China NDRC Expects Macroeconomic Policies To Be More Flexible In H2

General Trend:

• Asian equity markets trade mostly lower after mixed US session, Nikkei outperforms after being closed on Monday
• Netflix declines over 14% in afterhours trading, Q2 subscriber adds and Q3 guidance below ests
• Shanghai Composite trades lower for 3rd straight session
• Rio Tinto Q2 iron ore production rises y/y, targets FY production at upper end of prior range
• Japanese automakers higher on a weaker yen
• Tokyo Steel leaves prices unchanged for the 6th straight month
• RBA plays down impact of higher funding costs on banks, noted higher downside risks to global growth (minutes)
• A$ falls to session lows 0.7402 after RBA meeting minutes
• NZ Q2 CPI remains below the mid-point of the RBNZ’s targeted range (1-3%)
• Kiwi (NZD) later rises on acceleration in the RBNZ’s own inflation measure; NZ bond yields rise
• China new home prices accelerate in June
• Analysts begin to update China GDP forecasts amid trade concerns
• Fed’s Powell to hold first day of Congressional testimony (July 17th-18th)
• BHP due to report its Q4 production update tomorrow (July 18th)
• US companies expected to report earnings on Tuesday include: CSX. JNJ, UnitedHealth, UAL, Goldman Sachs

Headlines/Economic Data

Japan

• Nikkei 225 opened flat
• TOPIX Securities index +2.1%, Marine Transportation +2%, Retail Trade +1.5%, Iron & Steel +1.5%, Real Estate +1.3%, Info & Communications +1%
• Automakers and megabanks trade generally higher
• Line, 3938.JP Cryptocurrency exchange BitBox starts operation
• (JP) Japan Fin Min Aso: High chance of US and China trade tensions impacting others

Korea

• Kospi opened flat
• (KR) South Korea govt considering increased cash subsidies for smaller businesses in order to help ease the burden of higher payroll costs following 11% minimum wage increase for 2019 – Korean press
• (US) President Trump: Relationship with North Korea is “very good”

China/Hong Kong

• Hang Seng opened -0.3%, Shanghai Composite -0.3%
• Hang Seng Consumer Goods index -1.5%,Energy -1.5%, Info Tech -1.4%, Services -1.3%, Financials -0.8%, Property/Construction -0.6%
• (CN) China yuan currency is unlikely to further fall ‘significantly’ – China Securities Journal
• (CN) China outbound foreign direct investment (OFDI) has shifted towards Europe from North America in H1 – Xinhua
• (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day and 14-day reverse repos v CNY300B prior; Net: CNY90B injects v CNY300B injection prior
• (CN) China PBoC set yuan reference rate at 6.6821 v 6.6758 prior (weakest setting since Aug 2017)
• (CN) China Jun New Home Prices m/m: +1.0% v 0.8% prior; y/y: 5.0% v 4.7% prior
• (CN) China Q2 Industrial Capacity Utilization q/q: 76.8% v 76.5% prior
• (CN) UBS sees China 2018 GDP growth forecast at 6.5% v 6.6% prior, revises 2019 GDP growth forecast to 6.2% v 6.4% prior – US financial press
• (CN) China NDRC: Expects prices and economy to remain stable in H2; In H1 approved 102 fixed asset investment projects worth CNY260.3B

Australia/New Zealand

• ASX 200 opened -0.1%
• ASX 200 Energy index -2.2%, Resources -1.4%, Utilities -1.4%, Consumer Discretionary -0.7%, Telecom -0.5%; Financials flat
• RIO.AU Reports Q2 Pilbara Iron ore production 85.5Mt v 79.8Mt y/y; Shipments 88.5Mt v 88.4Me v 77.7Mt y/y; Guides FY18 Pilbara iron ore shipments higher end of prior 330-340Mt
• (NZ) New Zealand Jun Performance Service Index: 52.8 v 57.3 prior
• (NZ) NEW ZEALAND Q2 CPI Q/Q: 0.4% V 0.5%E; Y/Y: 1.5% V 1.6%E
• (NZ) New Zealand RBNZ Q2 Sectoral Factor Model Inflation y/y: 1.7% v 1.6% prior
• (AU) RESERVE BANK OF AUSTRALIA (RBA) JULY MEETING MINUTES: REITERATES NO STRONG CASE FOR NEAR-TERM ADJUSTMENT IN MONETARY POLICY, NEXT MOVE LIKELY TO BE UP RATHER THAN DOWN

Other Asia

• (SG) Singapore Jun Non-Oil Domestic Exports M/M: -10.8% v -8.7%e; Y/Y: +1.1% v +7.8%e; Electronic Exports Y/Y: -7.9% v -7.8% prior

North America

• NFLX Reports Q2 $0.85 v $0.79e, Rev $3.91B v $3.94Be; Guides Q3 $0.68 v $0.71e, total Rev $3.99B v $4.14Be, total streaming Rev $3.90B, domestic streaming Rev $1.93B, international streaming Rev $1.97B; net operating margin 10.5% (-14% afterhours)
• ACET Subsidiary Acetris Health receives favorable ruling regarding certain government contracts (+12% afterhours)
• AMZN Reports 1st 3-hrs of Prime Day sales +54% y/y even with tech issues

Europe

• (UK) PM May wins Brexit amendment vote in House of Commons; vote 305 to 302; passes VAT amendment proposed by Brexiteer Conservatives and supported by PM May; vote was 303 to 300
• (RU) Russia President Putin: Told Trump that Russia is ready to extend the start of nuclear treaty but we have to agree on specifics – Fox News

Levels as of 01:30ET

• Hang Seng -1.1%; Shanghai Composite -1.0%; Kospi 0.0%; Nikkei225 +0.8%; ASX 200 -0.6%
• Equity Futures: S&P500 +0.0%; Nasdaq100 -0.1%, Dax 0.0%; FTSE100 0.0%
• EUR 1.1613-1.1726; JPY 112.23-112.57; AUD 0.7402-0.7438;NZD 0.6757-0.6841
• Aug Gold +0.1% at $1,241/oz; Sept Crude Oil 0.0% at $67.08/brl; Sept Copper +1.0% at $2.79/lb