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
