General Trend:

  • The Trump Admin agreed to delay tariffs on certain items from China until Dec 15th, relates to footwear/clothing and consumer technology items [On Aug 1st: US President Trump said the US would put a ‘small’ additional tariff of 10% on the remaining $300B worth of goods and products coming from China, effective Sept 1st]
  • Trump noted ‘very productive’ phone conversation with China, concerns about companies during the upcoming Christmas season amid the partial tariff delay announcement
  • IT and Consumer Discretionary shares outperform in Shanghai on the news related to the US; ZTE rises over 2%
  • Apple suppliers also gain in Hong Kong
  • Sunny Optical (Apple supplier) rises over 10% amid earnings, US tariff delay related to China
  • Airlines rise in HK after declines on Tuesday’s session; Hong Kong Airport said operations are normal following the earlier reported clashes
  • HK sportswear company Li Ning rises over 11% on earnings
  • Large pork producer WH Group drops over 3% in HK amid cautious outlook
  • Tencent rises ahead of quarterly earnings report (expected after the HK close); China Unicom also expected to report after the market close
  • Trade-sensitive TOPIX Marine/Transportation index rises in Japan, along with tech shares; Nikkei’s upside capped by stronger yen
  • Australian equities underperform, resources companies and REITs decline
  • China July Industrial Production growth slowest pace since early 2002, retail sales miss ests amid auto slowdown
  • Offshore yuan (CNH) declines amid China data and gains seen on Tuesday’s session; Little initial impact seen on CNH from 1st stronger yuan fixing in 10 sessions
  • PBOC sold yuan-denominated bills in Hong Kong
  • Japan June Core Machine Orders beat ests, after the prior data saw the first decline in 3-months
  • Yen rises after declines on Tuesday’s session; AUD/JPY drops amid yuan declines and weaker China data
  • Aussie monthly jobs data due on Thursday’s session

Headlines/Economic Data

Australia/New Zealand

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  • ASX 200 opened +0.2%
  • (AU) AUSTRALIA Q2 WAGE PRICE INDEX Q/Q: 0.6% V 0.5%E; Y/Y: 2.3% V 2.3%E; The most significant contribution to wage growth this quarter came from the public sector component of the health care and social assistance industry
  • NAB.AU Reports Q3 (A$) Cash profit 1.65B, +1% y/y; Net 1.70B v 1.65B y/y
  • AOG.AU To be acquired by Brookfield for A$2.195/shr
  • (AU) Australia Aug Westpac Consumer Confidence Index: 100.0 v 96.5 prior; M/M: 3.6% v -4.1% prior
  • (AU) Australia sells A$800M v A$800M indicated in 2.50% May 2030 bonds, avg yield 0.9868%, bid to cover 3.69x

Japan

  • Nikkei 225 opened +1.1%
  • 3382.JP Seven-Eleven Japan July total store sales -1.2% y/y (first y/y decline since at least 2015)
  • (JP) US President Trump said to have asked Japan PM Abe to purchase farm products from the US (including soybeans and wheat) – Japanese Press
  • (JP) JAPAN JUNE CORE MACHINE ORDERS M/M: +13.9% V -1.0%E (largest rise since records started in 2005); Y/Y: +12.5% V -1.1%E

Korea

  • Kospi opened +1.1%
  • (KR) South Korea July Export Price Index M/M: -0.2% v -2.1% prior; Y/Y: -5.3% v -2.5% prior; Import Price Index M/M +0.6% v -3.5% prior; Y/Y: -1.3% v -0.4% prior
  • (KR) South Korea and Japan Vice Foreign Min to meet this week – Korean press
  • (KR) South Korea Presidential spokesperson: Not considering DRAM export curbs on Japan – financial press (comments from Aug 13th)

