Asian Markets Trade Mixed After Declines On Monday

Jul 09 19, 05:51 GMT

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

ASX 200 opened flat
(AU) AUSTRALIA JUN NAB CONFIDENCE: 2 V 7 PRIOR; BUSINESS CONDITIONS: 3 V 1 PRIOR
(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

Japan

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 MAY LABOR CASH EARNINGS Y/Y: -0.2% V -0.6%E; REAL CASH EARNINGS Y/Y: -1.0% V -1.5%E
(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

Korea

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

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)

Europe

(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