General Trend:

  • Financials rise in Japan, chip-related shares decline amid focus on South Korea
  • Geely declines in Hong Kong on reduction in sales forecast
  • ANTA Sports’ shares volatile in HK after report by Muddy Waters
  • South Korea and Japan trade concerns persist; The two countries may soon hold talks (Japanese press)
  • South Korea’s LG Chemical is conducting scenario planning regarding restrictions proposed by Japan
  • Australia APRA eases bank capital proposal
  • Monthly wages continue to decline in Japan
  • Japan’s Mizuho cut long-term prime rates (last cut rates in 2016)
  • Markets still awaiting specific date for face-to-face US/China trade talks

Headlines/Economic Data

Australia/New Zealand

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  • ASX 200 opened flat
  • (AU) APRA responds to submissions for plans to support loss-absorbing capacity of major Australia banks: To require big banks to raise capital by 3 ppts of risk weighed assets (RWAs) by Jan 1 2024 vs 4-5 ppts under initial proposal
  • (NZ) New Zealand Deputy PM Peters: Govt can take credit for lower NZ$, confidence levels are low even though the government’s performance rating is “so much higher” than its predecessor – NZ interview
  • (AU) Australia Treasurer Frydenberg expressed opposition to additional economic stimulus following tax cuts – Press


  • Nikkei 225 opened +0.3%
  • (JP) Japan safety standards for nuclear power are proving cost prohibited at ~¥4.8T per site to bring up to new code; which may dampen Japan’s push to promote nuclear energy – Nikkei
  • (KR) Japan Trade Min Seko: Not thinking of withdrawing export restrictions on South Korea; Whether we take additional export restrictions is depending on South Korea’s response
  • NTDOY Plans to shift Switch console production to Vietnam from China; affirms FY19 Switch sales at 18M units – Nikkei
  • 6178.JP Seeking to raise postal prices, due to sales tax increase planned for Oct – press
  • (JP) Japan Cabinet Sec Suga: South Korea did request Japan to provide explanation over export curbs; reiterates not considering backing down on export restrictions
  • (JP) Japan Fin Min Aso reiterates will raise sales tax unless there is a Lehman level crisis, not considering raising sales tax beyond 10% at this point
  • (JP) Japan MoF sells ¥1.9T v ¥1.9T prior in 0.1% coupon 5-year JGB: avg yield: -0.233% v -0.228% prior, bid to cover: 4.34x v 4.51x prior


  • Kospi opened +0.3%
  • (KR) South Korea President Moon: Urges Japan to withdraw export curbs; concerned over production setbacks from curbs
  • 005930.KR Recently Apple paid KRW800B for unfilled OLED orders it was guaranteed – Korean press
  • (JP) Japan and South Korea planning to talk about exports as soon as this week – Japan press
  • 051910.KR Not yet impacted by Japan export controls, but planning for it, Targeting 20204 Rev KRW59.0T v KRW30.0T 2019 target

China/Hong Kong

  • Hang Seng opened -0.1%; Shanghai Composite opened -0.2%
  • (CN) China Jun retail car sales 1.8M units, +4.9% y/y (first rise in 13 months) – PCA
  • (CN) Former PBoC official Sheng Songcheng: ‘weak’ US dollar to help stabilize yuan; yuan will rise over the long term due to economic growth potential – China press
  • 175.HK Reports June Sales Volume +1% m/m, -29% y/y; Cuts FY19 Sales volume target 10% 1.4M units (prior 1.5M units)
  • (CN) Nikkei analysts see China Q2 GDP at 6.2% y/y, which would be the weakest pace since 1992, due to impact of US trade war
  • (CN) China PBoC Open Market Operation (OMO): Skips for the 12th consecutive; Net nil injection/drain
  • (CN) China PBOC sets yuan reference rate: 6.8853 v 6.8881 prior
  • (HK) Hong Kong Chief Exec Lam: Reiterates work on China extradition bill has stopped
  • (CN) China Intellectual Property (IP) Regulator: H1 Foreign patent applications in China +8.6% y/y; applications of chip design +45.7% y/y

Other Asia

  • (TW) US approves $2.0B in arms sales to Taiwan including Abrams tanks

North America

  • (US) The Bipartisan Policy Center (think tank) said the US government could breach debt ceiling by the first half of Sept 2019 (earlier than prior projections); debt ceiling still seen as mostly likely to be hit in early Oct 2019 – Press
  • (US) Trump Administration rule requiring drug prices to be shown in TV ads halted by US judge – financial press
  • (UK) Pres Trump: We will no longer deal with UK Ambassador to the US (after critical comments made by the ambassador of Trump leaked)


  • (DE) German Christian Democrats (CDU) leader Annegret Kramp-Karrenbauer (AKK): ECB low interest rate policy is causing problems for savers and thought should be given to curbing its duration – financial press
  • (UK) More than 50% 0f UK businesses with non-British staff say they would be harmed by post-Brexit immigration plans – BBC
  • (UK) Jun BRC Sales LFL Y/Y: -1.6% v -1.1%e
  • (UK) Prime Min May spokesperson: Ambassador Darroch retains the full support as UK Ambassador to the US

Levels as of 1:20 ET

  • Nikkei 225, flat, ASX 200 -0.2%, Hang Seng -0.8%; Shanghai Composite -0.4%; Kospi -0.1%
  • Equity Futures: S&P500 -0.3%; Nasdaq100 -0.5%, Dax -0.2%; FTSE100 -0.2%
  • EUR 1.1220-1.1209; JPY 108.89-108.67 ; AUD 0.6977-0.6953 ;NZD 0.6632-0.6621
  • Gold -0.3% at $1,396/oz; Crude Oil -0.4% at $57.45/brl; Copper -0.4% $2.648/lb
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