Aussie GDP Beats Expectations, Sending A$ higher

Jun 06 18, 07:06 GMT

General Trend:

Asian equity markets trade generally higher following another record high for the Nasdaq
Japanese equities gain as the Yen trades broadly weaker
Commodity and tech related sectors outperform
Nikkei weighted Fanuc [6954.JP] declines over 2% after cautious broker commentary
Sony names current Chief Information Officer as new CFO
China telecom ZTE said to have signed agreement in principle to settle with the US Commerce Dept.
US Treasury Sec Mnuchin said to urge Trump to exempt Canada from tariffs; CAD and MXN trade higher

USD/JPY hovers below ¥110

Australia Q1 GDP beat ests amid strength in commodity exports; Aussie gains, this starts the 27th consecutive year with no recession, data also marked the fastest annual pace in nearly 2 years
New Zealand Q1 value of buildings unexpectedly declined, non-residential construction dropped
PBoC offers medium-term lending facility (MLF) at unchanged rate; skips daily OMO
China Central Bank speculated to raise MLF and reverse repo rates in the future (Chinese Press); Next week’s Fed meeting in focus (June 12-13th)
Reserve Bank of India (RBI) to hold rate decision later today (unchanged is the consensus)

Headlines/Economic Data

Japan

Nikkei 225 opened -0.1%; closed +0.4%
TOPIX Real Estate index +1%, Information & Communications +0.8%, Marine Transportation +0.6%
Toyota Motors rises over 1%
(JP) JAPAN APR LABOR CASH EARNINGS Y/Y: 0.8% V 1.3%E; REAL CASH EARNINGS Y/Y: 0.0% V 0.1%E
(JP) Japan FSA may start probe into money laundering among domestic banks – Japanese Press
(JP) World Bank: Cuts Japan 2018 GDP estimate to 1.0% from 1.3%

Korea

Kospi closed for holiday
(KR) South Korea Ministry of Trade, Industry and Energy: Have attracted ~$500M of investment from China investors in the areas of next-generation technologies, including chips, bio, automobiles and robots, through a ministerial roundtable – Korean press

China/Hong Kong

Hang Seng opened +0.2%, Shanghai Composite -0.2%
Hang Seng Materials index +1.3%, Industrial Goods +1.2%, Info Tech +1.1%, Energy +0.7%, Services +0.7%Financials +0.2%
(CN) China speculated to cut RRR and raise yields on the medium term lending facility (MLF) and reverse repo – China Securities Journal
(CN) China PBoC sets yuan reference rate at 6.4040 v 6.4157 prior
(CN) China PBoC Open Market Operation (OMO): Skips v CNY120B injected in 7 and 28-day reverse repos prior: Net: drain CNY0B v CNY30B injected prior
(CN) CHINA PBOC CONDUCTS CNY463B IN 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) V CNY156B PRIOR AT 3.30% V 3.30% PRIOR
(CN) China debt cutting moves are harming private companies, while debt heavy state firms are carrying on. Of the seven companies that experienced their first bond default this year, six were privately owned – SCMP
(CN) China securities regulator (CSRC) may approve CNY300B in funds related to CDRs on Wed – China Securities Times

Australia/New Zealand

ASX 200 opened +0.1%, closed +0.4%
ASX 200 Energy index +2.5%, Resources +2%, Utilities +0.6%; Financials -0.8%
BHP [BHP.AU]: Said to receive bids which value shale unit at up to $9.0B – US financial press
(NZ) Reserve Bank of New Zealand (RBNZ): To consult on new capital adequacy documents in late 2018; intention is not to change policy content of framework
(NZ) New Zealand Fin Min Robertson: Debt forecast offers room against shocks
(AU) AUSTRALIA Q1 GDP Q/Q: 1.0% V 0.9%E; Y/Y: 3.1% V 2.8%E
(NZ) New Zealand to sell NZ$100M in 2040 inflation indexed bonds June 7th

Other Asia

(ID) Indonesia Central Bank Gov Warjiyo: Expects Rupiah currency (IDR) to appreciate if inflows continue
(MY) Malaysia Central Bank Chief Ibrahim said to have offered to resign in relation to state investment fund 1MDB – financial press

North America

US equity markets ended mostly higher: Dow -0.1%, S&P500 +0.1%, Nasdaq +0.4%, Russell 2000 +0.7%
S&P500 Materials +0.8%, Consumer Discretionary +0.6%
(US) Weekly API Oil Inventories: Crude: -2M v +1.0M prior
(VE) Venezuela PDVSA said to consider force majeure on oil exports, if terminal tanker congestion worsens unless customers accept ship to ship transfer – US financial press
(CA) US Treasury Sec Mnuchin said to urge Trump to give Canada exemption from tariffs – Local Media
(G7) Canadian G-7 official: G-7 currently working to reconcile gaps for a final communique; doesn’t commit to G-7 releasing a final communique
UPS [UPS]: Freight and package workers vote to authorize strike; The Teamsters suggested that the vote does not mean that a strike is imminent.
World Bank updates 2018 global forecast: risks to global economy tilted to downside; maintains global GDP estimate at 3.1%
US primary senate election results show democratic strength
FB Confirms data sharing partnerships remain with Lenovo, Oppo and TCL, to wind down with Huawei by the end of the week – NYT

Europe

(EU) ECB reportedly ready to discuss QE exit policy at June 14th meeting – press
(EU) ECB’s Weidmann (Germany): European reforms must fit into the existing framework; A rainy day fund is worthy of consideration
(UK) Labour Party reportedly plans to announce shift towards soft Brexit – UK press
(IT) Italy PM Conte wins Senate confidence vote, as expected – press
(IT) Italy PM Conte: Euro exit has never been discussed by the govt; We should not make bond spread our only reference point
Smurfit Kappa [SKG.UK]: International Paper to withdraw offer for Smurfit Kappa – press

Levels as of 02:00ET

Hang Seng +0.7%; Shanghai Composite -0.2%; Kospi +0.3%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.2%
EUR 1.1734-1.1714; JPY 109.97-109.79; AUD 0.7672-0.7615;NZD 0.7048-0.7025
Aug Gold -0.0% at $1,302/oz; Jul Crude Oil +0.6% at $65.89/brl; Jul Copper -0.5% at $3.19/lb