Stock Market Update

Equity futures point to a lower opening this morning as crude oil prices climb following an exchange of strikes between the U.S. and Iran over the weekend. The modest pressure comes after the major averages finished slightly higher last week despite considerable volatility surrounding oil prices, Treasury yields, and monetary policy expectations.

Attention this week will turn to the August Producer Price Index on Thursday and Consumer Price Index on Friday, both of which have the potential to shift expectations ahead of next week's FOMC meeting. The market currently assigns roughly a 60% probability to a 25-basis point rate hike, according to the CME FedWatch tool.

On the U.S. data front:

• August NFIB Small Business Optimism 98.7 vs. 99.3 Briefing.com consensus; prior 99.8

Today's remaining economic calendar:

• 3:00 PM ET: July Consumer Credit; Briefing.com consensus $11.3B; prior $14.2B

In corporate news:

• Anthropic is set to begin IPO marketing in October, according to Bloomberg. 
• Intel (INTC 100.25, +4.45, +4.7%) trades higher amid reports of potential price increases.
• Roivant (ROIV 41.38, +6.45, +18.47%) said the Phase 2 PHocus study of mosliciguat in PH-ILD met its primary and secondary endpoints, while the Phase 3 PHrontier study is underway.

Reviewing overnight developments:

Regional markets digested trade data from China and revised second-quarter growth figures from Japan. Japan's Nikkei: -1.7%, Hong Kong's Hang Seng: -0.4%, China's Shanghai Composite: +0.2%, India's Sensex: -0.7%, South Korea's Kospi: -0.6%, Australia's ASX All Ordinaries: -0.9%.

In news:

• South Korea is planning to build a gas power plant and eight nuclear power plants in the U.S. as part of a $200 billion investment project.
• China will release its August CPI and PPI readings overnight.

In economic data:

• China's August trade surplus CNY809.30 bln (expected CNY805.00 bln; last CNY767.07 bln). August Imports 28.2% yr/yr (expected 30.0%; last 27.5%) and Exports 25.0% yr/yr, as expected (last 23.9%).
• Japan's Q2 GDP 0.4% qtr/qtr (expected 0.3%; last 0.5%), Q2 GDP Capital Expenditure -0.9% qtr/qtr (expected -1.2%; last -0.7%), Q2 GDP Private Consumption 0.0% qtr/qtr, as expected (last 0.3%), and Q2 External Demand 0.5% qtr/qtr, as expected (last 0.3%). July Overall Wage Income 4.7% yr/yr (expected 3.9%; last 4.0%), July Overtime Pay 3.1% yr/yr (expected 3.9%; last 3.4%). July Current Account surplus JPY2.52 trln (expected JPY2.46 trln; last JPY1.40 trln). August Economy Watchers Current Index 46.4 (expected 46.3; last 45.7)
• South Korea's Q2 GDP 0.6% qtr/qtr, as expected (last 1.7%); 3.7% yr/yr, as expected (last 3.6%)
• Australia's September Westpac Consumer Sentiment -5.2% (last 6.0%). July Building Approvals -3.6% m/m, as expected (last 7.2%) and Private House Approvals -4.2% m/m (expected -4.2%; last 0.8%)
• New Zealand's Q2 Manufacturing Sales Volume 0.8% qtr/qtr (last 3.6%)

Attention is on Thursday's ECB decision along with political and fiscal developments in Germany and the UK. STOXX Europe 600: -0.1%, Germany's DAX: -0.1%, U.K.'s FTSE 100: -0.1%, France's CAC 40: UNCH, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: -0.3%.

In news:

• The ECB is widely expected to announce a rate hike Thursday, with the statement likely to shape expectations for another possible increase in December.
• There is speculation that the British chancellor could announce tax increases in the Autumn budget address.
• Germany's AfD won a weekend election in Saxony-Anhalt, doubling its support.

In economic data:

• Germany's July trade surplus EUR21.3 bln (expected surplus of EUR16.0 bln; last surplus of EUR15.4 bln). July Imports -5.7% m/m (last 4.5%) and Exports -0.8% m/m (expected 0.0%; last 0.9%)
• France's July trade deficit EUR6.7 bln (expected deficit of EUR6.0 bln; last deficit of EUR5.8 bln) and July Current Account deficit EUR4.7 bln (last deficit of EUR1.6 bln)