General Trend:
- China and HK-listed brokerage firms decline, China expected to conduct trial program related to commercial banks and investment banking; Other sectors moving lower in Shanghai include IT and Property
- Hikvision Digital drops over 2% in China, US Defense Dept. released list of Chinese companies designated as ‘owned or controlled by Chinese military’ (from June 24th)
- Decliners in HK include gaming and property companies
- Declining sectors in Australia include Energy and Financial; Travel-sensitive stocks decline amid rise in new coronavirus cases in Victoria
- Japanese equities decline by over 1.9% after Friday’s losses on Wall St., Tokyo expected to give new directions on its coronavirus monitoring indicators [Tokyo has previously said that it would reinstate coronavirus restrictions if daily virus cases rise to over 50/day]
- Japanese airlines trade generally lower, other decliners include Iron/Steel and Insurance companies
- China official June PMI data due on Tuesday (June 30th)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.4%
- (AU) Victoria (Australia state) has made coronavirus testing mandatory for travelers, the state had 49 new coronavirus cases on Sunday [over 2 month high] – financial press
- (AU) Australia resources export earnings expected to decline by 10% in 2021 amid impact of coronavirus pandemic – financial press
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$146M v NZ$260M prior in government bonds as part of QE v NZ$M sought
- (NZ) New Zealand PM Ardern: Untenable to open New Zealand Border; A lot of work still needed to be done on Tasman Travel bubble
China/Hong Kong
- Hang Seng opened +0.3%, Shanghai -0.2% (returned from 2 day holiday)
- CanSino [6185.HK]: Recombinant coronavirus vaccine received China Military specially-needed drug approval, the vaccine is currently limited to military use only and its use cannot be expanded to a broader vaccination range without the approval of the Logistics Support Department
- (CN) China May Industrial Profits Y/Y: +6.0% v -4.3% prior [largest rise since March 2019]
- (CN) China securities regulator (CSRC) to issue investment banking licenses to commercial lenders as part of pilot scheme – Chinese press
- (CN) Chinese diplomatic and trade officials have warned the US that meddling in Chinese domestic affairs could jeopardize purchases of US exports under Phase I trade deal – press (from June 26th)
- (HK) China lawmakers finalize draft of Hong Kong Security Law (as expected)
- (HK) China Standing Committee of the National People’s Congress will meet from June 28-30th, where it is speculated to enact Hong Kong Security law (Xinhua from June 21st)
- (HK) Top adviser to Hong Kong Chief Exec Lam (Bernard Chan) said national security law will not need to be used if HK’s residents do not cross certain ‘red lines’ – press
- (CN) As of July, China PBOC is expected to start tracking of certain ‘large’ personal cash transactions (at least CNY100K) amid focus on outflows – Japanese press
- (CN) China PBOC reiterated domestic economic growth faces challenges from the global coronavirus pandemic, notes signs of improvement amid business re-openings – financial press
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos v Injects combined CNY180B in 7-day reverse repos prior; Net drain CNY40B v Net injection CNY180B prior
- (CN) China PBOC sets Yuan reference rate: 7.0808 v 7.0555 prior
- (CN) China National Energy Administration has increased the number of solar projects that are available for subsidies by 13%, has approved 26GW worth of projects that are eligible for subsidies
Japan
- Nikkei 225 opened -1.1%
- Toyota [7203.JP]: May global sales -34.1% y/y (vs -46.3% prior)
- (JP) JAPAN MAY RETAIL SALES M/M: +2.1% V +3.0%E; Y/Y: -12.3% V -11.6%E
- (JP) Tokyo (Japan) reported to give new direction to virus monitoring indicators – Press
Korea
- Kospi opened -1.4%
- Samsung Electronics [005930.KR]: Expected to announce Q2 earnings guidance next week; analysts see Q2 Op at KRW6.4T (-2.3% y/y), Rev KRW53.4T, -5.5% y/y – local press
- (KR) South Korea to extend tax cut related to passenger cars – Yonhap
- (KR) Japan said to be opposed to Trump suggestion that South Korea could be added to the G7 – financial press
- (KR) South Korea sells 3-year bonds, avg yield 0.81% v 1.03% prior
Other Asia
- (ID) Indonesia Fin Min Indrawati: Confirms burden sharing plan with the Indonesia Central Bank, central bank to bear IDR397T related govt spending
- (MY) Malaysia May Trade Balance (MYR): +10.4B v -3.5B prior
- (PH) Philippines Central Bank (BSP) Gov Diokno: Still have option to cut RRR, watching levels of liquidity in the Philippines; Expects Peso to remain stable amid BSP policies
- (TW) Taiwan telecom companies reported to be launching 5G services this week – Taiwan press
North America
- Boeing [BA]: Follow Up: 737 Max certification flight test to begin on Monday (June 29th), cites sources; FAA confirmed the completion of the review of Boeing’s safety system assessment for the 737 Max – financial press
- Facebook [FB]: More major brand names including Coca Cola, Levi Strauss, and Hershey to pause all ad spending on Facebook and Instagram on concerns about racist online content – press
- (US) California Gov Newsom ordering 7 counties to shut down bars after coronavirus infections increase in California – press
Europe
- (EU) EU has drafted list of 15 nations that could be allowed to resume travel with the EU starting July 1st, and US is still not among them – press
Levels as of 1:20 ET
- Nikkei 225, -2%, ASX 200 -1.9% , Hang Seng -1.3%; Shanghai Composite -0.7% ; Kospi -1.6%
- Equity S&P500 Futures: flat; Nasdaq100 -0.3%, Dax -0.3%; FTSE100 -0.1%
- EUR 1.1246-1.1217 ; JPY 107.37-107.04; AUD 0.6910-0.6845 ;NZD 0.6437-0.6402
- Gold +0.5% at $1,788/oz; Crude Oil -1.9% at $37.77/brl; Copper +0.5% at $2.679/lb
