markets---

• STOXX Europe 600: UNCH (UNCH week-to-date)
• Germany's DAX: UNCH (-0.1% week-to-date)
• U.K.'s FTSE 100: UNCH (-0.6% week-to-date)
• France's CAC 40: +0.3% (+0.7% week-to-date)
• Italy's FTSE MIB: +0.2% (-0.5% week-to-date)
• Spain's IBEX 35: +0.7% (-0.6% week-to-date)