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General Trend:

• Markets generally weaker after Friday’s stronger US payrolls, make the case harder for the Fed to cut rates in the near term; USD stronger across the region
• Deutsche bank announced massive restructuring, including 18,000 layoffs from now to 2022; Moody’s affirms rating and outlook
• China FX reserve highest level since April of last year, gold reserve rise for the 8th consecutive month in June, remainder of China’s June data expected this week
• China, US trade talks to resume this week
• South Korea again calls on Japan to cancel export curbs impacting semiconductor industry and announces plans to support companies impacted by the curbs
• Shares of Samsung weaker after reporting weaker prelim Q2 results Friday, exec over the weekend traveled to Japan to discuss new export curbs
• Hong Kong protestors came out in force again in popular Chinese tourist neighborhood to “explain their side of protests”; Hong Kong vowed to crack down, many arrests made
• BoJ Gov Kuroda reiterated to keep rates at very low levels until at least Spring of 2020 after Machine orders fell to an 8-month low
• Greece elections saw the center right party take control, saying they will lower taxes and mare more investments
• Iran said it will start t phase out its nuclear pledge made in 2015 to world leaders until US sanctions are diminished

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.2%
• VLW.AU To be acquired by AVID for A$2.345/shr
• (AU) Australia sells A$600M v A$600M indicated in 2029 bonds; avg yield 1.3334%; bid to cover 3.51x
• (AU) Australia Jun ANZ Job Advertisements m/m: +4.6% v -8.2% prior

Japan

• Nikkei 225 opened -0.4%
• (JP) BOJ Gov Kuroda: Reiterates will keep rates at current very low levels until at least Spring 2020 - speech in Tokyo
• 6758.JP "Spider-Man: Far From Home" top movie in N. American box office over 6 day holiday weekend with $185.1M in sales
• (JP) Polls show that the younger voters in Japan are more likely to support PM Abe's govt than their parents (reminder elections on July 21)
• (JP) JAPAN MAY PRELIMINARY ADJUSTED CURRENT ACCOUNT: ¥1.31T V ¥1.23TE; CURRENT ACCOUNT BALANCE: ¥1.59T V ¥1.38TE
• (JP) JAPAN MAY CORE MACHINE ORDERS M/M: -7.8% V -3.7%E; Y/Y: -3.7% V -3.6%E (1st decline in 3 months, 8 month low)
• (JP) JAPAN MAY PRELIMINARY TRADE BALANCE (BOP BASIS): -¥650.9B V -¥758.9BE
• (JP) Bank of Japan (BOJ) Regional Economic Report: Maintains view for all 9 regions

Korea

• Kospi opened -0.9%
• (KR) South Korea Financial Services Commission (FSC) Chairman Choi Jong-ku: South Korea can cope with loan withdrawals and other retaliatory measures Japan may take in the financial sector in a row surrounding wartime forced labor – Yonhap
• 005930.KR Vice president traveled to Japan over the weekend to meet with local business leaders and discuss Korea's response to Tokyo's retaliatory limits on exports of high tech materials - Yonhap
• (KR) South Korea Fin Min Hong: Will help to minimize damage against local companies related to Japan export curbs

China/Hong Kong

• Hang Seng opened -0.9%; Shanghai Composite opened -0.4%
• (CN) CHINA JUN FOREIGN RESERVES: $3.12T V $3.110TE ( highest level since April 2018); gold reserves have their 8th consecutive rise
• (CN) China FX Regulator SAFE: Expect FX reserves to keep basically stable, rise due to USD decline and global trade
• (CN) China expected to use its plan to name foreign companies that are a risk to national security as a bargaining chip in trade talks with the US, which will resume this week – SCMP
• (CN) China PBOC sets yuan reference rate: 6.8881 v 6.8697 prior
• (CN) China PBoC Open Market Operation (OMO): Skips for the 11th consecutive; Net drains CNY0B v drain CNY30B prior
• (CN) China Think Tank Director: The economic decoupling of China and the US could be seen as 'strategic blackmail' for the US to attempt to prevent China from growing stronger; sees decoupling as 'completely possible' – SCMP
• 2020.HK Muddy Waters Research releases critical report
• (CN) China PBOC: Requires Ping An Bank and China Merchants bank to strengthen risk control and internal management after abnormal interbank trades; suspends traders' qualifications for some businesses at the two banks

Other Asia

• (TW) Taiwan considering raising minimum wage by 3-5% - local press

North America

• SYMC Broadcom said to be making progress for an all cash offer for Symantec; has financing, identified $1.5B cost savings; deal could value Symantec at $22B including debt - financial press
• BA Saudi Arabia low cost airline, Flyadeal, cancels order for up to 50 737 Max planes, worth ~$5.9B - press

