Asia Summary
The Apple effect rippled across the region with tech names surging to highs (Hynix 3%; LG Innotek 9%; Murata 4%) after Apple reported better than expected results and iPhone sales. Bond yields softened after tepid inflation lowered expectations for the Fed to hike rates again this year. Dollar weakness remains though moves are muted today. New Zealand Q2 employment came in weaker than expected causing the Kiwi to fall 35pips. In Australia June building approvals fell for the 10th consecutive month y/y to -2.3%, but was better than the expected decline of 11%. Crude oil fell after a surprise inventory build in the weekly API data.
Trump said to be planning to force China to crack down on intellectual-property theft and ease requirements that American companies share advanced technologies to gain entry to the Chinese market; though no specifics were given.
Key economic data
(NZ) NEW ZEALAND Q2 UNEMPLOYMENT RATE: 4.8% V 4.8%E; EMPLOYMENT CHANGE Q/Q: -0.2% V 0.7%E; Y/Y: 3.1% V 4.1%E
(AU) AUSTRALIA JUN BUILDING APPROVALS M/M: 10.9% V 1.0%E; Y/Y: -2.3% (10TH CONSECUTIVE DECLINE) V -11.0%E
(JP) JAPAN JUL MONETARY BASE Y/Y: 15.6% V 17.0% PRIOR; MONETARY BASE END OF PERIOD: ¥468.3T V ¥468.0T PRIOR
Speakers and Press
Hong Kong
(HK) Hong Kong Chief Exec Lam: H1 property prices +6% y/y; to set up panel to discuss land supply
China
(CN) China FX Regulator SAFE said to be examining loan guarantees for top dealmakers – financial press
(CN) China PBOC said to use a wider array of instruments to keep liquidity stable in August – Chinese press
Korea
(KR) US may send 2 aircraft carriers to South Korea to engage in military drills – South Korean Press
(KR) US Sec of State Tillerson: US has been trying to apply ‘peaceful pressure’ on North Korea, but options are limited
(KR) South Korea announces measures on the housing market; to raise capital gains tax for owners of multipe homes (as expected)
Japan
(JP) Bank of Japan (BoJ) Funo: Reiterates price momentum is still not sufficient for CPI target, still halfway to 2% price target
Other
(UK) National Institute of Economic and Social Research (NIESR): BoE should not wait until Brexit has occurred to raise rates
Asian Equity Indices/Futures (00:00ET)
Nikkei +0.6%, Hang Seng +0.4%, Shanghai Composite +0.1%, ASX200 -0.4%, Kospi +0.2%
Equity Futures: S&P500 +0.1%; Nasdaq +0.8%, Dax +0.1%, FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1818-1.1794; JPY 110.70-110.31; AUD 0.7974-0.7942; NZD 0.7474-0.7416
Aug Gold -0.6% at 1,265/oz; Sept Crude Oil -0.9% at $48.74/brl; Sept Copper -0.2% at $2.87/lb
(AU) Australia sells A$900M in 2.75% 2028 bonds, avg yield 2.7523%; bid-to-cover 2.93x
(CN) China PBOC OMO injects CNY120B in 7-day and 14-day reverse repos v CNY170B prior in 7-day
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT: 6.7205 V 6.7148 PRIOR
(KR) South Korea sells KRW2.6T in 2-yr monetary stabilization bonds; avg yield 1.64% v 1.66% prior
Equities notable movers
Hong Kong/China
SJM, 880.HK Reports H1 (HK$) Net 955.4M v 1.09B y/y; Rev 20.6B v 21.0B y/y; -8%
Japan
Honda,7267.JP Reports Q1 Net ¥207.3B v ¥174.7B y/y; Op ¥269.2B v ¥266.8B y/y; Rev ¥3.71T v ¥3.47T y/y; Raises outlook; +3.2%
Toyota, TM Reports July US sales +3.6% y/y, 222K units v 206.9Ke; -5%
Australia
QBE.AU To refund A$15.9M in add-on insurance premiums – ASIC; -1%
Korea
Doosan Infracore,042670.KR Reports Q2 (KRW) Net 60.4B v 62.4Be, Rev 1.77T v 1.76Te; +2%