China/Hong Kong

  • Hang Seng opened +1.7%; Shanghai Composite opened +1.0%
  • (CN) China to keep with plan for Sept trade talks with the US after tariff delay
  • (CN) China PBoC sets yuan reference rate: 7.0312 v 7.0326 prior (1st stronger setting in 10 sessions) following Trump’s delay in some tariff implementation to Dec 15th
  • (CN) China Fin Min Liu Kun: Reiterates proactive fiscal policy will be more effective; to further cut govt spending and ensure tax cuts – Chinese press
  • (CN) China Stats Bureau (NBS) Spokesperson Liu Aihua: Economy is facing complex internal environment, increasing downward pressure; China’s economic growth is still in proper range
  • (CN) CHINA JULY RETAIL SALES Y/Y: 7.6% V 8.6%E; YTD Y/Y: 8.3% V 8.4%E
  • (CN) CHINA JULY INDUSTRIAL PRODUCTION Y/Y: 4.8% V 6.0%E (slowest growth since Feb 2002); YTD Y/Y: 5.8% V 6.0%E
  • (CN) China July Surveyed Jobless Rate: 5.3% v 5.1% prior
  • (CN) China July Property Investment YTD Y/Y: 10.6% v +10.9% prior
  • (CN) CHINA JULY FIXED URBAN ASSETS Y/Y: 5.7% V 5.8%E
  • (CN) China Vice Premier Liu He spoke with US Trade Rep Lighthizer and Treasury Sec Mnuchin by phone, will speak again in next two weeks – Chinese press
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v Injects CNY60B prior; Net CNY100B injected v Net CNY60B injected prior
  • (HK) Hong Kong Airport obtains injunction to prevent protesters from unlawfully obstructing airport operations after clashes have been reported at Hong Kong International Airport between protesters and polic
  • (HK) Recent move by Hong Kong gov’t to double the deposit for land tender sales expected to add to financing pressures of small property developers – SCMP
  • (CN) China July Passenger Auto Sales 1.53M units, -3.9% y/y (13th consecutive decline) – China Automobile Association (CAAM); Analysts notes if sales continue at this rate China (the world’s largest auto market) is on track for its first double digit decline in 2019
  • (CN) China PBOC sells total CNY30B v CNY30B indicated in 3-month and 1-year bills in Hong Kong
  • 2331.HK Li Ning: Reports H1 (CNY) Net 795M v 269M y/y; Op 678M v 294M y/y; Rev 6.3B v 6.1Be
  • 288.HK WH Group: Reports H1 adj Net $569M v $514M y/y, EBITDA $1.16B v $1.05B y/y, Rev $11.1B v $11.2B y/y; Greatest challenge in China is continuously soaring hog prices due to growing supply shortage that will push down packaged meat margins.
  • 5.HK HSBC: Raises cap of Hong Kong HIBOR based mortgage rate by 10bps
  • 2382.HK Sunny Optical: Reports H1 (CNY) Net 1.43B v 1.37Be, Rev 15.6B v 14.3Be HINA JULY INDUSTRIAL

Other Asia

  • 2317.TW Reports Q2 (NT$) Net 17.1B v 16.3B y/y (3rd consecutive decline), Rev 1.16T v 1.12Te (after the close)

North America

  • (CN) US announces next steps on proposed 10% tariff on China imports; US to postpone tariffs on some items until Dec 15th, including cell phones and laptops – press
  • (US) FTC Chairman Simons: FTC is prepared to break up major technology platforms if needed by undoing past mergers – press

Europe

  • (IT) Italy Senate rejects The League’s call to hold a no-confidence debate tomorrow; Senate will hold no-confidence motion debate in govt on Wednesday, Aug 20th
  • (IE) Ireland Foreign Min Coveney: Heading towards no deal Brexit outcome unless UK changes its approach
  • (UK) Trump administration reportedly prepared to lift tariffs on UK steel, aluminum and automotive imports if UK lifts tariffs on whiskey, Harley Davidson, and other goods – UK’s Times

Levels as of 1:20 ET

  • Nikkei 225, +0.9%, ASX 200 flat, Hang Seng +0.6%; Shanghai Composite +0.8%; Kospi +0.7%
  • Equity Futures: S&P500 -0.1%; Nasdaq100 flat, Dax -0.2%; FTSE100 +0.3%
  • EUR 1.1180-1.1169 ; JPY 106.76-106.23 ; AUD 0.6809-0.6777 ;NZD 0.6470-0.6445
  • Gold -0.8% at $1,512/oz; Crude Oil -1.2% at $56.40/brl; Copper -0.5% at $2.618/lb
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