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Currency Markets Generally Quiet Ahead Of Fed Decision

General Trend:

  • Hang Seng is trying to have 8th straight gain
  • Cathay Pacific rises over 17% amid bailout announcement, but later pared gain
  • Shanghai Composite lags in early trading, Consumer Discretionary and Property companies decline amid weaker inflation data
  • Australian Consumer Discretionary companies rise after update from Harvey Norman, financials track recent declines in the US
  • Nikkei has moved between gains and losses after drop during prior session; Declining sectors in Japan include Iron/Steel and Financials; Electric Appliances sector moves higher
  • Nikkei 225 mini futures are due to expire on June 11th (Thursday)
  • China’s CPI continued to ease in May, PPI deflation accelerated
  • Fed’s policy decision due on Wed. Some focal points may include economic forecasts and whether the Fed may be open to a yield curve control policy (YCC) later in 2020 (press); USD index FUTs trade flat in Asia

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened -0.2%
  • (NZ) New Zealand 10-month Budget (NZ$): -12.8B, 629M less than forecasted; Net debt 25.3% of GDP v 21.3% prior
  • (NZ) New Zealand Q1 Manufacturing Activity Q/Q: 0.0% v 2.4% prior; Activity Volume Q/Q: -1.7% v 2.7% prior
  • HVN.AU Reports H2 to date Australia Franchisees sales +17.5% y/y; FY20 to date +7.4% y/y; planning special dividend of ~A$0.06/shr
  • (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 97.0 v 98.3 (1st decline in 10 weeks)
  • (AU) Australia sells A$2.0B v A$2.0B in 1.00% Dec 2030 bonds, avg yield 1.08%, bid to cover 3.17x
  • (AU) AUSTRALIA APR HOME LOANS VALUE M/M: -4.8% V -10.0%E; INVESTMENT LENDING M/M: -4.2% V -2.5% PRIOR; Owner Occupied Loan Value M/M: -5.0% v -7.5%e

Japan

  • Nikkei 225 opened -0.7%
  • (JP) JAPAN APR CORE MACHINE ORDERS M/M: -12.0% V -7.0%E; Y/Y: -17.7% V -13.2%E; Cuts assessment of machine orders
  • (JP) JAPAN MAY PPI (CGPI) M/M: -0.4% V -0.3%E; Y/Y: -2.7% V -2.4%E (y/y quickest decline since Oct 2016)
  • (JP) Japan PM Abe: Japan wants to take lead on a joint G7 statement on Hong Kong – speaking in parliament

Korea

  • Kospi opened -0.1%
  • (KR) SOUTH KOREA MAY UNEMPLOYMENT RATE: 4.5% V 4.0%E (10-year high)
  • (KR) Korea Fin Min Hong: Jobs situation hard to predict as the coronavirus pandemic continues
  • (KR) Bank of Korea (BOK) board member Cho Yoon-je warned the domestic economy could face a ‘Japan-like’ recession – Yonhap
  • (KR) South Korea Vice Fin Min: Warns of excessive optimism in financial markets
  • (KR) South Korea Defense Ministry: Will fully implement a military tension reduction agreement with North Korea despite threat to scrap it – Yonhap

China/Hong Kong

  • Hang Seng opened +0.5%; Shanghai Composite opened -0.2%
  • (CN) CHINA MAY CPI M/M: -0.8% V -0.9% PRIOR; Y/Y: 2.4% V 2.7%E (slowest annual pace since Apr 2019); PPI Y/Y: -3.7% v -3.3%e; Pork prices y/y: 81.7% v 96.9% prior
  • (CN) China National Health Commission Coronavirus Update for June 9th: 3 additional cases (3 imported v 3 prior) v 3 prior; Additional deaths: 0 v 0 prior; Additional Asymptomatic cases: 5 v 21 prior
  • (CN) China Securities Regulator (CSRC): Jan-Apr futures markets trading volume 1.69B lots, +53.2% y/y; turnover CNY106.9T, +34.8% y/y – Xinhua
  • (AU) China Education Ministry: tells students to ‘assess risks’ of studying in Australia due to reported ‘many’ racial incidents targeting Asians due to coronavirus (yesterday after the close)
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY60B in 7-day reverse repos v CNY60B prior; Net in injects CNY60B v Net inject CNY60B prior
  • (CN) China PBOC sets Yuan reference rate: 7.0703 v 7.0711 prior
  • (CN) China Aviation Regulator (CAAC): May Passengers Y/Y -52.6% v -68.5% prior; Cargo 549Kt, -12% y/y
  • (CN) China said to start work on Hong Kong Security bill June 18th – Nikkei

Other

  • (LY) Follow up: Libya national oil company confirms shutdown, declares force majure on Sharara oilfield

North America

  • TSLA After reopening, 4 employees test positive for coronavirus in California Plant – Press

Europe

  • (CN) EU and China agree to develop closer ties during their 10th round of high-level strategic dialogue

Levels as of 1:15ET

  • Hang Seng +0.3%; Shanghai Composite -0.5%; Kospi +0.2%; Nikkei225 +0.2%; ASX 200 +0.3%
  • Equity Futures: S&P500 +0.5%; Nasdaq100 +0.6%, Dax +0.8%; FTSE100 +0.2%
  • EUR 1.1347-1.1332; JPY 107.88-107.53; AUD 0.6977-0.6933; NZD 0.6532-0.6495
  • Commodity Futures: Gold +0.1% at $1,723/oz; Crude Oil -1.5% at $38.35/brl; Copper +0.5% at $2.61/lb
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