Stock Market Update

The S&P 500 futures currently trade 30 points below fair value. 

Equity indices in the Asia-Pacific region ended Thursday on a higher note with South Korea's Kospi (+5.9%) recovering its loss from Wednesday. Japanese debt extended its rebound from Wednesday after the U.S. Treasury announced an increase to its maximum buybacks of longer-dated Treasuries. On a related note, Nikkei reported that Japan may implement tax incentives for retail JGB investors. SK Hynix is reportedly joining Samsung in raising prices of its products by up to 15%. The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.00% and 3.50%. Bank Indonesia left its policy rate at 5.75%, as expected.

• In economic data:
  • Japan's July trade deficit JPY634.5 bln (expected deficit of JPY680 bln; last deficit of JPY409.9 bln). July Imports 27.8% yr/yr (expected 26.5%; last 25.4%) and Exports 23.2% yr/yr (expected 19.9%; last 19.3%)
  • Hong Kong's July CPI 0.2% m/m (last 0.0%); 1.7% yr/yr, as expected (last 2.0%). July Unemployment Rate 3.7% (last 3.7%)
  • Australia's August MI Inflation Expectations 4.9% (last 4.7%). July Employment Change -15,800 (expected 11,700; last 80,200), July full Employment Change 16,300 (last 48,900). July Unemployment Rate 4.5% (expected 4.4%; last 4.4%) and Participation Rate 66.9%, as expected (last 67.0%)

---Equity Markets---

• Japan's Nikkei: +1.4%
• Hong Kong's Hang Seng: +0.8%
• China's Shanghai Composite: +0.2%
• India's Sensex: +0.8%
• South Korea's Kospi: +5.9%
• Australia's ASX All Ordinaries: +0.5%

Major European indices trade on a mostly lower note while Italy's MIB (+0.3%) outperforms slightly. A tanker was reportedly hijacked in the Gulf of Aden, adding to the list of shipping difficulties in the Middle East. Sweden's central bank left its policy rate at 1.75% but added that the rate is likely to be raised later in the year. German bunds are modestly higher even though PPI accelerated to 3.0% in July from 1.8% in June.

• In economic data:
  • Eurozone's June Construction Output -1.34% m/m (last 0.19%)
  • Germany's July PPI 1.1% m/m (expected 0.5%; last -0.3%); 3.0% yr/yr (expected 2.7%; last 1.8%)
  • U.K.'s August CBI Industrial Trends Orders -25 (expected -40; last -45)
  • Swiss July trade surplus CHF8.73 bln (last surplus of CHF5.049 bln)

---Equity Markets---

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