General trend
- Energy cos. trade generally weaker.
- Nikkei 225 has remained modestly lower [Heavyweight Fast Retailing drops over 1%; Topix Air Transportation, Electric Appliances, Banks and Iron & Steel indices are among the decliners]; Seven & I is expected to report results later today.
- Hang Seng has extended declines [TECH index drops over 2.5%; Financials also decline].
- Shanghai Composite ended the morning session lower following the higher open [Financial and Property indices drop amid easing talk; Consumer Staples also decline; IT and Industrial indices rise].
- China banking names weaker after China’s CBIRC issued a notice regarding Industrial Bank’s infringement on consumer rights.
- Risk off sentiment grows as COVID cases continue to rise with the Delta variant and various countries continue with lockdowns in locations with higher cases.
- Olympics expected to announce later it will not have spectators.
- S&P ASX 200 has pared gains [Financial and Energy indices decline; Resources and Consumer Staples indices rise].
- Japan Bank Lending slowed in Jun.
- China Jun inflation figures due on Fri (Jul 9th).
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened 0.0%.
- (AU) Reserve Bank of Australia (RBA) Gov Lowe: Reiterates will take to 2024 to reach conditions to adjust rates (2-3% sustainable inflation), jobless rate in low 4% is full employment.
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$328.1B v A$321.9B prior (record high).
Japan
- Nikkei 225 opened -0.1%.
- (JP) Japan Jun Bank Lending Y/Y: 1.4% v 2.8% prior; Bank Lending (ex-trusts) Y/Y: 0.8% v 2.2% prior.
- (JP) Japan May Current Account: ¥1.98T v ¥1.81Te; Adj Current Account: ¥1.87T v ¥1.59Te; Trade Balance (BoP): ¥2.0B v ¥241.5Be.
- (JP) Japan Investors Net Buying of Foreign Bonds: -¥190.9B v -¥1.03T prior; Foreign Net Buying of Japan Stocks: -¥310.1B v -¥147.1B prior.
- (JP) Japan Econ Min Nishimura: Recommends maintaining coronavirus emergency in Okinawa (in line).
- (JP) Japan Chief Cabinet Sec Kato: Subsidy payments to companies affected by state of emergency to ‘vastly’ speed up.
- (JP) Bank of Japan Inflation Survey: Households expect inflation to reach 2.0% in 5-year.
- (JP) JAPAN JUN ECO WATCHERS CURRENT SURVEY: 47.6 V 41.8E; OUTLOOK SURVEY: 52.4 V 49.5E.
- (JP) Japan MoF sells ¥2.5T v ¥2.5T indicated in 0.00% (prior 0.005%) 5-year JGBs; avg yield -0.1150% v -0.0970% prior, bid to cover 3.53x v 3.79x prior.
Korea
- Kospi opened +0.1%.
- (KR) South Korea extends social distancing in greater Seoul for additional week after spike in COVID cases, warned there could be tougher measures if case numbers don’t come down – Yonhap.
- 005380.KR Union workers in Korea vote in favor of potential strike action over higher wages and better working conditions – press.
- (KR) South Korea reports another record daily cases of COVID, 1,275 v 1,212 d/d.
- (KR) South Korea Spy Agency: North Korea Leader Kim has no health problems; has lost 10-20KGs – Yonhap.
China/Hong Kong
- Hang Seng opened -0.3%; Shanghai Composite opened +0.1%.
- (CN) China Sec Journal: June CPI likely to have a slight fall due to lower pork prices.
- (CN) China PBOC Deputy Gov Fan: PBOC to take more antitrust actions in Payments sector; Worried about stablecoin impact on global currency; To keep CNY exchange rate stable to help some loss making exporters.
- (CN) FTSE Russell: After user feedback in US Executive order, will delete additional China stocks from Indices; listed ~20 Chinese companies that will be removed from its indexes on Jul 28th
- (CN) China State Administration for Market Regulation (SAMR) issued administrative penalties on various e-commerce and digital platform operators’ M&A cases; the cos. were ordered to pay penalties equal to CNY500K/offense – Press.
- (CN) China PBOC sets Yuan reference rate: 6.4705 v 6.4762 prior.
- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net drain CNY20B prior [first nil injection after 5 consecutive net drain].
- (CN) China State Council Meeting: To use timely RRR cuts to lower financing costs to support the real economy; reiterates stance to avoid flood-like stimulus – financial press (yesterday after the close).
- (CN) CHINA JUN FOREIGN RESERVES: $3.214T V $3.201TE (1st decline in 3 months) (yesterday after the close).
- (TW) China foundries have cut overall capacity support for chipmakers based in Taiwan; Giving priority to local clients – Digitimes.
- (CN) S&P Dow Jones to consider some China military companies to be re-included in indexes in light of Biden administration’s order.
North America
- (US) FOMC JUN MINUTES: INDICATORS OF ECONOMIC ACTIVITY AND EMPLOYMENT HAD STRENGTHENED; PARTICIPANTS REMARKED THAT THE ACTUAL RISE IN INFLATION WAS LARGER THAN ANTICIPATED.
- (MX) Mexico Central Bank (BANXICO) Gov Diaz: Economic recovery to speed up in coming quarters, volatility could impact capital flows to emerging markets.
- TSLA Prices China made standard range Model Y at CNY276K – Website.
Europe
- (EU) Reportedly ECB agrees to set new inflation target of 2% (from “below but close to 2%”) and to allow for some overshoot of the new inflation goal – press.
- (UK) Jun RICS House Price Balance: 83% v 79%e.
- (EU) European Union and the UK said to be planning closer cooperation in enforcing Antitrust measures – FT.
Levels as of 01:15ET
- Hang Seng -1.8%; Shanghai Composite -0.6%; Kospi -0.7%; Nikkei225 -0.6%; ASX 200 +0.1%.
- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.1%, Dax -0.2%; FTSE100 -0.2%.
- EUR 1.1799-1.1784; JPY 110.70-110.42; AUD 0.7489-0.7455; NZD 0.7023-0.6981.
- Commodity Futures: Gold -0.2% at $1,798/oz; Crude Oil -0.2% at $72.03/brl; Copper -0.1% at $4.30/lb.
