Additional US Tariffs On China Took Effect Despite Trade Talks

Aug 23 18, 06:24 GMT

General Trend:

Equity markets in Asia trade mixed
Retail sourcing firm Li & Fung declines over 14%, reported H1 net loss
Qantas declines after FY results
Xiaomi gains after reporting Q2 results
US tariffs of 25% on additional $16B worth of imports from China took effect (as expected); Awaiting any possible countermeasures from China

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
ASX 200 Utilities index -2.9%, REIT -1.2%, Financials -1.1%, Consumer Discretionary -0.4%; Telecom +2.6%, Resources +0.9%, Energy +0.8%
(AU) Australia PM Turnbull: Confirms he would not stand as candidate in leadership ballot
(AU) Australia Cabinet members Cormann, Cash and Fifield said to have all resigned – financial press
(AU) Australia Lower House votes to suspend parliament until Sept 10th
(NZ) New Zealand sells NZ$150M v NZ$150M indicated in April 2025 bonds, avg yield 2.2253%, bid to cover 5.25x

China/Hong Kong

Shanghai Composite opened flat, Hang Seng +0.3%
Hang Seng Materials index -1.6%, Services -1.3%, Utilities -1.3%, Industrial Goods -1.3%, Telecom -1.2%, Prop/Construction -1%, Financials -0.8%, Energy -0.6%, Info Tech -0.3%
(CN) China PBoC set yuan reference rate: 6.8367 v 6.8271 prior
(CN) China PBoC Open Market Operation (OMO): Skips OMO v skipped prior: Net: CNY40B drain
(CN) China Banking and Insurance Regulator (CBIRC): Banks in China face new round of bad assets exposure; harder to conduct credit expansion on a larger scale currently
(CN) China regulator said to have guided local government bond yields higher – Chinese Press
(CN) China plans to encourage private investment in 28 projects worth ~$16B – financial press
(CN) China Internet Association starts checks on P2P lenders – US financial press

Japan

Nikkei 225 opened +0.3%
TOPIX Retail Trade index +1.1%, Info & Communications +0.6%, Real Estate +0.5%; Marine Transportation -1.1%, Iron & Steel -0.9%
Automakers trade generally lower
Netflix [NFLX]: Said to raise prices in Japan by up to ¥350 (Japanese Press)
(JP) Japan Aug Prelim Manufacturing PMI: 52.5 v 52.3 prior
(JP) Japan July Crude Steel Production Y/Y: -2%
(JP) Japan Weekly Investors Net Buying of Foreign Bonds: -¥1.93T v +¥123.9B prior; Foreign Buying of Japan Stocks: -¥510.6B v -¥107.1B prior

Korea

Kospi opened +0.4%
(KR) Some tour agents in Shanghai said to be allowed to sell packages related to South Korea – South Korean Press
(KR) South Korea Q2 Household Credit (KRW): 1,493T v 1,468T prior
(KR) South Korea Finance Min Kim: To expand job-related budget to record level

Other

North America

US equity markets ended mixed: Dow -0.3%, S&P500 flat, Nasdaq +0.4%, Russell 2000 +0.3%
S&P500 Energy +1.2%, Industrials -1%
(US) DOE CRUDE: -5.8M V -2ME

Europe

(EU) Germany Chancellor Merkel is reportedly more focused on the selection of the next EU President over securing the ECB Presidency for Bundesbank’s Weidmann – German press
(UK) UK govt reportedly plans to impose duties on EU imports if there is a no-deal Brexit – UK press
(ZA) US President Trump said to have asked US Sec of State Pompeo to study land seizures in South Africa – financial press

Levels as of 01:30ET

Nikkei 225, +0.3%, ASX 200 -0.2%, Hang Seng -0.3%; Shanghai Composite +0.5%; Kospi +0.2%
Equity Futures: S&P500 flat; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 flat
EUR 1.1600-1.1542 ; JPY 110.95-110.50 ; AUD 0.7359-0.7282 ;NZD 0.6705-0.6662
Aug Gold -0.4% at $1,198/oz; Sept Crude Oil +0.1% at $67.94/brl; Sept Copper -0.9 % at $2.643/lb