General Trend:
- New Zealand June trade balance saw a larger than expect deficit, imports came in at a 16 month low; fuel imports fell 39% and vehicle imports fell 16%
- AUD fell 0.4% after Westpac moved up time line for projected RBA rate cuts to 0.75% in October and 0.5% in Feb 2020
- In a Chinese press interview, China PBOC Gov Yi Gang reiterated China is not likely to follow US Fed rate cut; China’s interest rates are at an appropriate level, CPI is modestly positive
- China Commerce Min Zhong Shan to meet with US trade officials next week when they comes to Shanghai; talks will cover a broad range of issues
- Iron ore in the region lower as Vale given govt approval to restart some of its processing capacity
- KRW weakens against the USD as trade tensions with Japan continue to escalate, Japan threatens to remove South Korea from its White List
- China released its first defense white paper since 2015 accusing the US of undermining global strategic stability by changing its national security and defense strategy. Uutlines the Chinese military’s plans to increase cyber capacity and threatens use of military force against Taiwan ‘separatists’
- Russia voiced “deep regret” over the airspace intrusion into Korean airspace. Japan claims that the airspace is actually Japanese. China claims that the joint Russia/China air patrol did not enter any nation’s sovereign airspace
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened %
- (AU) Australia July Preliminary PMI Manufacturing 51.4 v 52.0 prior
- (AU) Australia Westpac forecasts RBA cut to 0.75% in Oct (prior Nov); 0.5% in Feb 2020
- ILU.AU Reports Q2 total mineral sands production 251.3Kt v 281.4Kt y/y; Mineral Sands Rev: A$295.2M v A$344.9M y/y
- BPT.AU Reports Q4 production 6.97MMBOE v 7.23 MMBOE q/q; Rev $501M v $471M y/y
- PEA.AU Receives offer of A$0.975/shr from QIC Private Capital subsidiary QGIF Swan Bidco Pty Ltd
- (NZ) New Zealand Jun Trade Balance (NZ$): 365M v 100Me
- (NZ) New Zealand June beef exports to China nearly doubled to NZ$1.2B, as NZ replaces US as a source for beef amid US China trade dispute
Japan
- Nikkei 225 opened +0.5%
- (JP) Japan Cabinet Sec Suga: Want to push further ahead with prioritizing the economy; want to invite China President Xi for official visit early next year
- (JP) Japan PM Abe Adviser Hamada: If Fed acts BOJ may need to do something for yen; concerned about yen nearing 100 – Nikkei
- (JP) BOJ said to cut current fiscal year CPI forecast at its upcoming policy meeting – financial press
- 8227.JP Reports Jul SSS -17.5%
- (JP) Japan July Preliminary PMI Manufacturing: 49.6 v 49.3 prior
- 7201.JP Reportedly plans to cut over 10K jobs globally, in additional to prior announced cuts – Japanese press
Korea
- Kospi opened -0.2%
- (KR) US Pentagon expressed its strong support for South Korea and Japan in their response to “airspace incursions” by Russia and China warplanes – Yonhap
- (KR) South Korea Trade Ministry: Urges Japan to stop attempts to remove it from white list, prepared for talks at any time , anywhere with Japan – submits statement of arguments to Japan
- 034220.KR Reports Q2 (KRW) Net -548.4B v -237.4Be, Op -368.7B v -263.4Be, Rev 5.35T v 5.90Te (after the close yesterday)
- Looking ahead: Expecting earnings results from Hynix tomorrow
China/Hong Kong
- Hang Seng opened +0.4%; Shanghai Composite opened +0.3%
- (CN) China PBOC Gov Yi Gang: Reiterates China is not likely to follow US Fed rate cut; China’s interest rates are at an appropriate level, CPI is modestly positive – Caixin
- (CN) China PBOC sets yuan reference rate: 6.8860 v 6.8818 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for 2nd consecutive session; Net CNY100B drained v CNY164.3B drained yesterday via TMLF and MLF operations
- (CN) China punishes and bans 29 funds for tech board IPO violations, banned for up to 1 year – Chinese press
- (CN) China releases white paper accusing US of undermining global strategic stability by adjusting its national security and defense strategy; US has provoked competition among major countries; US had adjusted national security and defense strategy
- 522.HK Reports H1 (HK$) Net 179.5M v 1.4B y/y; Rev 7.3B v 9.6B y/y
- (CN) China CICC: China lost ~5.0M factory jobs recently, due to trade tensions with US, including 1.5M lost due to increased US tariffs at the end of May
Other
- IMF UPDATES ITS WORLD ECONOMIC OUTLOOK (WEO): cuts 2019 GLOBAL GDP GROWTH FORECAST FROM 3.3% TO 3.2%
North America
- S DISH reportedly agreed to acquire $5B in assets from Sprint/T-Mobile, which would clear the way to regulatory approval for Sprint/T-Mobile deal, which could comes as soon as Thursday – US financial press
- (CN) US NEGOTIATING TEAM REPORTEDLY TO HEAD TO CHINA ON MONDAY FOR FACE-TO-FACE TRADE TALKS; Group to be headed by US Trade Rep Lighthizer, who will bring a small team with him, The talks are expected to extend through Wed – PRESS
- (US) Weekly API Oil Inventories: Crude: -11M v -1.4M prior
Europe
- (UK) RESULTS OF CONSERVATIVE PARTY LEADERSHIP VOTE: Boris Johnson elected as party leader (as expected); to become Prime Minister after May steps down on Wed, July 24th
- DAI.DE Reports Q2 Net -€1.2B v +€1.8B y/y, EBIT -€1.6B v +€2.6B y/y, Rev €42.7B v €40.8B y/y
- DBK.DE Reports Q2 adj Net €1.7B v €1.8B y/y, Pretax -€946M v €711M y/y, Rev €6.2B v €6.6B y/y
Levels as of 01:20ET
- Hang Seng +0.6%; Shanghai Composite +0.9%; Kospi -0.7%; Nikkei225 +0.3%; ASX 200 +0.7%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.3%, Dax -0.0%; FTSE100 -0.2%
- EUR 1.1143-1.1156; JPY 108.12-108.28 ; AUD 0.6977-0.7009; NZD 0.6692-0.6704
- Commodity Futures: Gold -0.2% at $1,419/oz; Crude Oil +0.3% at $56.95/brl; Copper -0.2% at $2.70/lb
