Sentiment Higher On A Strong US Session Friday

Jun 04 18, 07:35 GMT

General Trend:

Asian equity markets generally track Friday’s gains in the US
US Commerce Sec Ross said to leave China without firm commitments on imports (financial press)
China widens collateral for medium-term lending facility (MLF) amid recent reports about corporate defaults
China Q2 GDP growth seen in line with Q1 (Chinese press)
Aussie rises after better than expected retail sales: Data supported by unusually warm April
Reserve Bank of Australia (RBA) due to hold policy meeting tomorrow
The G-7 Heads of State summit is expected to be held on June 8-9th (Friday-Saturday)
Various airline and aerospace industry execs comment at the IATA’s World Air Transport Summit in Sydney (June 3-5th)

Headlines/Economic Data

Japan

Nikkei 225 opened +0.9%; closed +1.4%
Nikkei 225 Futures rolled over into the Sept 2018 contract
TOPIX Marine Transportation index +2.8%, Iron & Steel +2.3%, Securities +1.9%, Electric Appliances +1.5%
Japanese megabanks rise over 1%
Toyota [7203.JP] rises over 3% following positive broker commentary
Yamazaki Baking [2212.JP] gains over 13% after announcing price increase
(JP) Japan May Monetary Base y/y: 8.1% v 7.8% prior; End of Period: ¥492.6T v ¥492.9Te
(JP) Former BoJ Gov Shirakawa: Japan’s growth rate doing reasonably well given its demographic challenges; Correct measurement of inflation has become difficult
(JP) Nikkei survey of 1.1K Japanese companies finds FY18/19 CAPEX spending to be ¥27.9T, ~16.7% y/y
(JP) Japan Chief Cabinet Sec Suga: Will maintain policy of sanctions against North Korea; will negotiate hard to get exemption from steel tariffs
SBI, 8473.JP Expected to begin operations for cryptocurrency exchange as of today – Japanese Press

Korea

Kospi opened +0.2%
(KR) Bank of Korea Gov Lee: Monetary policy has limitations, needs to be a harmonious mix of policy
Hyosung, 004800.KR Officially launched a holding group and four affiliates, to improve transparency in management and corporate governance – Korean press
(KR) South Korea sells KRW1.6T v KRW1.6T indicated in 5-yr treasury bonds; avg yield 2.49%

China/Hong Kong

Hang Seng opened +1.1%, Shanghai Composite +0.3%
Hang Seng Property/Construction index +2.2%, Telecom +1.8%, Info Tech +1.7%, Consumer Goods +1.5%, Financials +1.3%
Shanghai Composite Property Sub-index rises over 1%
(CN) 3rd round of trade talks between China and US end without a deal: China comments: two sides have made “concrete progress”; any move by the US to impose punitive tariffs would derail the negotiations
(CN) China Q2 GDP growth expected 6.7-6.8% – China Daily Commentary
(CN) Reiterates the recent move by China PBoC to expand MLF collateral was not an overall loosening – China Securities Times (reminder June 1st: China PBoC widens the collateral for Medium Term Lending Facility (MLF); to add qualified credit bonds)
(CN) China PBoC sets yuan reference rate at 6.4208 v 6.4078 prior
(CN) China PBoC Open Market Operation (OMO): To inject CNYB in 7 and 28-day reverse repos v CNY80B injected in 7, 14 and 28-day reverse repos prior: Net: injection CNY20B v CNY80B injected prior
(CN) NDRC: China cuts solar power prices of newly-built station (from June 1st)
(CN) China banks making a push to set up independent asset management subsidiaries to cope with tighter regulations on wealth management that aim to break implicit guarantees on banking products – SCMP
(HK) Hong Kong Government: Reiterates prepared to deal with any capital outflows
(HK) 3-month HIBOR at 1.78% (highest level since 2008)

Australia/New Zealand

ASX 200 opened +0.4%, closed +0.5%
ASX 200 REIT index +1.3%, Resources +0.8%, Consumer Discretionary +0.7%, Financials +0.6%; Utilities -1.8%, Telecom -0.7%
CBA.AU [+2%],Resolves AML/CTF proceedings with Austrac, to pay civil penalty of A$700M (higher than the A$375M expected) with Austrac legal costs totaling A$2.5M
ANZ.AU Core of ACCC case said to be a recorded video conference between ANZ’s treasurer Rick Moscati and investment banks JPMorgan, Deutsche and Citigroup for allegedly striking a criminal cartel – AFR
(AU) AUSTRALIA Q1 COMPANY OPERATING PROFIT Q/Q: 5.9% V 3.0%E; INVENTORIES Q/Q: 0.7% V 0.0%E
(AU) AUSTRALIA APR RETAIL SALES M/M: 0.4% V 0.3%E

Other Asia

North America

IATA: Cuts global airline 2018 profit guidance 12% to $33.8B (prior $38.4B) due to rising costs; Sees passenger air travel 7.0% v 8.1% y/y
(US) On Saturday at the G7 meeting, 6 countries (ex the US) issued a formal statement which expressed their unanimous concern and disappointment with the US steel and aluminum tariffs – financial press

Europe

(DE) German Chancellor Merkel: US has withdrawn from multilateral agreements and imposed new tariffs on steel and aluminum imports, including from Europe – Frankfurter Allegemeine
(US) On Saturday at the G7 meeting, 6 countries (ex the US) issued a formal statement which expressed their unanimous concern and disappointment with the US steel and aluminum tariffs – financial press
(TR) Moody’s placed Turkey Ba2 sovereign rating on review for downgrade (from June 1st)
Bayer, BAYN.DE Resolves capital increase with subscription rights against cash contributions in the amount of €6.0B to finance the acquisition of Monsanto
SocGen [GLE.FR]: UniCredit said to be seeking merger with SocGen – FT

Levels as of 02:00ET

Hang Seng +1.4%; Shanghai Composite +0.5%; Kospi +0.4%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 +0.2%
EUR 1.1696-1.1654; JPY 109.77-109.45; AUD 0.7621-0.7559;NZD 0.7008-0.6977
Aug Gold -0.3% at $1,295/oz; Jul Crude Oil -0.1% at $65.75/brl; Jul Copper +0.4% at $3.10/lb