Oil Prices Extend Gains Amid Focus On OPEC

General trend

• Energy shares supported by the rise in oil prices.
• Nikkei 225 has remained modestly higher [Gainers include Topix Air Transportation, Iron & Steel and Banks indices].
• Shanghai Composite declined during the morning session [Consumer Staples index dropped over 3%, CSI Liquor index drops over 2%; IT index rose over 1%].
• Hang Seng and HK TECH indices have continued to decline; Property names trade generally weaker amid Jun sales figures; BYD rises after issuing monthly sales figures.
• S&P ASX 200 traded lower ahead of the RBA decision [Energy index rises over 2%; Resources index also outperforms; Consumer and Financial indices lagged].
• Samsung is expected to issue Q2 guidance on Wed (financial press).
• NZD supported by analysts RBNZ calls.

Headlines/Economic data

Australia/New Zealand

• ASX 200 opened 0.0%.
• (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%; AS EXPECTED; adjusts weekly bond buying amounts, to review again in November; Maintains bond purchase program at A$100B, program to extend beyond September; Maintains 3-year yield target pegged to April 2024.
• (AU) Australia total weekly payroll jobs change for Jun 6th-20th: +0.3% v -0.9% prior; Wages +0.4% v -1.6% prior.
• RHP.AU To be acquired by Crayon at A$2.50/shr cash.
• ESK.AU Reports prelim H1 Rev $4.2M, +76% y/y (guided $3.5-4.0M); Guides H2 contracted Rev $4.2M.
• WBC.AU Announces sale of Westpac New Zealand Life for NZ$400M to Fidelity Life.
• (NZ) New Zealand Q2 Business Confidence: +10% v -13% prior; Capacity Utilization: 94.9% v 93.3% prior.
• (AU) Australia Jun TD Inflation Gauge M/M: +0.4% v -0.2% prior.
• (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$318.2B v A$313.6B prior (Record high).

Japan

• Nikkei 225 opened +0.3%.
• TOEZ.JP President Yamaji: See a “realistic” opportunity that equity trading hours will be extended (currently 5 hours) – press.
• (JP) Japan May Household Spending M/M: -2.1% v +0.1% prior; Y/Y: 11.6% v 11.1%e.
• (JP) Japan May Labor Cash Earnings Y/Y: 1.9% v 2.1%e; Real Cash Earnings Y/Y: 2.0% v 2.4%e; Overtime Pay +20.7% y/y; Highest increase since 2013 (oldest comparable data).
• (JP) Japan Deputy PM Aso: Japan and the US will need to defend Taiwan together in the event of a major problem – Kyodo.
• (JP) Japan MoF sells ¥900B v ¥900B indicated in 0.7% 30-year JGBs, avg yield 0.6800% v 0.6930% prior, bid to cover: 3.63x v 3.39x prior.

Korea

• Kospi opened +0.1%.
• 005380.KR Temporary halts Brazil Pant due to chip shortages – Yonhap.
• (KR) South Korea Vice Fin Min: To consider normalized eased cap on Bank FX derivatives going forward, Policy normalization may increase FX market uncertainties.

China/Hong Kong

• Hang Seng opened 0.0%; Shanghai Composite opened 0.0%.
• (CN) China President Xi spoke with France President Macron and German Chancellor Merkel Monday, saying China was willing to convene the 23rd China-EU leaders’ meeting with the EU at an early date, conduct high-level dialogues in strategic, trade, digital and climate sectors – Xinhua.
• 700.HK Chinese regulator reportedly to block Tencent’s Video gaming unit merger of Huya and DouYu – press.
• (CN) China PBoC said to call for more credit supply for small and medium size companies (SMEs).
• 9868.HK Confirms pricing at HK$165/shr v guidance of max price of HK$180/shr, IPO 4.7x covered.
• (CN) China PBOC sets Yuan reference rate: 6.4613 v 6.4695 prior.
• (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net drain CNY20B v Net drain CNY20B prior.
• (CN) China PBOC Q2 Survey: Business Climate Index (BCI): 59.6% v 56.6% prior (yesterday after the close).
• (HK) Hong Kong Jun PMI (Whole Economy): 51.4 v 52.5 prior (5th consecutive expansion).
• (HK) Hong Kong Chief Exec Lam: Proposed changes to privacy law only targets ‘illegal doxxing’ behavior; if any online platforms are concerned about privacy law, Govt officials will be happy to meet with them.
• (HK) Hong Kong Exchange: Expects to launch T+2 IPO settlement cycle during Q4 2022, which will help speed up IPO process.

Other

• OPEC+ will continue quotas at current levels, today’s meeting was postponed.
• (PH) Philippines Central Bank (BSP) Gov Diokno: CPI could remain above 2.0-4.0% target during the near term; Non Monetary measures crucial to easy supply pressures.

North America

• WBT Ali Group Submits raised binding All-Cash Proposal at $24/shr (prior $23).
• PFE Israel finding that the COVID vaccine efficacy is more like 64% (prior seen at 96%), so some talk a booster may be needed – press.

Europe

• VOW3.DE Porsche and Rimac Automobili finalize plans to establish JV that will include Bugatti, To be called Bugatti Rimac.

Levels as of 01:15ET

• Hang Seng -0.5%; Shanghai Composite -0.4%; Kospi +0.4%; Nikkei225 +0.3%; ASX 200 -0.3%.
• Equity Futures: S&P500 0.0%; Nasdaq100 -0.2%, Dax +0.0%; FTSE100 -0.1%.
• EUR 1.877-1.1858; JPY 110.98-110.80; AUD 0.7571-0.7528; NZD 0.7094-0.7018.
• Commodity Futures: Gold +1.1% at $1802,/oz; Crude Oil +2.1% at $76.76/brl; Copper +0.7% at $4.37/lb.