Asia Summary
The markets were mixed in the region, with the USD weaker as the US/Russia investigation related to President Trump’s election continues to widen and Jared Kushner will face a closed door hearing with the US Senate Intelligence Committee today. This combined with the lack of progress on the healthcare bill and tax reform puts US growth into question. The IMF confirmed doubts with its updated GDP forecasts. US was cut for both 2017 and 2018. Canada was raised and given the strongest outlook for 2017. UK was also cut, while France, Germany and Italy were raised.
China increased cash injections through its daily reverse repurchase operations by injecting CNY350B in 7-day and 14-day (the most funds in five weeks), this followed money rates rising last week. According to regional analysts CNY540B of reverse repos are coming due this week and such liquidity is likely to remain tight. Bank of Japan (BOJ) cut its 5-10 year JGB purchases to ¥470B from ¥500B. Markets reacted little as the markets have been expecting a reduction in purchases, though considered a bit earlier than expected.
Key economic data
(JP) JAPAN JUL PRELIM PMI MANUFACTURING: 52.2 V 52.4 PRIOR FINAL (8-month low)
(HK) Macau Jun Visitors 2.38M, -7.5% m/m; +0.9% y/y
Speakers and Press
China
(CN) China Academy of Social Sciences (CASS) report says Q3 GDP may grow 6.8% y/y; Q4 6.7% and 2017 6.8% – Chinese Press
(CN) China Iron and Steel Association (CISA) VP Xinchuang: China should be bold in protecting the interests of its own businesses
USD/CNY (CN) PBOC Adviser: Yuan exchange rate may appreciate in H2
Hong Kong
(HK) Hong Kong Monetary Authority (HKMA) said to have checked property developers’ loans
Korea
(KR) South Korea parliament approves KRW11T extra budget plan Sunday July 23rd
(KR) South Korea said to seek capital gains tax increase for large shareholders – South Korean Press
Japan
(JP) In the local Sendai City mayoral elections, opposition candidate Kazuko Kori won – financial press
(JP) Japan Cabinet approval ratings decline in press polls: According to Mainichi Japan Cabinet approval rating fell 10ppts to 26%
Other
OPEC and non-OPEC officials to meet amid mounting concerns over global supply – financial press
OPEC Secretary-General Barkindo: While the rebalancing process may be proceeding at a slower than projected pace, it is expected to accelerate in H2
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.9%, Hang Seng +0.5%, Shanghai Composite +0.2%, ASX200 -0.7%, Kospi -0.2%
Equity Futures: S&P500 -0.2%; Nasdaq -0.2%, Dax -0.2%, FTSE100 -0.2%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1684-1.1658; JPY 111.20-110.77; AUD 0.7931-0.7904; NZD 0.7456-0.7433
Aug Gold 0.0% at 1,254/oz; Aug Crude Oil +0.2% at $45.85/brl; Sept Copper +0.1% at $2.72/lb
(JP) Bank of Japan (BOJ) cuts JGB buying of 5-10 yr to ¥470B from ¥500B
(CN) China PBOC OMO injects CNY350B in 7 and 14 day reverse repos v CNY140B prior
USD/CNY (CN) PBOC SETS YUAN REFERENCE RATE AT V 6.7410 V 6.7415 PRIOR
(KR) South Korea sells 20-year government bonds, avg yield 2.29%
(TH) Thailand sells THB20B in 3-month and 6-month treasury bills
Equities notable movers
Australia
Newcrest Mining,NCM.AU Reports Q4 gold production 552K ozs, -7.8% q/q; copper production 13kt, -41.3% q/q; +1.8%
Hong Kong/China
China Power International,2380.HK Profit Warning: H1 Profit to decrease over 70% y/y; -5.4%
Japan
Tokyo Electric Power, 9501.JP Underwater robot has captured images of what is likely to be melted nuclear fuel at the bottom of one of its damaged reactors – Nikkei; -0.4%
South Korea
Ottogi Corp,007310.KR Strength attributed to invitation to high-level business meeting with President Moon; +7.3%
Samsung Electronics,005930.KR Said to have cut FY17 TV target to 45M units (prior 48M units) – Korean press; -0.6%
Other
BMW, BMW.DE Denies claims it formed a cartel with Daimler and Volkswagen to hold down the prices of crucial technology and that they had agreed to install emissions equipment that was inadequate to do the job – financial press
