Stock Market Update

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

Equity indices in the Asia-Pacific region ended Tuesday on a lower note. China's growth figures for August showed below-consensus Retail Sales growth due to weak auto sales coupled with above-consensus Industrial Production growth. China's National Bureau of Statistics said that the economy was steady in August, though there were deepening negative impacts from the external environment. Japan is considering an increase to its defense spending target to 3.5% of GDP from the current 2.0%.

• In economic data:
  • China's August Retail Sales increased 0.4% yr/yr (expected 0.7%; last 0.6%).
  • China's August Industrial Production increased 5.2% yr/yr (expected 4.8%; last 4.5%).
  • China's August Fixed Asset Investment decreased 7.2% yr/yr (expected -7-1%; last -6.7%).
  • China's August House Prices decreased 3.0% (last -3.2%).
  • China's August Unemployment Rate was 5.3% (expected 5.2%; last 5.2%).
  • Japan's July Tertiary Industry Activity Index was 0.9 (last 5.4).
  • South Korea's August Import Price Index increased 15.6% yr/yr (last 18.8%).
  • South Korea's August Export Price Index increased 42.4% yr/yr (last 48.9%).
  • South Korea's August trade surplus was $34.79 bln (expected surplus of $34.75 bln; last surplus of $30.39 bln).
  • South Korea's August Imports increased 22.4% yr/yr (expected 22.5%; last 26.5%).
  • South Korea's August Exports increased 68.7% yr/yr (expected 68.7%; last 63.0%).
  • New Zealand's August Electronic Card Retail Sales decreased 0.9% m/m (last 1.2%) and increased 0.2% yr/yr (last 3.4%).
  • India's August trade deficit was $26.86 bln (last deficit of $31.98 bln).

---Equity Markets---

• Japan's Nikkei: UNCH
• Hong Kong's Hang Seng: -1.0%
• China's Shanghai Composite: -0.5%
• India's Sensex: -1.0%
• South Korea's Kospi: -0.9%
• Australia's ASX All Ordinaries: -0.8%

Major European indices are mixed, but little changed overall. The Bank of England plans to stop active sales of 20- and 30-yr Gilts, aiming to slow rising yields. European Central Bank policymaker Moulin said that last week's rate hike was justified by the inflation outlook, adding that member states need to reduce the overall budget deficit.

• In economic data:
  • The eurozone's September ZEW Economic Sentiment was 25.8 (expected 39.2; last 31.4).
  • The eurozone's July trade surplus was EUR14.2 bln (expected surplus of EUR3.7 bln; last surplus of EUR7.2 bln).
  • Germany's September ZEW Economic Sentiment was 34.7 (expected 39.8; last 34.2).
  • Germany's September ZEW Current Conditions was -47.1 (expected -53.0; last -61.1).
  • Germany's August WPI increased 0.9% m/m (expected 0.1%; last 0.2%) and 6.8% yr/yr (last 5.3%).
  • The U.K.'s July three-month employment change was 67,000 (last 83,000).
  • The U.K.'s July Average Earnings Index + Bonus increased 3.9% yr/yr, as expected (last 4.2%).
  • The U.K.'s July Unemployment Rate was 4.9% (expected 5.0%; last 4.9%).
  • The U.K.'s August Claimant Count Change was 27,800 (expected 8,300; last -11,800).
  • France's August CPI increased 0.7% m/m, as expected (last 0.6%), and 2.4% yr/yr, as expected (last 2.1%).
  • Italy's July trade surplus was $8.240 bln (expected surplus of $4.770 bln; last surplus of $4.343 bln).
  • Spain's August CPI increased 0.7% m/m, as expected (last 0.3%), and 4.3% yr/yr, as expected (last 3.6%).
  • Spain's August Core CPI increased 2.9% yr/yr, as expected (last 3.0%).

---Equity Markets---

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