HomeContributorsFundamental AnalysisNikkei Declines After Over 4.8% Gain On Tuesday

Nikkei Declines After Over 4.8% Gain On Tuesday

General Trend:

  • Japanese Iron/Steel and Transportation companies drop after gains seen during prior session
  • Australian equities opened flat, Consumer Staples rise while Financial and Resources companies decline
  • Shanghai Composite trades flat in early trading
  • DRAMeXchange: Spot price for 8GB of DDR4 DRAM down over 19% vs April (Press)
  • Beijing City reports rise in daily virus cases, have yet to see any reports about the Beijing virus cluster spreading to other parts of China
  • There has been renewed speculation that the PBOC could lower the RRR and deposit rate
  • Little recent news seen regarding standoff between China and India

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened +0.2%
  • (NZ) Statistics New Zealand develops experimental Job indator, Estimates Jobs -26K since coronavirus lockdown began
  • (AU) Australia May Westpac Leading Index m/m: +0.2% v -1.5% prior
  • (AU) Australia Senator Concetta Fierravanti-Wells (ruling Liberal Party) said to have called for tariffs on China imports in retaliation for coronavirus – local press
  • (AU) Australia sells A$2.0B v A$2.0B indicated in 1.25% May 2032 bonds, avg yield 1.0098%, bid to cover 2.72x
  • (AU) Australia Trade Min Birmingham: International Border restrictions are likely to last for some time to come; Has not been able to talk to counterpart in China over disputes

Japan

  • Nikkei 225 opened -0.3%
  • (JP) Japan Apr Trade Balance: -ÂĄ833.4B v -ÂĄ1.03Te; Adj Trade Balance: -ÂĄ600.9B v -ÂĄ657.5Be
  • 3402.JP Expected to cut headcount at US carbon fiber unit by 25% – Japanese press
  • TSLA Amends battery manufacturing agreement terms with Panasonic
  • (JP) Japan Chief Cabinet Suga: Japan ready to respond to North Korea situation as needed

Korea

  • Kospi opened -0.2%
  • (KR) North Korea state media (KCNA): North Korea will deploy civil police to demilitarized zone and military units to Mount Kumgang in Kaesong industrial zone – press
  • (KR) South Korea Health Min: South Korea will fully back local development of treatment drugs and vaccines for coronavirus, even if foreign companies find a cure first – Yonhap
  • (KR) US Senators announces bill that condemn North Korea for human rights issues
  • (KR) Bank of Korea (BOK): Will strengthen monitoring financial markets as situation in North Korea may increase volatility and second wave of coronavirus remains a concern
  • (KR) South Korea Fin Ministry: To tighten mortgage rules; Restate their concern over increase in housing prices
  • (KR) South Korea office of the President: Will not Tolerate North Korea senseless remarks anymore; North Korea should bear all consequences from remarks and actions
  • (KR) South Korea Defense Ministry: North Korea will pay price if it takes actual military action
  • (KR) Follow Up: North Korea appears to have begun preparations to destroy the inter-Korean liaison office building by placing explosives immediately after leader Kim’s sister issued a warning yesterday – Yonhap

China/Hong Kong

  • Hang Seng opened +0.1%; Shanghai Composite opened 0.0%
  • (CN) China National Health Commission Coronavirus Update for June 16th: 44 additional cases v 40 prior (11 imported); Additional deaths: 0 v 0 prior; Asymptomatic cases 11 v 6 prior; Cases in Beijing 31 v 27 prior
  • (CN) China PBoC Open Market Operation (OMO): Skips reverse repos for 3rd consecutive session; Net drain CNY60B v drain CNY60B prior
  • (HK) HKMA said to sell HK$2.23B to defend peg as currency hits strong end of trading band v HK$1.43B last operation on June 13th – press
  • (CN) China Information Daily Opinion: China PBOC may cut RRR between end of June and early July and cut benchmark deposit rate in Q3
  • (CN) China PBOC sets Yuan reference rate: 7.0873 v 7.0755 prior
  • (CN) China Central Govt: Indicators reinforce steady recovery hope, working on easing financial strain on firms
  • (IN) India govt official: In talks with China to diffuse situation in Galwan Valley (shots were fired and reports of casualties on the India side) (yesterday)

Other

  • (SG) SINGAPORE MAY NON-OIL DOMESTIC EXPORTS M/M: -4.5% V -6.9%E; Y/Y: -4.5% V 1.0%E; Electronic Exports Y/Y: 12.5% v 2.5%e; Pharmaceutical exports Y/Y: -7.0% v +174.3% prior

North America

  • (US) Weekly API Crude Oil Inventories: +3.9M v +8.4M prior
  • (US) Fed’s Kaplan (dove, voter): Economy probably bottomed out in May, Will grow pretty strongly from here; Recovery hinges on success of Health policy, not convinced on negative rates or yield curve control – Interview
  • (CN) US USDA Undersecretary McKinner: USDA firmley believes China will keep its word on increased US Soybean imports

Europe

  • (DE) Germany Chancellor Merkel reportedly doesn’t expect to reach deal at EU summit about recovery funds or further EU finances; does expect decision on EU finances by July – press

Levels as of 1:15ET

  • Hang Seng -0.5%; Shanghai Composite -0.2%; Kospi -0.3%; Nikkei225 -0.6%; ASX 200 +0.4%
  • Equity Futures: S&P500 -0.3%; Nasdaq100 -0.1%, Dax -0.2%; FTSE100 -0.8%
  • EUR 1.1278-1.1254; JPY 107.44-107.17; AUD 0.6897-0.6852; NZD 0.6461-0.6431
  • Commodity Futures: Gold -0.1% at $1,734/oz; Crude Oil -2.6% at $37.40/brl; Copper -0.4% at $2.56/lb
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