China Reiterated US And China Teams Are Making Preparations For Trump/Xi G20 Meeting

Jun 24 19, 06:36 GMT

General Trend:

Chinese high-performance computer maker Dawning Information addressed press speculation about US restrictions on supercomputing technology
Chinese telecom equipment firms underperform on concerns about possible US 5G restrictions; ZTE -2.7%
Aussie outperforms as RBA Gov Lowe spoke and USD trades generally weaker; Traders focused on expected G20 meeting between Trump and Xi
Gold Futures extend gain in the face of US dollar weakness and Iran concerns
The G20 leaders meeting is due to be held in Osaka from June 28-29th (Friday-Saturday)
China and US negotiating teams could meet as soon as Tues (June 25th) – Chinese press
The Reserve Bank of New Zealand (RBNZ) is due to hold its official cash rate (OCR) decision on June 26th (Wed)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.2%
(AU) RBA Gov Lowe: Risks to global economy are tilted to the downside; legitimate to ask how effective monetary easing would be globally; if everyone is easing, the impact on exchange rates is offset
(NZ) Reserve Bank of New Zealand (RBNZ) rate cut is fully priced in for the Aug 2019 meeting – US financial press

China/Hong Kong

Shanghai Composite opened +0.1%, Hang Seng -0.3%
(CN) China confirmed President Xi to attend G20 summit in Osaka from June 27th to June 29th – Xinhua
(CN) China Vice Commerce Min: Confirms US and China trade teams are having discussions; both China and US should make compromises in trade talks
(CN) China Assistant Foreign Min: Confirms China and US teams are making preparations for Xi, Trump [G20] meeting
(US) VP Pence said to postpone China policy address indefinitely amid “positive signs” of progress ahead of Trump/Xi meeting – press
(US) US said to consider requiring 5G equipment for domestic use to be made outside of China – US financial press
(CN) US Commerce Dept to issue new export restrictions on China supercomputing technology – press
(CN) China PBoC Dep Gov Gousheng: Policy room for countries to deal with economic slowdown is limited
(CN) China PBoC sets yuan reference rate: 6.8503 v 6.8472 prior
(CN) China PBoC Open Market Operation (OMO): Skips OMO v CNY30B prior; Net Nil v CNY30B injected prior
(CN) China volume-weighted avg benchmark overnight repo rate declines below 1.00% (10-year low); 7-day repo rate declines to 1.10% (over 4-year low)
HSBC: Raises HK$ denominated 3-month, 6-month, and 12-month time deposit interest rates; Lowers USD$ denominated 12-month and 18-months time deposit interest rates

Japan

Korea

Kospi opened +0.2%
(KR) South Korea sells KRW506B v KRW500B indicated in 20-year bonds: avg yield: 1.605% v 1.83% prior

Other

(IN) Reserve Bank of India (RBI) Deputy Gov Acharya said to resign 6 months before his term ends- Indian Press

North America

(US) Markets are pricing in a 28% chance of 50bps US Fed rate cut in July – US financial press
(US) Fed’s Harker (hawk, non-voter) did not comment on economic nor monetary policy outlook at event in Colorado
(IR) Pres Trump: moving ahead with additional sanctions on Iran aimed at preventing it from getting a nuclear weapon; military action is still on the table
Fedex [FDX]: Said an operational error prevented one of Huawei’s packages from being delivered to the US; China Global Times said Fedex is likely to be added to China’s ‘unreliable entities’ list

Europe

(IT) EU expected to pause budget crackdown on Italy, EU to this week hold off on launching disciplinary process against Italy – FT
(TU) Turkey opposition CHP party won the Istanbul mayoral election, CHP candidate Imamoglu is leading by a 54% to 45% margin over the ruling AKP (99% of the ballots counted) – FT
Daimler [DAI.DE]: Cuts Mercedes-Benz Vans FY19 outlook: Now sees FY19 Group EBIT to be in the magnitude of the prior year; Guides Mercedes-Benz Vans FY19 return on sales -4% to
2% (vs 0 to +2% prior) ; Notes increase in provisions

Levels as of 1:20 ET

Nikkei 225, +0.2%, ASX 200 flat, Hang Seng +0.1%; Shanghai Composite -0.1%%; Kospi flat
Equity Futures: S&P500 +0.3%; Nasdaq100 +0.4%, Dax +0.3%; FTSE100 +0.3%
EUR 1.1387-1.1367 ; JPY 107.45-107.26 ; AUD 0.6962-0.6926 ;NZD 0.6602-0.6587
Gold +0.4% at $1,405/oz; Crude Oil +0.7% at $57.84/brl; Copper +0.1% at $2.704/lb