Stock Market Update

The S&P 500 futures currently trade one point above fair value. 

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note with Japan's Nikkei (+1.3%) and South Korea's Kospi (+1.5%) settling at fresh record highs. The Chinese government has reportedly started selling local government bonds to increase investment. China's Ministry of Commerce will tighten control over exports of dual-use items to Japan. The People's Bank of China said that monetary policy will be maintained at an appropriately loose level with reserve requirement ratio cuts and interest rate cut flexibility this year.

• In economic data:
  • Japan's December Monetary Base -9.8% yr/yr (expected -8.0%; last -8.7%)
  • Hong Kong's December Manufacturing PMI 51.9 (last 52.9)
  • India's December Services PMI 58.0 (expected 59.1; last 59.8)
  • Australia's December Services PMI 51.1 (expected 51.0; last 52.8)

---Equity Markets---

• Japan's Nikkei: +1.3%
• Hong Kong's Hang Seng: +1.4%
• China's Shanghai Composite: +1.5%
• India's Sensex: -0.4%
• South Korea's Kospi: +1.5%
• Australia's ASX All Ordinaries: -0.4%

Major European indices trade on a mostly higher note while France's CAC (flat) lags amid weakness in bank stocks and consumer names. Eurozone's final Services PMI (52.4) reading for December showed a deceleration from the flash reading (52.6) and the final November reading (53.6). Germany's final December CPI will be released at 8:00 ET and it is expected to show CPI slowing to 2.0% yr/yr from 2.3%. Meanwhile, France's CPI decelerated to 0.8% from 0.9%, an outcome that was praised by Bank of France Governor Villeroy de Galhau.

• In economic data:
  • Eurozone's final December Services PMI 52.4 (expected 52.6; last 53.6)
  • Germany's final December Services PMI 52.7 (expected 52.6; last 53.1)
  • U.K.'s final December Services PMI 51.4 (expected 52.1; last 51.3)
  • France's flash December CPI 0.1% m/m (expected 0.2%; last -0.2%); 0.8% yr/yr (expected 0.9%; last 0.9%). Final December Services PMI 50.1 (expected 50.2; last 51.4)
  • Italy's final December Services PMI 51.5 (expected 54.2; last 55.0)
  • Spain's final December Services PMI 57.1 (expected 54.8; last 55.6)

---Equity Markets---

• STOXX Europe 600: +0.4%
• Germany's DAX: +0.4%
• U.K.'s FTSE 100: +1.1%
• France's CAC 40: flat
• Italy's FTSE MIB: +0.4%
• Spain's IBEX 35: +0.5%