General Trend:
- Henderson Land and BYD decline in Hong Kong following earnings
- Trade-exposed Li & Fung may report results after the HK close
- Shanghai property index declines over 1% after recent gains
- Nikkei opened higher, but later pared gains as Yen strengthened
- Japanese construction/mining equipment firm Komatsu said to consider inventory reduction (Japanese press)
- Equities in Australia outperform amid focus on earnings; Santos rises after issuing results, drives energy index higher
- Qantas rises after announcing FY results and stock buyback
- South Korean chipmakers drop, Bank of Korea said chip exports decline likely to persist for the rest of 2019
- Aug PMI data in focus: Japan manufacturing PMI contracts for 4th straight month, Aussie services PMI sees first contraction in 5 months
- Offshore yuan (CNH) declines after weaker CNY fixing
- NZD declines ahead of retail sales data on Friday
- Markets now look ahead to Jackson Hole after Fed minutes release
- Fed Chairman Powell expected to deliver Jackson Hole speech on Friday morning (Aug 23rd)
- Indonesia Central Bank decision due later today (majority of analysts see rates unchanged)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (AU) Australia Aug Preliminary PMI Manufacturing 51.3 v 51.6 prior; PMI Services: 49.2 v 52.3 prior; PMI Composite: 49.5 v 52.1 prior
- QAN.AU Reports FY19 (A$) Underlying pretax profit 1.30B v 1.60B y/y, Rev 17.96B v 17.13B y/y
- CCL.AU Reports H1 (A$) Net 168.0M v 158.1M y/y; EBIT 289.9M v 301.4M y/y; Rev 2.43B v 2.31B y/y; declares special dividend of A$0.04/share
- (AU) Australia ACCC releases its seventh Gas Inquiry Report: Not likely to experience a shortfall in 2020 but supply remains tight and more development and production is needed
Japan
- Nikkei 225 opened +0.4%
- 6301.JP Said to reduce inventory by 10% from Q1 levels by end of FY – Nikkei
- (JP) Japan Aug Preliminary PMI Manufacturing: 49.5 v 49.4 prior (4th consecutive contraction)
- (JP) Japan Economy Min Motegi: Issues that need to be discussed with US at ministerial level have been narrowed down; Agreed to speed up discussions with USTR Lighthizer; Negotiations are ‘pretty tough’ but we were able to conduct discussions with mutual trust
Korea
- Kospi opened +0.1%
- (KR) Bank of Korea (BOK): Japan export curbs could be more damaging to local economy than tariff hikes; chip exports likely to continue to fall y/y for the duration of 2019
- (JP) South Korea is considering a conditional extension to defense pact with Japan – Japan Press
- (KR) South Korea to end the fuel tax cut at the end of Aug (as planned) – financial press
- 139480.KR To pay KRW130B to 1,000 suppliers and E-Mart Everyday KRW17.5B to 350 suppliers ahead of Sept 10th deadline – Korean press
- (KR) North Korea has carried out live fire drills by bombing replicas of South Korea’s F-15K fighter jets, surface-to-air missiles and a radar – Korean press
China/Hong Kong
- Hang Seng opened flat; Shanghai Composite opened +0.3%
- (CN) China said to have threatened sanctions over US arm sales to Taiwan – financial press
- (CN) China PBoC Open Market Operation (OMO): Injects CNY60B in 7-day reverse repos v Injects CNY60B prior; Net injection CNY30B v drain CNY40B prior (1st injection in 4 sessions)
- (CN) China PBoC sets yuan reference rate: 7.0490 v 7.0433 prior
- (CN) According to Xinhua 14 listed China banks reported H1, of which 13 reported double digit Rev growth, 11 reported net higher than 10% y/y
- 1910.HK Reports H1 Net $97M v $67.8M y/y, Rev $1.76B v $1.85B y/y
- (CN) Major China state owned banks seen supporting yuan and receiving USD/CNY swaps
Other Asia
- (SG) Singapore Central Bank (MAS) offering S$2.9B in July 2029 bonds on Aug 28th (2nd highest on record going back to 1998)
North America
- (US) FOMC MINUTES FROM JULY 31 MEETING: MOST OFFICIALS SAW RATE CUT AS ‘MID-CYCLE ADJUSTMENT’ OR POLICY ‘RECALIBRATION’; TWO POLICYMAKERS WOULD HAVE PREFERRED A 50BPS CUT IN JULY RATHER THAN 25BPS CUT
- (US) US Pres Trump tweets: our “only problem” is Powell and the Fed; urges a ‘BIG CUT’, but “don’t count on him”
Europe
- (DE) German Finance Ministry: Early indicators point to sustained slowdown in industrial sector; labor market situation is still favorable
- (GE) Germany said to consider negative interest ban for retail savers (in line with earlier speculation from Wed)- German press
Levels as of 1:20 ET
- Nikkei 225, -0.1%, ASX 200 +0.4%, Hang Seng -1.2%; Shanghai Composite -0.4%; Kospi -0.4%
- Equity Futures: S&P500 +0.1%; Nasdaq100 -0.2%, Dax -0.4%; FTSE100 -0.2%
- EUR 1.1093-1.1084 ; JPY 106.65-106.40 ; AUD 0.6789-0.6757 ;NZD 0.6409-0.6371
- Gold -0.3% at $1,511/oz; Crude Oil +0.1% at $55.72/brl; Copper -0.3% at $2.571/lb
