Trump And Xi Held Phone Conversation

Jun 19 19, 06:45 GMT

General Trend:

China brokerage firms rise following meeting with regulators
Apple suppliers rise in Hong Kong on Trump/Xi phone conversation
Resources firms outperform in Australia, China iron ore futures rise over 5%
Nomura rises over 8% on buyback
China PBOC again offers more MLF funds than current maturities
PBOC announces size of planned bill issuance in Hong Kong
South Korea may delay adjustment to economic forecasts, no reason initially given (local press)
Japan exports decline for 6th straight month, exports to Asia -12.1% y/y (China -9.7%)
Japan’s May trade deficit with the EU was the largest on record, exports to the EU -7.1% y/y
JGB Futures rise amid focus on recent comments from ECB’s Draghi, upcoming central bank meetings
Japan 10-year JGB yields decline toward lower end of the BoJ’s yield curve control (YCC) range
Bank of Japan (BOJ) due to announce rate decision on Thursday (June 20th)
RBA Gov Lowe expected to speak on Thursday (0115 GMT) about labor markets and spare capacity
NZ to release Q1 GDP on Thursday
US Fed decision expected later today

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.3%
(NZ) NEW ZEALAND Q1 CURRENT ACCOUNT BALANCE (NZ$): +68M V +2ME; CURRENT ACCOUNT TO GDP RATIO YTD: -3.6% V -3.5%E
GPT.AU Announces A$800M placement for acquisition; proposes acquisition of 25% stake in Darling Park property for A$531M; Cuts FY19 FFO/share growth guidance to 2.5% (guided +4% prior)
GBT.AU Received revised higher proposal from Bravura Solutions for A$2.72/shr (prior A$2.50/shr)
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -3.8% v -3.4% prior (3rd consecutive decline)
(AU) Australia sells A$2.0B v A$2.0B indicated in 1.50% June 2031 bonds, avg yield 1.4307% v 1.6073% prior, bid to cover 2.43x v 3.29x prior

Japan

Nikkei 225 opened +1.2%
(JP) Japan MOF Asakawa (Japan’s top currency official): Maintaining G20 policy coordination is difficult compared to when G20 began and during crisis – speaking in Tokyo
(JP) JAPAN MAY TRADE BALANCE: -¥0.97T V -¥1.20TE; ADJUSTED TRADE BALANCE: -¥609.1B V -¥754.5BE; Exports Y/Y: -7.8% v -8.2%e (6th consecutive decline); Exports to China -9.7% y/y; US +3.3% y/y; EU -7.1% y/y; Asia -12.1% y/y
7201.JP Reportedly proposing creation of a new board committee with seats for alliance partner Renault’s Chairman and CEO – Nikkei; Follow Up: Renault to accept Nissan proposal for altered board appointments – Japanese Press
(PM) Japan PM Abe will not hold one on one meeting with South Korea President Moon at G20 – Japan
6740.JP Continues talks with TPK on LCD alliance; havent got proposal for direct tie up with Oasis
9984.JP CEO: Vision Fund 1 will be ended pretty soon, most of its investors want to join Vision Fund 2, so will start discussing with them – AGM

Korea

Kospi opened +1.0%
(KR) Fitch cuts 2019 GDP outlook to 2.0% from 2.5% seen in Feb due to weaker underlying momentum
(KR) Bank of Korea (BOK) May Minutes: Worried about slower than expected GDP for the remainder of the year, may not meet 2.5% GDP target in 2019
(KR) South Korea thought to delay adjustment to economic forecasts until July – Korean press
(CN) China President Xi Op Ed in Rodong Sinmun newspaper ahead of state visit: North Korea is taking the “right direction” by politically resolving issues on the Korean Peninsula
(KR) Bank of Korea (BOK) sells 2-year Monetary Stabilization Bonds (MSB); avg yield 1.50% v 1.585% prior

China/Hong Kong

Hang Seng opened +2.6%; Shanghai Composite opened +1.9%
(CN) Pres Trump tweets: “Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.”; China State media confirms the call between Xi and Trump
(CN) China PBoC offers CNY240B 1-year medium term lending facility (MLF) v CNY200B due to mature today at 3.3% v 3.3% prior
(CN) China PBoC sets yuan reference rate: 6.8893 v 6.8942 prior
(CN) China PBoC Open Market Operation (OMO): Injects CNY40B in 14-day reverse repos v CNY90B prior; Net CNY25B injected v CNY80B injected prior
(HK) Hong Kong Chief Executive Lam issued a personal apology to HK public, asked for another chance, indicated that HK is unlikely to try and revive the China extradition bill – speaking at press conference

North America

(US) Weekly API Oil Inventories: Crude: -0.8M v +4.9M prior
X Guides Q2 $0.40 v $0.48e, cuts Q2 adj EBITDA $250M (prior ~$285M); idling two blast furnaces in the US and one blast furnace in Europe to better align global production with order book
JNJ Ordered by judge in California to face possible punitive damages related to trial for TALC poisoned woman – US financial press
(US) President Trump asked White House lawyers on options for removing Fed Chair Powell, they found removal would be very questionable

Europe

(EU) ECB’s Draghi: Committed to price stability objective; more rate cuts are part of tool kit; If outlook does not improve then additional stimulus will be needed – speaking at ECB forum in Sintra
(EU) ECB POLICYMAKERS SAID TO BE DIVIDED ON NEXT STEP; RATE CUT, GUIDANCE CHANGE AND FURTHER QE ALL POSSIBILITIES – PRESS
(UK) Labour’s Corbyn (opposition) expected to back Labour move to change its Brexit policy and support second referendum in all circumstances – UK press

Levels as of 01:20ET

Hang Seng +2.5%; Shanghai Composite +1.6%; Kospi +1.3%; Nikkei225 +1.7%; ASX 200 +1.1%
Equity Futures: S&P500 +0.0%; Nasdaq100 +0.1%, Dax +0.0%; FTSE100 -1.0%
EUR 1.1187-1.1203; JPY 108.34-108.62 ; AUD 0.6871-0.6886; NZD 0.6525-0.6539
Commodity Futures: Gold -0.1% at $1,349/oz; Crude Oil +0.4% at $54.31/brl; Copper 0.0% at $2.71/lb