Asian Indices Opened Generally Higher, Led By Shanghai

Jul 06 20, 06:21 GMT

General Trend:

Chinese chipmaker SMI rises over 10% in HK, to raise over CNY46.0B in Shanghai IPO (previously expected to raise ~CNY20B)
WH Group rises over 3% in HK, China said to have suspended some pork imports from Brazil
Nikkei 225 has added to the opening gains; sectors moving higher include transports, autos and securities
Kospi rises ahead of upcoming earnings, Samsung Electronics and LG Electronics are expected to issue prelim Q2 results on Tuesday (July 7th)
Australian equities lag amid rise in virus cases in Victoria, resources sector declines

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat
(AU) Australia Victoria state reports 127 coronavirus cases v 74 prior
(AU) Australia states New South Wales and Victoria will close border beginning Tuesday citing rising coronavirus cases in Victoria – Press
(AU) Australia Finance Min Cormann to leave federal politics by the end of the year, to remain in position to help finalize the July economic statement and Oct federal budget – local press
(AU) Australia Jun Melbourne Institute Inflation M/M: +0.6% v -1.2% prior; Y/Y 0.7% v 0.1% prior
(AU) Australia Jun ANZ Job Advertisements M/M: +42.0% v -0.3% prior
(NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$370M v NZ$390M prior in government bonds as part of QE v NZ$380M sought
(NZ) New Zealand Jun ANZ Commodity Price M/M: -0.7% v -1.1% prior

China/Hong Kong

Hang Seng opened +0.7%, Shanghai Composite +1.1%
(CN) Zhou Li (former China deputy Dir of Communist Party’s International Liaison Dept) said by taking advantage of the US dollar’s global monopoly position in the financial sector, the US will pose an increasingly severe threat to China’s further development – SCMP
(CN) China PBoC Open Market Operation (OMO): Skips reverse repos v Skips prior; Net drain CNY180B v Net drain CNY110B prior (6th straight skip)
(CN) China PBOC sets Yuan reference rate: 7.0663 v 7.0638 prior
(HK) Hong Kong Jun PMI: 49.6 v 43.9 prior (Highest reading since Oct 2018)

Japan

Nikkei 225 opened +0.2%
(JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: raises purchases of 5-10 year JGBs (as expected)
(JP) Japan Economy Min Nishimura: Japan Will consult exports on relaxing coronavirus restriction on July 10th; Japan Govt working with Tokyo Govt on coronavirus measures

Korea

Kospi opened +0.3%
(KR) South Korea said to seek ‘small’ agreement between the US and North Korea – South Korea press
(KR) South Korea reported to announce KRW100T ‘new deal’ roadmap on 13th of July [the new deal plan relates to government spending expected by 2025] – Press
(KR) South Korea Finance Ministry cuts estimate for government bond issuance related to 3rd extra budget to KRW23.0T (vs KRW23.8T prior) – Press

Other Asia

North America

Boeing [BA]: Might conduct next 737 Max government test flight by as early as the upcoming week, test flight expected to focus on assessment of the safety of software fixes – US financial press
Dominion Energy [D]: Berkshire Hathaway Inc.’s Energy Company to acquire Gas Transmission and Storage Business for $9.7B (includes the assumption of $5.7B of existing debt); agreement does not include acquisition of the Atlantic Coast Pipeline; Cuts FY20 Op EPS guidance to $3.37-3.63 v $4.33e, cites transaction (guided $4.25-4.60 prior); to use proceeds of transaction to buy back stock
Dominion Energy and Duke Energy cancel the Atlantic Coast Pipeline, cites ongoing delays and increasing cost uncertainty which threaten the economic viability of the project
Uber [UBER]: Follow Up: Reported to agree to buy Postmates for $2.7B in an all stock transaction [transaction price in line with prior speculation]; Reported to announce purchase on Monday (July 6th) – Press

Europe

(UK) BoE Gov Bailey letter said to reiterate that negative interest rates were one of the potential tools under active review if more stimulus is needed, warned lenders of the challenges related to negative rates – UK Press
(UK) UK gov’t released its quarantine exception list, to relax quarantine rules for 73 countries and territories, effective from July 10th (Friday); maintains travel quarantine for the US
(UK) UK said to consider increasing the threshold related to the homebuyer stamp duty holiday – UK press
(EU) ECB chief Lagarde said economic crisis caused by coronavirus will lead to a deep shift in the global economy, expects disinflation as crisis impacts economy – press
(FR) France PM Edouard Philippe resigned; France’s new cabinet is expected to be announced on Monday (July 6th) – press
(FR) ECB Villeroy (France) said the domestic economic recovery is going at least as well as we expected and perhaps a little better; Bank of France is due to issue updated GDP growth est on Tuesday (July 7th) – Press
(DE) Germany Economy Minister Altmaier sees economic recovery from Oct 2020 – press

Levels as of 1:20 ET

Nikkei 225, +2%, ASX 200 -0.4% , Hang Seng +3.1%; Shanghai Composite +4.6% ; Kospi +1.5%
Equity S&P500 Futures: +1.2%; Nasdaq100 +1.3%, Dax +1.6%; FTSE100 +1%
EUR 1.1285-1.1243 ; JPY 107.77-107.45 ; AUD 0.6969-0.6928 ;NZD 0.6555-0.6519
Gold -0.5% at $1,780/oz; Crude Oil -0.4% at $40.48/brl; Copper +0.9% at $2.7415/lb