Europe

• DBK.DE Announces significant strategic transformation and restructuring plans: To exit Global Equities and a significant reduction in Corporate and Investment Banking risk weighted assets; to layoff 18,000 positions by 2022; Reports prelim Q2 Net loss €2.8M, Pretax loss €500M; Ex-items Net profit €120M; Pretax profit €400M; Rev €6.2B; no dividend for 2019 and 2020
• LUPE.SE Equinor to divest a 16% holding in Lundin Petroleum for a direct interest of 2.6% in the Johan Sverdrup field and a cash consideration of ~$650M
• DBK.DE Changed the leadership structure, effective August 1; Investment Banking Chief Garth Ritchie to step down by mutual agreement; effective end of July
• (IR) Iran official confirms it will scale back commitment to the 2015 nuclear deal with world powers, will keep reducing its commitments every 60 days, unless signatories of the pact moved to protect it from US sanctions; signaled room for diplomacy
• (GR) Greece election results: Center right opposition party New Democracy secures power, PM Tsipras (Leftist Syriza party) to be replaced by Kyriakos Mitsotakis
• (FR) ECB's Villeroy (France): We look at the markets but we are not market dependent, we are data dependent
• (UK) Ambassador to US Darroch calls Trump administration "dysfunctional”, “clumsy”, “inept” and “did not serve the UK well” - UK press citing internal memos
• (UK) Lawmakers from ruling Conservatives and opposition Labour both indicated they are looking for ways to prevent the next PM from doing a no deal Brexit - UK press
• (TR) Turkey Central Bank Gov Cetinkaya has been removed from office; Deputy Gov Murat Uysal has been appointed as the new Governor

Levels as of 01:20ET

• Hang Seng -1.9%; Shanghai Composite -2.5%; Kospi -1.8%; Nikkei225 -1.2%; ASX 200 -1.0%
• Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.4%; FTSE100 -0.2%
• EUR 1.1220-1.1233; JPY 108.31-108.58 ; AUD 0.6976-0.6990; NZD 0.6623-0.6643
• Commodity Futures: Gold +0.2% at $1,403/oz; Crude Oil +0.0% at $57.52/brl; Copper -0.2% at $2.66/lb

Market movers today

Today is a quiet day in terms of data releases. However, two important releases are due in Germany today, the first being the industrial production for May, which will give a hint at where Q2 GDP growth will arrive, with both PMIs and Ifo numbers pointing towards a weak outcome (we expect 0.2% q/q). The April industrial production showed a weak start to Q2, with the largest fall in German industrial production in almost four years and we expect continued downside risks to euro area macro key figures the coming weeks. See more here

We will also get trade balance key figures out of Germany, which will give further indications as to the impact of the ongoing trade war as well as to what extent the Brexit stockpiling in Q1 has temporarily boosted euro area exports.

Selected market news

The Turkish lira opened 2.3% weaker against the EUR (currently at 6.4612) this morning following Erdogan's decisions to dismiss central bank governor, Murat Cetinkaya, and instead naming central bank deputy Murat Ulysal as his successor. According to a government official, Erdogan continued to push his conviction that higher interest rates fuel inflation in a closed-door meeting, after the decision had become known. Although the lira has performed the last two months, short lira positions have remained high.

The general elections in Greece yesterday showed overwhelming support for the centre-right party New Democracy led by Kyriakos Mitsotakis, who is set to become the new prime minister. Preliminary results show that New Democracy got 40% of the votes, while Alexis Tsipras' ruling Syriza party is set to get 32%. The result also showed waning support for right wing Golden Dawn, which is (so far) not set to pass the 3% threshold needed to enter parliament. Golden Dawn became the third largest party in Greece's last elections obtaining 7% of the vote. The Greek election system sees the largest party obtaining a further 50 mandates, which would give New Democracy an absolute majority. Although Mr. Mitsotakis has promised tax cuts and larger investments, the economic policy will most likely not differ much from the existing one, given the deal agreed upon between Tsipras and the country's creditors. Greece's government debt has performed immensely this year - the current 10Y government bond was introduced at a yield of 4% in early March and is now trading at 2.1%.

Stocks in Asia markets are down this morning with the Hang Seng down 1.6% and Nikkei down 1%. The strong US jobs report on Friday saw market participants lower the implied rate cut at the July meeting to 'just' 25bp, after the probability of a 50bp cut had previously reached 24%.

Oil is little changed this morning after the UK and the EU expressed concern during the weekend over Iran's decision to continue to breach uranium enrichment levels set under the 2015 nuclear accord. Iran had initially given Europe a 60-day deadline ending on 7 July to relieve penalties on buying Iranian oil - otherwise initial commitments could be broken.

For the 24 hours to 23:00 GMT, the EUR declined 0.55% against the USD and closed at 1.1225 on Friday.

On the data front, Germany's seasonally adjusted factory orders fell 2.2% on a monthly basis in May, marking its steepest drop since financial crisis and compared to a revised rise of 0.4% in the previous month. Market participants had expected factory orders to register a drop of 0.2%.

The US dollar rose against its major peers on Friday, following stronger than expected US jobs data.

In the US, data showed that the non-farm payrolls increased by 224.0K in June, surpassing market expectations for a rise of 160.0K and following a revised gain of 72.0K in the prior month. Moreover, the nation's average hourly earnings of all employees climbed 0.2% on a monthly basis in June, compared to a revised rise of 0.3% in the previous month. Market participants had expected average hourly earnings of all employees to record a gain of 0.3%.

