HomeContributorsFundamental AnalysisRBA Leaves Rates On Hold, Sees CPI A Bit Lower

RBA Leaves Rates On Hold, Sees CPI A Bit Lower

General Trend:

  • Asian equity markets trade mixed
  • Chinese equities move higher in early trading
  • Shanghai Composite Property index rises over 2.5%
  • Large Nikkei component Softbank rises over 6% post earnings
  • China Tower confirmed that HK IPO to price at the lower end of the expected range
  • Japan wage data accelerates in June
  • RBA sees Q3 CPI a little lower than expected on one-off factors
  • ASX remains under pressure from mining names
  • Expected earnings report from BHP in focus
  • China July FX reserves data may be released later today, trade balance seen later during the week

Headlines/Economic Data

Japan

  • Nikkei 225 opened flat
  • TOPIX Info & Communications index +2.1%, Iron & Steel +1.1%, Marine Transportation +0.6%
  • (JP) Japan FSA said to have started on-site inspections of certain regional banks – Japanese Press
  • (JP) Japan Jun Household Spending m/m: 2.9% v 1.7%e; y/y: -1.2% v -1.4%e
  • (JP) Japan Jul Labor Cash Earnings y/y: 3.6% v 1.7%e; Real Cash Earnings y/y: 2.8% v 0.9%e (fastest rise since Jan 1997)
  • (JP) Japan BoJ board said to have considered raising rates before tweaking policy – financial press
  • (JP) Capital Economics says the rise in Japan’s June wage data was mostly due to larger contribution from bonus payments which could more reflect strong corporate profits as opposed to tightness in the labor market – US financial press
  • (JP) Japan MoF sells ÂĄ399.6B v ÂĄ400B indicated in 10-yr 0.1% inflation-indexed bonds; highest yield -0.309%; bid to cover 3.12x v 4.02x prior

Korea

  • Kospi opened +0.2%
  • 005930.KR Deputy PM and Fin Min Kim calls on company to make more effort in improving governance and discarding unfair trade, while working for job creation and innovative growth; Samsung asks for more deregulation in bio sector and holds off on investment plan announcement – Korean press
  • (KR) North Korea thinks there is a “strong possibility” of a second summit with President Trump and Kim Jong Un – press
  • (KR) South Korea Govt to ease progressive charge in electricity bills, to temporarily ease power tariff in July and August – Korean press

China/Hong Kong

  • Hang Seng opened +0.3%, Shanghai Composite +0.2%
  • Hang Seng Energy index +2.6%, Property/Construction +2.6%, Materials +1.5%, Consumer Goods +1.4%, Industrials +1.3%, Services +0.9%, Financials +0.7%,
  • China Tower, 788.HK Prices 43.1B shares at HK$1.26/shr v HK$1.26-1.58/shr indicated; 1.36x oversubscribed
  • (CN) China to ‘soon’ adopt policies to increase investment and credit – Chinese Press
  • (CN) China 2018 railway investment seen > CNY800B – Chinese Press
  • (CN) China PBoC Open Market Operation (OMO): Skips OMO for the 13th straight session
  • (CN) CHINA PBOC SETS YUAN REFERENCE RATE AT 6.8431 V 6.8513 PRIOR

Australia/New Zealand

  • ASX 200 opened -0.1%
  • ASX 200 Telecom index -1.4%, Consumer Discretionary -1.1%, Resources -0.5%, Financials -0.3%; Energy +0.7%
  • (NZ) New Zealand Shadow Board: Conditions do not warrant change in RBNZ rate
  • (AU) Australia Jul AiG Performance of Construction Index: 52.0 v 50.6 prior
  • (AU) Australia Treasurer Morrison: Will enforce additional changes to support ASIC, to receive additional A$70M in funding
  • (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 118.9 v 119.8 prior
  • Amcor, [-4%], BMS To be acquired by Amcor for $57.75/shr in all-stock deal valued at $6.8B; combined company to list on NYSE, ASX
  • (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED

Other Asia

  • (PH) Philippines Jul CPI m/m: 0.5% v 0.6% prior; y/y: 5.7% v 5.5%e

North America

  • US equity markets ended higher: Dow +0.2%, S&P500 +0.4%, Nasdaq +0.6%, Russell 2000 +0.7%
  • S&P500 Telecom +1%
  • SPDR Gold Trust ETF daily holdings -0.8% at 788.7 metric tonnes

Europe

  • (UK) Jul BRC Sales LFL y/y: 0.5% v 1.5%e
  • (TR) Delegation of officials from Turkey said to plan to go to the US in 2 days; Turkey and the US said to reach pre-agreement on certain issues including sanctions – CNN

Levels as of 01:30ET

  • Hang Seng +0.8%; Shanghai Composite +1.3%; Kospi +0.3%; Nikkei225 +0.6%; ASX 200 -0.4%
  • Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 +0.2%
  • EUR 1.1551-1.1564; JPY 111.23-111.42; AUD 0.7382-0.7400;NZD 0.6725-0.6735
  • Dec Gold +0.0% at $1,218/oz; Sept Crude Oil +0.0% at $69.03/brl; Sept Copper +0.4% at $2.74/lb
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