General Trend:
- ZTE and IT shares rise in Shanghai, these companies declined on Friday’s session amid the Huawei concerns
- Cathay Pacific drops over 4%, warned by officials in China regarding HK protests
- HSBC declines amid focus on protests in HK, recent management changes
- Aussie miners weighed down by declines in Chinese iron ore prices
- Australian corporate earnings in focus: Retailer JB Hi-Fi rises over 7% on better than expected earnings , Ansell (medical supplies co.) gains on guidance
- New Zealand milk producer Fonterra drops over 4% on expected write-downs
- Offshore yuan (CNH) rises after stronger than expected fix for the Chinese currency
- China PBOC continues to leave money market rates unchanged despite late-July US Fed rate cut
- Decline in South Korea’s chip exports and overall imports worsened in early Aug, spat between Japan/South Korea and concerns related to US/China trade linger
- NZ PM addresses concerns about gov’t capacity for fiscal stimulus after recent RBNZ rate cut
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- (NZ) New Zealand Treasury Paper: Reserve Bank of New Zealand (RBNZ) could cut official cash rate (OCR) to -0.35% in a crisis; sees asset purchases as a less appealing tool
- FCG.NZ Affirms FY19 underlying EPS 0.10-0.15; advises on significant adverse one-off accounting adjustment of NZ$820-860M resulting in Net loss NZ$590-675M, Loss NZ$0.42-0.37; will pay no dividend in FY19
- MRN.AU Nine Entertainment offers A$1.46/shr for A$275.4M
- (NZ) New Zealand July Total Card Spending M/M: -0.3% v 0.1% prior; Retail Card Spending M/M: -0.1% v 0.5%e
- (AU) Australia sells A$400M v A$400M indicated in 3.25% June 2039 bonds, avg yield 1.4105%, bid to cover 2.4
- (NZ) New Zealand PM Ardern: NZ economy is in good shape; lower interest rates is a global phenomenon and is good news for borrowers; mindful of role that government plays in stimulating the economy
- (AU) Australia Port Hedland July Iron Ore exports 41.0Mt v 48.9Mt m/m; Exports to China 34.5Mt v 42Mt m/m
Japan
- Nikkei 225 closed for holiday
- (JP) South Korea Pension Fund is considering not investing in Japan companies that are possibly involved in ‘war crimes’ – FT
- 7203.JP Planning to build new factory to expand battery capacity, which will allow production of hybrid vehicles to increase in China – Nikkei
- 6758.JP Sony CFO: see upside for semiconductor sales; seeing solid demand in smartphone market – Nikkei
Korea
- Kospi opened +0.2%
- (KR) North Korea threatens to freeze any future talks with South Korea and only hold them with the US as retaliation to US/South Korea military drills
- (KR) South Korea responds to North Korea: Joint military drills with US do not violate agreements with North Korea
- 005930.KR Started sourcing extreme ultraviolet photo resist, a compound used in the chip-making process, from a Belgian company – Nikkei
- (KR) South Korea Industry Min: To remove Japan from ‘white list’ of countries and create new designated category for Japan in September; ready to talk to Japan ‘anytime, anywhere’
China/Hong Kong
- Hang Seng opened -0.3%; Shanghai Composite opened +0.3%
- (CN) China PBOC payments Deputy Chief Mu Changchun: China’s own cryptocurrency is almost ready to release – press citing comments from China Financial Forty People Yichun Forum
- (CN) China PBoC Open Market Operation (OMO): Injects CNY30B in 7-day reverse repos v skip prior; Net CNY30B injected v skip prior (1st injection after 13 consecutive skips)
- (CN) CHINA PBOC SETS YUAN REFERENCE RATE: 7.0211 V 7.0136 PRIOR
- (CN) PBoC Dir General of international dept. Zhu Jun reiterated volatility in the Yuan currency since Aug is normal market reaction to escalating trade frictions related to the US – financial press
- (CN) Analysts not that China Politburo has made no major announcement of additional monetary or economic stimulus to offset the effect of higher tariffs, so it is expected that consumer spending will continue to weaken for the rest of the year – SCMP
- (CN) China Foreign ministry commissioner’s office in Hong Kong: US is using “gangster logic” after US said China is a “thuggish regime” – SCMP (update)
- (CN) China Q2 Preliminary Current Account: $57.0B v $49.0B prior (Friday after the close)
- (CN) IMF annual report on China: escalation in trade tensions would justify more stimulus; risks are tilted to the downside; China should maintain flexible yuan if tariffs increase; China could intervene to support the yuan in case of an adverse scenario (Friday after the close)
Other Asia
- (TW) Taiwan may only raises minimum wage by 3% (prior 3-5%) in 2020,amid US/China trade war and global slowdown; wage review committee to hold meeting Aug 14th – Taiwan press
North America
- (US) On Saturday morning financier Jeffrey Epstein was found dead in NYC jail cell, the death has been called an apparent suicide – Press
- (US) Goldman analysts note that US China trade war is leading towards a recession, does not see a deal reached before 2020 President elections in the US
Europe
- OSR.DE AMS makes €38.50/shr offer; to be accretive to ams’ EPS from the first year post completion; returns expected to exceed ams’ cost of capital from the second year post completion
- ABBN.CH Names Björn Rosengren (of Sandvik) as CEO, effective Feb 1 2020 (as speculated)
- (UK) Follow Up: UK Labour Party MPs told to cancel travel plans for Sept, Corbyn said to prepare to table no confidence vote – UK Press
- (UK) Members of Parliament said to plan to force PM Johnson to ask for Brexit extension – Financial Press
- (IT) Fitch affirms Italy sovereign rating at BBB; outlook Negative (from Aug 9th)
Levels as of 01:20ET
- Hang Seng -0.2%; Shanghai Composite +0.5%; Kospi +0.3%; Nikkei225 closed for holiday; ASX 200 -0.3%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.0%; FTSE100 -0.1%
- EUR 1.1199-1.1210; JPY 105.32-105.69; AUD 0.6771-0.6796; NZD 0.6439-0.6475
- Commodity Futures: Gold -0.1% at $1,507/oz; Crude Oil -0.3% at $54.33/brl; Copper -0.1% at $2.59/lb
