Asia Summary
Asian equity markets opened mixed before trending mostly higher. While regional focus over the weekend remained on North Korea and US trading threats, the Kospi traded higher the Won strengthened, ignoring the elephant in the room as usual. Japan reported stronger than expected Q2 preliminary GDP, with annualized GDP rising the fastest pace since Q1 2015. Notable subcomponent was private non-res investment (corporate CAPEX), 2.4% v 1.2%e. The yen continued to weaken in the session against the USD, A$ and Euro by 0.5-0.6%.
Focus then shifted to China July industrial production which came in lower than expected at 6.4% v 7.1E, coal, crude and power output all rose; while oil output fell. Retail sales were also a bit weaker at 10.4%. The PBOC again strengthened the yuan to the strongest setting since September 2016. While Trump had said he would delay investigation into China intellectual property theft as a sign of good faith on backing UN sanctions against North Korea, it is now expected he will launch the probe tomorrow.
Key economic data
(NZ) NEW ZEALAND Q2 RETAIL SALES (EX-INFLATION) Q/Q: 2.0% V 0.7%E; Y/Y: 5.4% V 4.2%E
(CN) CHINA JUL INDUSTRIAL PRODUCTION Y/Y: 6.4% V 7.1%E; YTD Y/Y: 6.8% V 6.9%E
(CN) CHINA JUL RETAIL SALES Y/Y: 10.4% V 10.8%E; YTD Y/Y: 10.4% V 10.5%E
(CN) CHINA JUL FIXED ASSETS EX RURAL YTD Y/Y: 8.3% V 8.6%E
(NZ) New Zealand Jul Performance Services Index: 56.0 v 58.6 prior
Speakers and Press
China/Hong Kong
(CN) China Stats Bureau (NBS): Overheated property market has cooled somewhat; China economy to continue steady operation in H2; Normal for H2 GDP to see a slow down
(CN) President Trump said to call on Trade Rep Lighthizer to announce a probe on China Monday, that will determine whether to investigate Chinese trade practices that force US firms operating in China to turn over intellectual property
(HK) Hong Kong Financial Services Chief Chan: No plan to ease anti-property cooling steps
Australia/New Zealand
(AU) RBA Assistant Gov Kent: Will be some time before RBA normalizes rates
Korea
(KR) White House: in teleconference President Trump and China President Xi Jinping reiterated mutual commitment to the denuclearization of the Korean peninsula
(KR) South Korea Finance Min Kim: Tensions with North Korea are impacting global market uncertainties; market sees current North Korea-US tension as more severe than in the past
Japan
(JP) Japan Econ Min Motegi: No change to view that Japan economy is in gradual recovery trend; not considering fresh stimulus steps
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.7%, Hang Seng +1.2%, Shanghai Composite +0.4%, ASX200 +0.6%, Kospi +0.7%
Equity Futures: S&P500 +0.4%; Nasdaq100 +0.5%, Dax +0.5%, FTSE100 +0.4%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1835-1.1805; JPY 109.54-108.96; AUD 0.7919-0.7885; NZD 0.7331-0.7306
Dec Gold -0.1% at 1,293/oz; Sept Crude Oil +0.1% at $48.84/brl; Sept Copper -0.2% at $2.91/lb
(AU) Australia sells A$500M in 2028 bonds; avg yield 2.6464%; bid-to-cover 4.85x
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT: 6.6601 V 6.6642 PRIOR (strongest setting since Sept 22, 2016)
(CN) China PBoC OMO injects CNY210B in v CNY130B prior in 7 and 14-day reverse repos
(KR) Bank of Korea (BOK) sells KRW1.06T v KRW1.1T offered in 1-yr monetary stabilization bonds; avg yield 1.52% v 1.47% prior
OLAM.SG Sees cocoa trading at $1,500-1,700/lb range; sees strong palm oil output recovery in Malaysia and Indonesia
Equities notable movers
Hong Kong/China
Yue Yuen Industrial, 551.HK Reports H1 Net profit $259M v $249M y/y, Rev $4.45B v $4.28B y/y; announces special dividend; +6.2%
Japan
Taikisha, 1979.JP Reports Q1 Net ¥265M v ¥791M y/y; Op ¥503M v ¥1.0B y/y; Rev ¥43.4B v ¥38.1B y/y; -10%
Cosmo Energy, 5021.JP Reports Q1 Net ¥4.7B v ¥4.8B y/y, Op ¥12.1B v ¥12.6B Rev ¥563.0B v ¥478.7B y/y; +13%
Nexon, 3659.JP Reports H1 Net ¥39.4B v ¥1.3B y/y, Op ¥56.0B v ¥17.1B Rev ¥121.9B v ¥95.6B y/y; +11%
Australia
Ansell, ANN.AU Reports FY17 Net profit $148M v $159M y/y; EBIT $217.8M v $230Me; Rev $1.60B v $1.57B y/y; -2.3%
JB Hi-Fi, JBH.AU Reports FY17 Net A$172.4M v A$191Me; Rev A$5.63B v A$5.6Be; -2.2%
South Korea
Korea Aerospace, 047810.KR Weakness attributed to North Korea tension; -5%
