General Trend:
- Chipmakers weigh on Kospi as dispute between Japan/South Korea persists; Ssangyong Motor drops over 6% as loss widened
- Hang Seng declines as China’s HK and Macau Affairs Office (HKMAO) is due to comment on protests for the first time (announcement expected around 7 GMT); Financials lead declines in Hong Kong
- China financials index lags as Bank of Jinzhou received a bailout agreement
- Weaker earnings from Keyence weigh on electronics-related firms in Japan
- Australia ASX 200 index outperforms on Telecoms, Financials and Energy companies
- Rare-earth miner Lynas declined, Q4 revenues dropped on lower prices and strategy to limit sales to strategic customers
- Bubs Australia rises over 4%, Q4 goat milk infant formula sales +341% y/y
- US and China are due to hold trade talks in China on July 30-31 (Tuesday-Wed)
- AUD/JPY and Australian bond yields decline ahead of Wednesday’s Q2 CPI data
- BoJ decision expected on Tuesday
- Fed to hold policy meeting July 30-31 (Tues-Wed)
- Japanese companies expected to report earnings later today include Fanuc and Komatsu
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat
- (AU) Australia Q2 HIA New Home Sales +0.8% q/q (first rise since Q4 2017), new home sales over the year to June -12.4% y/y – US financial press
- LYC.AU Reports Q4 Rev A$87.5M v A$91.7M y/y; NdPr Production: 1.5Kt v 1.3Kt y/y; Production Volume: 4.6Kt v 4.1Kt y/y
- (AU) Consensus expectations suggest Australia Q2 trimmed mean (core) CPI will come in at 1.5% y/y, below the RBA’s May forecast of 1.6%; NAB said any miss in headlined [inflation] may increase market expectations for an Aug rate cut from the current level of ~20% – US financial press
Japan
- Nikkei 225 opened -0.1%
- (JP) Japan Jun Retail Sales M/M: 0.0% v -0.3%e; Y/Y: +0.5% v 0.2%e
- (JP) Japan PM Abe is unlikely to meet with South Korea Pres Moon at UN in Sept unless ‘constructive steps’ are taken by South Korea – Japan Press
- (KR) South Korea sells KRW800B in 3-month Monetary Stabilization Bonds (MSB); avg yield 1.42% v 1.49% prior
Korea
- Kospi opened -0.4%
- (KR) South Korea June exports seen -10% y/y – Yonhap
- (KR) South Korea Govt: Nothing has been decided on sending troops to Hormuz Strait
China/Hong Kong
- Hang Seng opened -0.5%; Shanghai Composite opened flat
- (CN) CHINA JUN INDUSTRIAL PROFITS Y/Y: -3.1% V +1.1% PRIOR
- (CN) China State Administration of Foreign Exchange (SAFE): At the end of 2014 USD assets accounted for 58% of FX reserves v 79% in 2005
- (CN) China Customs: Will allow soybean imports from all parts of Russia
- (HK) On Monday China’s top Hong Kong policy office is expected to respond for the first time to the protests that started in June; The announcement is expected to be the first HKMAO press briefing on HK since the 1997 handover – SCMP
- (CN) China PBOC sets yuan reference rate: 6.8821 v 6.8796 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for 5th consecutive session; Net CNY50B drained v CNY100B drained prior
- (CN) China State media notes that it does not expect any big breakthrough on trade talks with the US this week, reiterates China could wait until 2020 election to make a deal
- (CN) China starts anti-dumping investigation on some chemicals from US, Japan and EU
Other Asia
- DBS.SG Reports Q2 (S$) Net 1.6B v 1.5Be, Rev 3.71B v 3.20B y/y
- (IN) India Fin Min Sitharaman: Significant rate cut over and above 75bps would be good for India – India press
North America
- (US) Former Fed Chair Yellen supportive of 25bps rate cut at FOMC meeting this week due to global economic growth slowdown and inflation – US press
Europe
- (EU) ECB’s Nowotny: See historically low interest rates in the long term – financial press
- (UK) Min Gove (Brexit Supporter): Govt will make “intensive efforts” to get a better Brexit deal; but we must operate on the assumption that they will not and we will have a no deal Brexit and must be ready – Sunday Times Op Ed
- (IR) Iran Official Abbas Araqchi: Emergency meeting with parties related to 2015 nuclear deal were constructive, unresolved issues remain; Iran will continue to reduce its nuclear commitments if Europe cannot save the deal – press
- (UK) Trade Min Truss: Main priority now will be agreeing a Free Trade Agreement (FTA) with the US – Telegraph
Levels as of 1:20 ET
- Nikkei 225, -0.5%, ASX 200 +0.5%, Hang Seng -1.5%; Shanghai Composite -0.3%; Kospi -1.7%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.3%; FTSE100 flat
- EUR 1.1140-1.1124 ; JPY 108.70-108.42 ; AUD 0.6917-0.6902 ;NZD 0.6642-0.6626
- Gold +0.1% at $1,420/oz; Crude Oil -0.1% at $56.12/brl; Copper -0.1% at $2.687/lb
