China And US Said To Have Dialogue On Trade

Jul 12 18, 07:14 GMT

General Trend:

Asian equities rise, Shanghai Composite trades higher by over 1%
Valuations of China A-shares are at historic lows, according to China’s official Xinhua
ZTE rises over 19%, US Commerce Dept signed escrow agreement with the company, allowing for ban on US suppliers to be lifted (press)
Fast Retailing gains over 1% ahead of earnings report, expected after today’s market close
Softbank rallies over 6%, Tiger Global said to acquire stake
Bank of Korea (BoK) left rates unchanged (as expected) and trimmed its 2018 GDP forecast, 1 member voted for rate hike
China PBoC fixed the yuan (CNY) weaker, yuan midpoint has largest 1-day pct decline since early 2017
Offshore Yuan (CNH) tracks gains in the equity market
USD/JPY extends gain after hitting 6-month high on Wed
AUD/USD rises after decline on yesterday’s session
China cut soybean imports forecast amid trade impact
China June trade balance tentatively scheduled for release on Friday’s session
Singapore prelim Q2 GDP due for release on Friday

Headlines/Economic Data

Japan

Nikkei 225 opened +0.5%
TOPIX Info & Communication index +2.3%, Marine Transportation -0.5%
Japanese automakers trade generally higher after USD/JPY hit 6-month high
(JP) Japan Investors Net Buying of Foreign Bonds: +¥817.9B v -¥293.4B prior: Foreign Net Buying of Japan Stocks: +¥74.3B v -¥299.8B prior (1st week of buying after 6 consecutive weeks of selling Japan equities)
Kobe Steel, 5406.JP Police officials expected to refer the co’s case by as soon as next week – Japanese Press
Softbank, 9984.JP Tiger Global acquires $1B stake, sees Softbank as under valued
(JP) Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.5% (prior 0.50%) 20-yr bonds; avg yield 0.4920% v 0.5030% prior; bid to cover 4.54x v 4.23x prior

Korea

Kospi opened +0.2%
(KR) BANK OF KOREA (BOK) LEAVES RATES UNCHANGED AT 1.50% (AS EXPECTED)
(KR) Korea Blockchain Association approved the cybersecurity standards of 12 cryptocurrency exchanges in Korea, including Bithumb, Coinone, Korbit and Gopax
(KR) South Korea analysts see opportunity amid China/US trade war; the tariffs are expected to have a limited impact on Korea’s exports in the short term – Korean press

China/Hong Kong

Hang Seng opened -0.2%, Shanghai Composite -0.2%
Hang Seng Industrial Goods index +1.9%, Services +1.8%, Consumer Goods +1.7%, Property/Construction +1.4%, Financials +1.2%, Utilities +1.1%, Materials +1%, Info Tech +1%
(CN) China PBoC Open Market Operation (OMO): Injects CNY30B in 7-day reverse repos v skips prior (1st injection after 5 consecutive skips): Net: CNY0B drain v CNY40B drain prior
(CN) China PBoC set yuan reference rate at 6.6726 v 6.6234 prior
(CN) China Vice President Wang Qishan met with Chicago mayor Rahm Emanuel, issues discussed included US/China ties – Xinhua
ZTE, 763.HK US Commerce Dept signs escrow agreement with ZTE, allowing for ban on US suppliers to be lifted – press
(CN) China banks expected to show increased lending in June, as crackdown on shadow banking flows over into more official channels – press
(CN) China Vice Min of Commerce Wang Shouwen: Needs to be a resolution to the conflict between USand China, via a new round of new bilateral negotiations
1114.HK BMW said to raise stake in JV with Brilliance to at least 75% – German Press

Australia/New Zealand

ASX 200 opened flat
ASX 200 REIT index +1.6%, Financials +1.5%; Energy -1.1%, Resources -0.6%
Sonic Healthcare, [+5%], SHL.AU CEO Goldschmidt: in light of press speculation invited US medical regulators to inspect its main laboratory in Austin, Texas; inspection was completed with no significant issues found
LYC.AU CEO Lacaze: If there is a full-blown trade war, I can’t believe that the China wouldn’t use rare earths as part of that – US press
BHP.AU Says it has made new wage offer to workers at Escondida copper mine in Chile, offered salaries that are inflation adjusted
(AU) Australia Treasury Sec John Fraser to resign, to be replaced by Philip Gaetjens
(NZ) New Zealand June Food Prices m/m: 0.5% v 0.0% prior
(NZ) New Zealand sells NZ$250M in 3% 2029 bonds; avg yield 2.8597%

North America

US equity markets ended lower: Dow -0.9%, S&P500 -0.7%, Nasdaq -0.6%, Russell 2000 -0.7%
S&P500 Energy -2.1%, Materials -1.7%
(US) Fed’s Williams (moderate, voter): immigration is important to US growth and innovation
(US) White House Aide: US has held high level talks with China, open to further discussions
CA Broadcom confirms to acquire co. for $18.9B in cash or $44.50/share; Broadcom sees the deal as immediately accretive to non-GAAP EPS , closing expected in fourth calendar quarter of 2018

Europe

SKY.UK Comcast raises cash offer for Sky plc to £14.75/shr for £26B implied value (had offered £12.50/shr)
21st Century Fox issues statement in response to increased offer for Sky by Comcast: notes announcement made by Comcast
CNP [CNP.FR]: Says CEO Lavenir has resigned, cites personal reasons
(UK) June RICS House Price Balance: +2% v -4%e

Levels as of 01:30ET

Hang Seng +0.9%; Shanghai Composite +2.3%; Kospi +0.6%; Nikkei225 +1.2%; ASX 200 +1.0%
Equity Futures: S&P500 +0.4%; Nasdaq100 +0.5%, Dax +0.4%; FTSE100 +0.4%
EUR 1.1670-1.1686; JPY 111.92-112.38; AUD 0.7360-0.7484;NZD 0.6748-0.6765
Aug Gold 0.0% at $1,244/oz; Aug Crude Oil +0.7% at $70.89/brl; Sept Copper +1.2% at $2.78/lb