HomeContributorsFundamental AnalysisChina Releases Unscheduled June Export To US Data Showing A Dramatic Drop

China Releases Unscheduled June Export To US Data Showing A Dramatic Drop

General Trend:

  • Asian equity markets trade mostly lower, despite gains in the US
  • Chinese equities extend declines
  • Gaming names in China and Hong Kong trade lower on Macau gaming Rev figures yesterday
  • Property shares in China continue to drop amid reports of additional curbs
  • Macau casino firms decline on weaker than expected monthly revenues
  • Fast Retailing expected to report monthly SSS after the Nikkei close
  • China releases data for June exports to the US in uncommon move
  • PBoC official said China has ‘many’ FX tools, reiterated to keep yuan stable
  • China fixed the yuan (CNY) at the weakest since late Aug 2017
  • New Zealand Q2 business confidence hits 7-year low
  • RBA leaves policy unchanged (as expected), notes the Aussie has depreciated ‘a little’

Headlines/Economic Data

Japan

  • Nikkei 225 opened +0.4%
  • TOPIX Marine Transportation index -0.9%
  • (JP) Japan Jun Monetary Base: ¥502.9T v ¥492.6T prior; y/y: 7.4% v 8.1% prior; Japan companies see inflation in 1 year at 0.9% y/y (prior 0.8%); 3 years at 1.1% y/y (prior 1.1%); 5 years at 1.1% y/y (prior 1.1%) –
  • (JP) Japan Fin Min Aso: More trade is good for Japan; if US/China trade war escalates it will affect others
  • (JP) Japan MoF sells ¥2.2T v ¥2.2T indicated in 0.1% (prior 0.1%) 10-yr JGB; avg yield 0.037% v 0.048% prior; bid to cover 4.37x v 4.38x prior

Korea

  • Kospi opened +0.6%
  • (KR) SOUTH KOREA JUN CPI M/M: -0.2% V 0.1%E; Y/Y: 1.5% V 1.7%E
  • 003550.KR New chairman and CEO Koo Kwang-mo looking at each unit and how to make it profitable – Korean press
  • (KR) Korean press comments on the challenges for South Korea companies on the continued steep decline of the won in recent weeks. The weakening of the won in recent weeks carries both benefits and risks for the Korean economy that is being held back by a simultaneous downturn in investment, consumption and exports.
  • (KR) South Korea sells KRW1.65T v KRW1.65T indicated in 30-yr bonds; avg yield 2.565%
  • (US) White House confirms Sec of State Pompeo will head to North Korea on July 5th

China/Hong Kong

  • Hang Seng opened -1.2%, Shanghai Composite 0.0%
  • Hang Seng Services index -5.5%, Materials -4.9%, Energy -4.7%, Consumer Goods -4.1%, Industrial Goods -4.1%, Property/Construction -3.7%, Financials -3.3%, Info Tech -3%
  • China Mobile [941.HK]: US Commerce Dept reportedly recommends against China Mobile entry into US market – press
  • (CN) Shanghai implements restrictions on housing purchases by enterprises – local press
  • Guoco, 53.HK Controlling shareholder offered to acquire the company for HK$135/share (~14% premium to prior close)
  • (CN) China PBoC set yuan reference rate at 6.6497 v 6.6157 prior (weakest setting since late Aug 2017)
  • (CN) China PBoC Open Market Operation (OMO): Skips OMO operations for the second consecutive day; Net: CNY150B drain v CNY20B drain prior
  • (CN) China June exports to the US said to be +3.8% y/y – Chinese press
  • (CN) PBOC Deputy Gov Pan Gongsheng: Bond defaults good for long term development of China market; China confident to keep yuan stable in reasonable range, reiterates fundamentals are strong and economy is resilient; China has ample foreign reserves
  • (CN) Major state owned China banks seen swapping yuan for dollars in forwards and immediately selling them into spot market to support the yuan
  • China Mobile, 941.HK US Commerce Dept reportedly recommends against China Mobile entry into US market – press

Australia/New Zealand

  • ASX 200 opened 0.0%
  • ASX 200 Telecom index +1.6%, Consumer Discretionary +0.9%, Financials +0.8%, Energy +0.6%, REIT +0.5%; Resources -1%
  • (NZ) New Zealand Q2 NZIER Business Confidence: -20 v -11 prior (7-yr low); Capacity Utilization: 92.8% v 93.5% prior
  • (AU) Australia Department of Industry, Innovation & Science lowers FY17/18 resource earnings by ~A$3.3B; Raises FY18/19 resource earnings by A$7.8B
  • (AU) AUSTRALIA MAY BUILDING APPROVALS M/M: -3.2% V 0.0%E; Y/Y: +3.1% V 9.9%E
  • (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED

North America

  • US equity markets ended higher: Dow +0.2%, S&P500 +0.3%, Nasdaq +0.8%, Russell 2000 +0.7%
  • S&P500 Technology +0.9%, Utilities +0.7%

Europe

  • (DE) Chancellor Merkel and Interior Min Seehofer reach compromise over migration – German press; Interior Min Seehofer: confirms CDU and CSU has reached agreement; will stay in post as Interior Min; Chancellor Merkel: will establish transit centers for asylum seekers; CSU/CDU accord preserves European partnership
  • (UK) Chambers of Commerce: Govt has managed to make limited progress on just 2 of the 23 issues where clarity is urgently needed so that firms can plan their trade following the UK’s departure from the EU

Levels as of 01:30ET

  • Hang Seng -2.5%; Shanghai Composite -0.8%; Kospi -0.2%; Nikkei225 -1.0%; ASX 200 +0.6%
  • Equity Futures: S&P500 -0.2%; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 -0.1%
  • EUR 1.1621-1.1644; JPY 110.76-111.13; AUD 0.7314-0.7347;NZD 0.6688-0.6719
  • Aug Gold -0.2% at $1,239/oz; Aug Crude Oil +0.8% at $74.56/brl; Sept Copper -0.4% at $2.93/lb
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