General Trend:

  • Hang Seng underperforms due to protests; decliners include airlines, financials and gaming companies
  • Financials decline in Shanghai as monthly M2 and bank lending data missed ests; Property index also drops
  • ZTE declines in Shanghai on lingering concerns related to Huawei
  • Chinese airport companies rise amid HK protests (FT)
  • Nikkei declines after returning from holiday , trade sensitive sectors decline on TOPIX (Marine/Transportation, Iron/Steel)
  • Yen declines after gains seen on Monday’s session, Nikkei 225 Futures pare losses
  • Offshore yuan (CNH) rises as Chinese currency again fixed stronger than expected
  • China PBoC is due to sell 3-month and 1-year bills in Hong Kong on Wed (Aug 14th)
  • RBA Assist Gov Kent echoes recent remarks by Gov Lowe
  • NAB plays down improvement in Aussie July business confidence
  • Australia Q2 wage data due on Wed
  • Singapore cuts 2019 GDP and export growth forecasts
  • Gold Futures rise amid equity declines and protests in HK

Headlines/Economic Data

Australia/New Zealand

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  • ASX 200 opened -0.1%
  • (NZ) New Zealand July REINZ House Sales y/y: +3.7% v -3.8% prior
  • (AU) AUSTRALIA JULY NAB CONFIDENCE: 4 V 2 PRIOR; BUSINESS CONDITIONS: 2 V 4 PRIOR
  • (AU) Australia RBA Assistant Gov Kent: Need for unconventional policies unlikely but remains possible, not all policies used overseas are correct for Australia – “The Usual Transmission, Monetary Policy and Financial Conditions’: – at the Finance & Treasury Association Breakfast Event
  • (AU) Australia sells A$150M v A$150M indicated in Nov 2027 indexed bonds, avg yield -0.2072% v 0.27% prior, bid to cover 1.83x v 3.7x prior
  • MFG.AU Reports FY19 (A$) adj Net 364.2M v 268.9M y/y (355Me); Rev 617.4M v 452.6M y/y; Announces launch of the Magellan High Conviction Trust , A$275M institutional share placement at A$55.20/share

Japan

  • Nikkei 225 opened -1.2%
  • 6740.JP Capital injection talks with Suwa, INCJ proceeding ‘well’ with a little delay, plans to return to health in financials and return to profitability in H2 of FY2019
  • (JP) Japan July PPI (CGPI) M/M: 0.0% v +0.1%e Y/Y: -0.6% v -0.5%e (second consecutive decline)
  • (JP) South Korea PM Lee said to attend coronation of new Japan emperor Naruhito on Oct. 22 instead of the president – Korean press

Korea

  • Kospi opened -0.7%
  • (KR) South Korea President Moon: Economic fundamentals are strong despite uncertainty – Cabinet Meeting
  • 005930.KR According to IHS Markit in Q2 Samsung was the world number 2 chip maker behind Intel – Yonhap
  • (KR) South Korea July shipbuilding orders 270K compensated gross tons (CGTs); China 200K compensated gross tons (CGTs); Japan 30K compensated gross tons (CGTs) – Yonhap

China/Hong Kong

  • Hang Seng opened -1.1%; Shanghai Composite opened -0.6%
  • 293.HK Reports more than 210 flights cancelled on Tuesday due to sit-in at Hong Kong Airport
  • (HK) Hong Kong Spokesperson: will resume flights starting 6AM local time Tuesday, flights will still have some delays/cancellations to deal with capacity and airport operations
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY60B in 7-day reverse repos v Injects CNY30B prior; Net CNY60B injected v Net CNY30B injected prior
  • (CN) China PBoC sets yuan reference rate: 7.0326 v 7.0211 prior (9th consecutive weaker setting, weakest setting since March 25, 2008)
  • (HK) Hong Kong Chief Exec Lam: Non-cooperative events affected airport and traffic; HK society in ‘chaotic’ situation; dialogue could resume after violence stops; economy could suffer further
  • (CN) China July Foreign Direct Investment (FDI) y/y: 8.7% v 8.5% prior
  • Yesterday after the close
  • (CN) China PBOC Dep Gov Pan Gongsheng: China will neither devalue the yuan nor change the way it manages the yuan; FX market to return to fundamentals after fluctuations
  • (CN) Hong Kong and Macau Affairs Office: Situation in Hong Kong has come to a critical juncture
  • (CN) CHINA JULY AGGREGATE FINANCING (CNY): 1.010T V 1.625TE
  • (CN) CHINA JULY NEW YUAN LOANS (CNY): 1.060T V 1.275TE; Outstanding Loan Growth Y/Y: 12.6% v 13.0% prior v 12.8%e
  • (CN) CHINA JULY M2 MONEY SUPPLY Y/Y: 8.1% V 8.4%E

Other Asia

  • (SG) Singapore Q2 Final GDP Q/Q: -3.3% v -2.9%e; Y/Y: 0.1% v 0.2%e; Cuts 2019 GDP growth forecast to 0-1% (prior 1.5-2.5%)
  • (SG) Singapore Central Bank (MAS) Deputy MD Robinson: Monetary policy remains unchanged, not considering an off cycle policy meeting
  • (ID) Indonesia Central Bank (BI) Hendarsah: Will respond if risk off led by Argentina and Hong Kong; committed to guard rupiah stability; ready to intervene in FX and bond markets

North America

  • (CN) US Nat Sec Adviser Bolton: it’s incumbent upon China to live up to obligations under joint Sino-UK handover agreement
  • SPTN Reports prelim Q2 $0.34 v $0.35e, Rev $1.90B v $2.00Be; CEO Dave Staples resigns; Names Dennis Eidson interim CEO
  • CBS Reportedly CBS and Viacom are discussing an exchange ratio of 0.59-0.60, giving a slight premium to CBS shareholders – press

Europe

  • (IT) Italy PM Conte to address Senate on Aug 20 regarding the govt crisis – Italian press
  • (UK) UK PM Johnson spokesperson: To speak to more EU leaders in the coming weeks, believes Brexit deal in UK and EU interests

Levels as of 1:20 ET

  • Nikkei 225, -1.3%, ASX 200 -0.4%, Hang Seng -1.8%; Shanghai Composite -0.8%; Kospi -0.7%
  • Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax +0.5%; FTSE100 flat
  • EUR 1.1221-1.1181; JPY 105.58-105.15 ; AUD 0.6765-0.6747 ;NZD 0.6457-0.6440
  • Gold +0.6% at $1,526/oz; Crude Oil -0.2% at $54.83/brl; Copper flat at $2.582/lb
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