On the flipside, the US unemployment rate unexpectedly advanced to 3.7% in June, compared to 3.6% in the prior month.

In the Asian session, at GMT0300, the pair is trading at 1.1228, with the EUR trading a tad higher against the USD from Friday's close.

The pair is expected to find support at 1.1195, and a fall through could take it to the next support level of 1.1162. The pair is expected to find its first resistance at 1.1273, and a rise through could take it to the next resistance level of 1.1318.

Moving forward, traders would keep an eye on Euro-zone's Sentix investor confidence index for July along with Germany's industrial production and trade balance data for May, slated to release in a few hours. Later in the day, the US consumer credit for May, will keep traders on their toes.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP declined 0.46% against the USD and closed at 1.2524 on Friday.

Data indicated that UK's Halifax house price index fell 0.3% on a monthly basis in June. The index had recorded an advance of 0.5% in the prior month.

In the Asian session, at GMT0300, the pair is trading at 1.2524, with the GBP trading flat against the USD from Friday's close.

The pair is expected to find support at 1.2474, and a fall through could take it to the next support level of 1.2424. The pair is expected to find its first resistance at 1.2581, and a rise through could take it to the next resistance level of 1.2638.

Going ahead, traders would await UK's BRC sales like-for-like for June, slated to release overnight.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.63% against the JPY and closed at 108.47 on Friday.

In economic news, Japan's preliminary leading economic index declined to a level of 95.2 in May, falling to its lowest level in 6.5 years and more than market consensus for a drop to a level of 95.4. The index had registered a reading of 95.9 in the previous month. Meanwhile, the nation's flash coincident index rose to a level of 103.2 in May, compared to a reading of 102.1 in the previous month. Market participants had expected the index to register a climb to a level of 103.1.

In the Asian session, at GMT0300, the pair is trading at 108.40, with the USD trading 0.06% lower against the JPY from Friday's close.

The pair is expected to find support at 107.93, and a fall through could take it to the next support level of 107.47. The pair is expected to find its first resistance at 108.75, and a rise through could take it to the next resistance level of 109.11.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.71% against the CHF and closed at 0.9917 on Friday.

In the Asian session, at GMT0300, the pair is trading at 0.9903, with the USD trading 0.14% lower against the CHF from Friday’s close.

The pair is expected to find support at 0.9857, and a fall through could take it to the next support level of 0.9812. The pair is expected to find its first resistance at 0.9940, and a rise through could take it to the next resistance level of 0.9978.

With no macroeconomic releases in Switzerland today, investors would look forward to global macroeconomic releases for further direction.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.21% against the CAD and closed at 1.3076 on Friday.

Data showed that Canada's unemployment rate advanced to 5.5% in June, meeting market expectations. The unemployment rate stood at 5.4% in the previous month.

In the Asian session, at GMT0300, the pair is trading at 1.3074, with the USD trading slightly lower against the CAD from Friday's close.

The pair is expected to find support at 1.3039, and a fall through could take it to the next support level of 1.3004. The pair is expected to find its first resistance at 1.3123, and a rise through could take it to the next resistance level of 1.3172.

Amid lack of economic releases in Canada today, traders would focus on global macroeconomic events for further direction.

The currency pair is trading below its 20 Hr moving average and showing convergence with its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the AUD declined 0.65% against the USD and closed at 0.6980 on Friday.

LME Copper prices declined 0.7% or $43.0/MT to $5857.0/MT. Aluminium prices rose 0.5% or $8.0/MT to $1779.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.6986, with the AUD trading 0.09% higher against the USD from Friday’s close.

The pair is expected to find support at 0.6954, and a fall through could take it to the next support level of 0.6921. The pair is expected to find its first resistance at 0.7023, and a rise through could take it to the next resistance level of 0.7059.

Looking ahead, traders would closely monitor Australia’s NAB business conditions and business confidence, both for June, scheduled to release overnight.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Gold declined 1.61% against the USD and closed at USD1402.00 per ounce on Friday, amid broad strength in the US dollar.

In the Asian session, at GMT0300, the pair is trading at 1400.10, with gold trading 0.14% lower against the USD from Friday’s close.

The pair is expected to find support at 1385.07, and a fall through could take it to the next support level of 1370.03. The pair is expected to find its first resistance at 1418.67, and a rise through could take it to the next resistance level of 1437.23.

The yellow metal is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Silver declined 2.25% against the USD and closed at USD15.02 per ounce on Friday, tracking losses in gold prices.

In the Asian session, at GMT0300, the pair is trading at 15.03, with silver trading 0.07% higher against the USD from Friday’s close.

The pair is expected to find support at 14.86, and a fall through could take it to the next support level of 14.68. The pair is expected to find its first resistance at 15.26, and a rise through could take it to the next resistance level of 15.49.

The white metal is trading below its 20 Hr and 50 Hr moving averages.