General Trend:

  • (US) President Trump: Deploying ‘thousands’ of armed soldiers and military personnel to Washington D.C; Will deploy military to states if local law enforcement can’t curb protests (press conference)
  • Financial press speculates about whether the US will impose financial sanctions on China over the HK national security law, Japan’s Fin Min said he sees a ‘major’ impact if the US ceased usage of the HK SWIFT payments system
  • Hang Seng extends rise following over 3% gain on Monday; Bank of East Asia rises over 17% amid speculated asset sales [co. announced strategic review in early March]
  • Real Estate, Securities and Retail firms are among the gainers in Japan
  • Fast Retailing is due to report its May sales after the Japanese close
  • Shanghai Composite underperforms in early trading amid weakness in the Consumer Discretionary and IT sectors
  • Consumer Staples and Financial firms are among the decliners in Australia, Consumer Discretionary firms rise
  • South Korean shipbuilder rise on orders received from Qatar
  • Singapore Exchange confirms launch of single stock futures contracts [on June 15th]
  • Japan Fin Min: No plans to issue corona-bonds
  • Hong Kong gov’t comments on new coronavirus cluster
  • Few surprises seen out of the RBA, statement generally in line with recent comments from Gov Lowe [from May 28th]
  • Australia Q1 GDP data due on Wed (June 3rd), consensus is -0.4% q/q vs +0.5% prior (would be first contraction since 2011)
  • Better than expected Australia Q1 data could suggest that the economy may not have contracted in Q1 (financial press)

Headlines/Economic Data

Australia/New Zealand

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  • ASX 200 opened 0.0%
  • (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH TARGET RATE UNCHANGED AT 0.25% AND 3-YR BOND YIELD TARGET AT 0.25%, AS EXPECTED
  • (AU) Australia Q1 Net Exports of GDP Q/Q: +0.5% v 0.1% prior
  • (AU) AUSTRALIA Q1 CORP OP PROFIT Q/Q: 1.1% V 0.0%E; INVENTORIES Q/Q: -1.2% V -0.6%E
  • (NZ) New Zealand Q1 Terms of Trade Index Q/Q: -0.7% v +1.5%e
  • (NZ) New Zealand Apr Building Permits M/M: -6.5% v -21.3% prior
  • (AU) Australia sells A$2.0B v A$2.0B indicated in 2.75% Nov 2029 bonds, avg yield 0.8691%, bid to cover 3.3x

Japan

  • Nikkei 225 opened +0.5%
  • (JP) Japan Trade Min Hiroshi: Engaged with South Korea in dialogue on export controls, not appropriate to comment on dialogue
  • (JP) Japan Fin Min Aso: Healthcare companies will be added to list of companies with restrictions on foreign investments
  • (JP) Japan May Monetary Base y/y: 3.9% v 2.3% prior
  • 8303.JP To acquire UDC Finance Ltd for NZ$762M from ANZ; Sale to complete in H2 of 2020
  • (HK) Japan Fin Min Aso: See major impact if US ceases use of Hong Kong SWIFT settlement System
  • (JP) Japan Fin Min Aso: Japan has no plans to issue corona-bonds or bonds to cover the cost of the coronavirus pandemic in Japan
  • (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: 0.000% v -0.001% prior, bid to cover: 3.36x v 4.09x prior

Korea

  • Kospi opened -0.2%
  • (KR) SOUTH KOREA MAY CPI M/M: -0.2% V -0.2%E; Y/Y: -0.3% V -0.2%E (1st decline 8-months); Core CPI y/y: 0.5% v 0.3%e
  • (KR) South Korea to resume WTO compliant against Japan export curbs – Yonhap
  • (KR) South Korea Finance Ministry unveils a KRW76T ‘new deal’ plan; cuts 2020 GDP and CPI outllok due to pandemic
  • (KR) South Korea Q1 Final GDP Q/Q: -1.3% v -1.4%e; Y/Y: 1.4% v 1.3%e
  • (KR) South Korea Vice Fin Min Kim: South Korea will take stern measures to stabilize markets if needed; Will monitor future developments
  • (KR) Qatar Petroleum signed KRW23.6T ($19.0B) agreement with shipbuilding companies in South Korea

China/Hong Kong

  • Hang Seng opened +0.3%; Shanghai Composite opened 0.0%
  • (CN) China said to have halted some US agricultural imports due to rising tensions between the countries – financial press [from June 1st]
  • (CN) China Foreign Ministry spokesperson Zhao Lijan: US is undermining bilateral relations and should correct its mistakes
  • (CN) China National Health Commission Coronavirus Update for June 1st: 5 additional cases (5 imported v 16 prior) v 16 prior; Additional deaths: 0 v 0 prior; Additional Asymptomatic cases: 10 v 16 prior
  • (CN) China PBOC to buy loans from regional lenders to boost lending; to conduct interest rate swaps to help banks extend loan repayment
  • (CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 2nd consecutive session; Net drain CN10B v CNY0B prior
  • (CN) China PBOC sets Yuan reference rate: 7.1167 v 7.1315 prior
  • (CN) China Premier Li: Need to establish strict regulatory mechanisms to ensure new fiscal funds go straight to city and county governments and directly benefit businesses and people; China to increase deficit by CNY1.0T in 2020 and will issue CNY1.0T in govt bonds to fund virus control – Xinhua
  • (HK) ~2.93M Hong Kong residents have showed their support for China national security legislation by signing petition – Xinhua

Other

  • (SA) Reportedly Saudi and Russian officials close to compromise on a brief oil cut extension – press

North America

  • (US) President Trump considering a move to invoke Insurrection Act which would allow deployment of active duty troops to respond to protests; would be first invocation of the Act since the 1992 Rodney King protests – NBC
  • (US) President Trump: Mobilizing civilian and military resources to stop rioting; Recommended governors deploy national guard- Press conference
  • MGI Western Union said to have made offer for MoneyGram – press

Europe

  • (UK) Govt considering national insurance holiday for companies as part of coronavirus recovery package – UK press

Levels as of 1:15ET

  • Hang Seng +0.4%; Shanghai Composite -0.2%; Kospi +0.8%; Nikkei225 +1.3%; ASX 200 +0.4%
  • Equity Futures: S&P500 -0.3%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 +0.4%
  • EUR 1.1139-1.1119; JPY 107.75-107.52; AUD 0.6814-0.6775; NZD 0.6307-0.6272
  • Commodity Futures: Gold -0.1% at $1,748/oz; Crude Oil +1.0% at $35.78/brl; Copper -0.2% at $2.46/lb
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