General Trend:
- Asian equity markets trade mixed
- Property shares in China and Hong Kong extend losses
- China Commerce Ministry responds to speculated investment restrictions by the US
- New Zealand May trade surplus above ests, lamb exports hit record high
- New Zealand June business confidence declines, Kiwi (NZD) hits 2018 low
- RBNZ due to hold policy decision on Thursday
- Chinese yuan (CNY) declines for 10th straight session
- Offshore yuan (CNH) declines past 6.60/USD for first time since Dec 2017 , and -6% from March highs
Headlines/Economic Data
Japan
- Nikkei 225 opened -0.1%
- TOPIX Marine Transportation index -1.1%, Real Estate -0.7%, Iron & Steel -0.5%; Retail Trade +0.8%, Info & Communications +0.7%
- (JP) BoJ Q1 Flow of Funds Report: Central bank held 41.8% of the JGB market as of the end of March v 41.1% q/q
- (JP) BOJ Dep Gov Amamiya: paying close attention to the downside of stimulus, not ruling out the possibility of policy adjustments if circumstances warrant
- (JP) Fitch Report: Pace of asset purchases by Bank of Japan (BoJ) has continued to slow sharply in 2018 to an annual rate of ~¥45T ($410B)
- (JP) Japan Fin Min Aso: Cautious about changing how capital gains on cryptocurrencies is taxed – press
Korea
- Kospi opened -0.1%
- (KR) Experts on North Korea shared views that overheated expectations of inter-Korean economic cooperation should be moderated, as companies may have to wait a long time before seeing the benefits of economic ties – Korean press
China/Hong Kong
- Hang Seng opened +0.3%, Shanghai Composite -0.1%
- Hang Seng Property/Construction index -2.1%, Materials -1.9%, Financials -0.9%, Consumer Goods -0.6%; Energy +1.8%
- Shanghai Property index extends losses, drops over 1.5%
- (CN) China President Xi: Warned leaders to be ready for a full scale trade war with the US; also noted PBOC will refrain from buying US treasuries and will seek to reduce them “appropriately” – press citing Xi in meeting with other leaders – ZeroHedge
- (CN) China researcher urging more proactive fiscal policy in H2 – China Daily
- (CN) China looking at rules that could curb implicit debt – Chinese press
- (CN) China insurance regulator CIRC said to increase on-site checks of insurance companies – China Securities News
- (CN) China Beige Book: Economy is doing better than official data shows
- (US) President Trump has suggested he would not go ahead with new curbs on investment from China in the US and instead rely mainly on existing tools – press
- 763.HK US Senators said to be considering trading restrictions for lifting ban on ZTE – SCMP
- (CN) China removes imports tariffs on soybean imports from India, South Korea, Bangladesh, Laos and Sri Lanka from the prior 3%
- (CN) China Global Times calls on Govt to increase efforts to support industries affected by US tariffs, including subsidies
- (CN) China PBoC Open Market Operation (OMO): Injects CNY60B in 7-day reverse repos v injects CNY80B in 7-day reverse repos prior; Net: drains CNY150B v CNY90B drains prior
- (CN) China PBoC sets yuan reference rate at 6.5569 v 6.5180 prior
- (CN) China May Industrial Profits y/y: 21.1% v 21.9% prior
- (CN) China Commerce Ministry (MOFCOM) Notices US possible restriction measures on investment, will closely watch possible measures
- (HK) According to Nomura, mortgage rates may be increased in Hong Kong amid rising domestic interest rates – US financial press
Australia/New Zealand
- ASX 200 opened +0.1%
- ASX 200 Energy index +1.3%, Consumer Discretionary +1%, Resources +1%; Telecom -1.3%, Financials -0.2%
- (NZ) NEW ZEALAND MAY TRADE BALANCE (NZ$): +294M V +100ME; 12-MONTH YTD: -3.59B V -3.74BE
- (AU) Australia May YTD underlying cash deficit A$10.0B v A$14.9B prior
- (NZ) RBNZ to defer bank liquidity policy review after priority rethink
- (NZ) New Zealand Jun ANZ Activity Outlook: 9.4 v 13.6 prior; Confidence: -39.0 v -27.2 prior
- (AU) Australia sells A$1.0B v A$1.0B indicated in 2.50% May 21 2030 bonds, avg yield 2.7083% v 0.7029% prior, bid to cover 3.48x v 3.36x
- (AU) Australia Stats Bureau said to examine the whether it is feasible to issue monthly CPI reports
Other Asia
- Philippine Peso (PHP) hits lowest level since 2006; Government official denied Presidential interference regarding central bank
North America
- US equity market ended higher: Dow +0.1%, S&P500 +0.2%, Nasdaq +0.4%, Russell 2000 +0.7%
- S&P500 Energy +1.3%, Consumer Discretionary +0.7%
- (US) Weekly API Oil Inventories: Crude: -9.2M v -3M prior
- (US) S&P affirms United States sovereign rating at AA+: Outlook stable
- (US) US Trade Rep Lighthizer: Retaliatory tariffs show trading hypocrisy, US will take all necessary actions to protect its interests
Europe
- (UK) UK Chancellor Hammond: Hopes UK can seize unlimited opportunities brought by China Belt and Road Initiative – Chinese Press
- (DE) CDU’s Kauder (Merkel ally): Agreement on migrant policy between German coalition parties was not expected in talks Tues night; migration disagreement will not hinder coalition work
Levels as of 01:30ET
- Hang Seng -0.9%; Shanghai Composite -1.0%; Kospi +0.0%; Nikkei225 -0.2%; ASX 200 +0.1%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax +0.0%; FTSE100 +0.0%
- EUR 1.1640-1.1664; JPY 109.37-110.20; AUD 0.7361-0.7398;NZD 0.6812-0.6866
- Aug Gold -0.3% at $1,256/oz; Aug Crude Oil +0.3% at $70.72/brl; Sept Copper -0.6% at $2.99/lb
