General Trend:
- Asian equities rise as markets in China and Hong Kong advance
- Chinese yuan and Aussie gain amid rise in Chinese equities
- China FX reserves rose in June for the first time in 4 months, government cites factors including rise in the US dollar
- Some analysts see risk that the RBA’s rate guidance could be altered due to global trade situation
Headlines/Economic Data
Japan
- Nikkei 225 opened +0.2%
- TOPIX Electric Appliances index +1.4%, Information & Communications +1.4%, Real Estate +1.3%, Securities +1.2%, Iron & Steel +0.7%
- Japanese automakers and megabanks trade generally higher
- (JP) Japan Jun Lending Ex-Trusts y/y: 2.1% v 1.9% prior; Including Trusts y/y: 2.2% v 2.0% prior
- (JP) JAPAN MAY BOP CURRENT ACCOUNT BALANCE: ¥1.94T V ¥1.27TE; ADJ CURRENT ACCOUNT: ¥1.85B V -¥1.18TE; Trade Balance BoP Basis -¥303.9B v -¥483.1Be
- Honda, 7267.JP To partner with Panasonic in the area of portable lithium-ion batteries – Japanese Press
- 4523.JP Eisai and Biogen Announce Phase 2 Positive Topline Results of the Final Analysis for BAN2401 at 18 Months (+16% daily limit)
- (JP) BoJ Gov Kuroda: Reiterates will adjust monetary policy as needed to maintain economy’s momentum to achieve its price target
- (JP) METI: Sees Japan July-Sept quarter crude steel production +2.3% y/y
Korea
- Kospi opened +0.2%
- (KR) South Korea H1 Avg grain price +19.8% y/y, the largest increase on record – Korean press
- (KR) South Korea trade ministry is working on finalizing the members of the delegation for Washington’s public hearing on auto tariffs, scheduled for later this month – Korean press
- (KR) US Sec of State Pompeo visit to North Korea seemed to be viewed negatively by North Korea after accusing the US of “gangster-like tactics” and increasing the “risk of war”. Pompeo commented: the two sides had “good-faith, productive conversations which will continue in the days and weeks ahead
- (KR) South Korea Finance Min Official: May issue 50-yr bonds on regular basis depending on market demand; plans to help develop liquid market for 50-yr gov’t bonds
- (KR) South Korea Deputy Fin Min Hung-kwon: CPI to accelerate in H2 due to rise in global oil prices – Korean press
China/Hong Kong
- Hang Seng opened +1.0%, Shanghai Composite +0.2%
- Hang Seng Services index +2.5%, Consumer Goods +2.4%, Property/Construction +2.3%, Info Tech +2.1%, Energy +1.9%, Industrial Goods +1.9%, Materials +1.8%, Telecom +1.7%, Financials +1.4%,
- (CN) China PBOC Gov Yi Gang: Reiterates to maintain prudent and neutral monetary policy
- (CN) CHINA JUN FOREIGN RESERVES: $3.1121T V $3.1106T PRIOR (first rise in 4 months)
- (US) On Friday, the USTR set a 90-day deadline for exclusions from the tariffs on goods from China
- (CN) There is speculation that China might delay new rules aimed at wealth management products due to market turmoil – Chinese press
- Xiaomi IPO opens for trade, 1810.HK Opens for trade at HK$16.60/shr v HK$17.00/shr pricing
- (CN) China PBoC Open Market Operation (OMO): Skips OMO for the 3rd consecutive day: Net: CNY0B drain v CNY110B drain prior
- (CN) China PBoC set yuan reference rate at 6.6393 v 6.6336 prior
- (CN) China financial institutions and economists see H1 GDP growth at 6.7% – Xinhua
- (CN) China FX Regulator SAFE: In June FX reserves rose due to fall in non-dollar currencies against the US dollar and asset price changes
- (CN) China Securities Regulatory Commission (CSRC) planning to allow foreign individual investors to trade domestic A shares through local brokers – SCMP
- (CN) China continues to try and get EU to join it in coalition against US trade policies; to offer preferential treatment and faster investment negotiations
- Looking ahead: China June CPI and PPI due in tomorrow’s session
Australia/New Zealand
- ASX 200 opened +0.1%
- ASX Financials index +0.4%
- (AU) Australia senior Labor official calling for a royal commission into retail electricity pricing; Greens are looking to introduce a bill for a commission of inquiry into the space – Australian
- SPK.AU NZ Commerce Commission: To move forward with proceedings related to historical billing; Affirms FY18 guidance
- (AU) NAB notes chatter that trade, higher bank funding costs and tighter credit conditions could mean that the RBA’s next move could be a rate cut, suggests investors could start to price in some probability of a rate cut but hurdle for rate cut is seen as high– US financial press
North America
- (US) Trump Administration suspends risk adjustment payments related to the Affordable Care Act (ACA) – US financial press
- Looking ahead: US President Trump to attend NATO summit which he is supposed to reiterate position on more equal funding; then will attend meeting with President Putin
Europe
- (EU) ECB Coeure: ECB is not complacent to trade-war risks, June decision took account of trade and other risks
- (UK) Brexit Sec David Davis has resigned from govt
- (UK) Resigned Brexit Sec Davis: PM May’s policy now more likely to break manifesto pledge, have been a significant number of times over the last year have disagreed with May; General direction of May’s policy will leave UK in a “at best a weak negotiating position” – resignation letter
- (UK) British Chambers of Commerce (BCC): Bank of England (BoE) rhetoric around raising rates looks ‘ill-judged’
- (IE) Ireland Jun Construction PMI: 58.4 v 61.8 prior
Levels as of 01:30ET
- Hang Seng +1.5%; Shanghai Composite +1.8%; Kospi +0.6%; Nikkei225 +3.0%; ASX 200 +0.3%
- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.4%; FTSE100 +0.4%
- EUR 1.1743-1.1767; JPY 110.35-110.53; AUD 0.7428-0.7464;NZD 0.6830-0.6845
- Aug Gold +0.4% at $1,260/oz; Aug Crude Oil +0.4% at $74.11/brl; Sept Copper +1.7% at $2.87/lb
