General Trend:

  • Shanghai Composite trades at over 1-year low
  • South Korean equities and Won (KRW) decline
  • Australia ASX 200 outperforms on gains in the telecom, energy, utilities and financial sectors
  • BoJ affirms moderate expansion for the economy, despite Q1 GDP contraction; cuts inflation assessment (as speculated)
  • China PBoC’s reluctance to raise OMO rates after recent Fed hike has led to concerns about the domestic economy (Chinese press)
  • China makes changes to composition of PBoC
  • Argentina shakes up central bank following recent IMF agreement
  • BoJ Gov Kuroda’s post-rate decision press conference expected at 0630 GMT

Headlines/Economic Data

Australia/New Zealand

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  • ASX 200 opened +0.3%
  • ASX 200 Telecom index +1.9%, Utilities +1.6%, Financials +1.5%, Energy +1.5%, Resources +1.1%
  • (AU) Reserve Bank of Australia (RBA) Assist Gov Ellis: Infrastructure can have significant spillover benefits
  • (NZ) New Zealand May Business NZ PMI: 54.5 v 58.9 prior
  • (NZ) New Zealand May Non Resident Bond Holdings: 58.9% v 59.8% prior

China/Hong Kong

  • Shanghai Composite opened -0.2%, Hang Seng -0.1%
  • Hang Seng Materials index -1.2%, Telecom -0.9%, Energy -0.6%, Utilities -0.5%,Consumer Goods -0.4% Financials -0.2%
  • Shanghai Composite property sub-index rises by over 1%
  • Brokers in Hong Kong said to offer HK$155B in margin loans related to IPO for Xiaomi – HK Press
  • (US) Trump administration official: Trump will direct ‘pretty significant action’ on tariffs against China; expected to affect $50B in Chinese products
  • (CN) White House said to put tariffs on a smaller list of 800 to 900 products from China tomorrow (trimmed from original list of 1,300 products) – CNBC
  • (CN) CHINA MAY NEW HOME PRICE M/M: 0.7% V 0.6% PRIOR: Y/Y: 4.7% V 4.7% PRIOR
  • (CN) PBoC conducts CNY60.5B Pledged Supplemental Lending (PSL) operation
  • (CN) PBoC names Vice Finance Minister Liu Wei as member of Monetary Policy Committee; PBoC Chief Economist Ma Jun named as PBoC Adviser; Names PBoC Gov Yi Gang as Committee Chief.
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7, 14 and 28-day reverse repos v CNY150B injected in 7, 14 and 28-day reverse repos prior: Net: CNY90B injection v CNY70B injected prior
  • (CN) For the week, PBoC injected net of CNY240B in open market operations v CNY300B net drain w/w
  • (CN) China Finance Ministry (MOF): Cut subsidies for certain renewable energy project including waste-to-energy and biomass
  • (CN) China NDRC said to consider investment management rules for the auto industry – Chinese Press
  • (CN) China Finance Ministry sells 30-year bonds: yield 4.1082% v 4.10%e, bid to cover 1.75x v 1.91x prior

Japan

  • Nikkei 225 opened +0.6%
  • TOPIX Electric Appliances index +0.5%, Information & Communication +0.5%, Real Estate +0.3%
  • Megabanks lag the overall market
  • (JP) BoJ leaves policy unchanged (as expected); Sees CPI in range of 0.5% to 1.0%

Korea

  • Kospi opened +0.4%
  • (KR) South Korea May Unemployment Rate: 4.0% v 3.8% prior
  • (KR) South Korea Finance Min: May job market report was ‘shocking’ in that job growth remained weak; Labor difficulties in certain industries are worsening
  • (KR) South Korea Finance Min Kim: Impact of ECB is ‘limited”

Other

  • (PH) Water rates in the Philippines are expected to rise due to FX impact – Local Press

North America

  • US equity markets ended mixed: Dow -0.1%, S&P500 +0.3%, Nasdaq +0.9%, Russell 2000 +0.5%
  • S&P500 Utilities +1.2%, Consumer Discretionary +1%; Financials -0.9%
  • NXP Semiconductors [NXPI]: China said to approve sale to Qualcomm, says HK report; The transaction is still awaiting Chinese approval, according to separate financial press report
  • (CA) Bank of Canada (BOC) Wilkins: To evaluate effect of US tariffs on consumer prices

Europe

  • (EU) ECB policymakers reportedly at odds over policy statement wording on end of QE and rate hike; some wanted to signal possible rate hike in mid 2019 and others want to keep option open for extension of bond buys – press

Levels as of 01:30ET

  • Nikkei 225 +0.5%, ASX 200 +1.3%, Hang Seng -0.1%; Shanghai Composite -0.8%; Kospi -0.5%
  • Equity Futures: S&P500 flat; Nasdaq100 flat, Dax flat; FTSE100 +0.1%
  • EUR 1.1555-1.1585 ; JPY 110.45-110.81 ; AUD 0.7452-0.7480 ;NZD 0.6946-0.6977
  • Aug Gold -0.3% at $1,304/oz; Jul Crude Oil +0.1% at $66.97/brl; Jul Copper +0.3% at $3.212 /lb
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