Asia Summary
Asian equity markets opened slightly higher before falling nearly 1% across the board on continued tensions with North Korea. The US has affirmed that all options remain on the table when it comes to North Korea. USD took safety flows on the continued tension, though outside of the NZ$ there were no large moves. Moves likely to remain a bit volatile on thinner volume, as we exit the peak of earnings season and get knee deep in the largest summer holiday month. China’s yuan has been steadily appreciating recently, with today’s setting the highest since mid-September, and is up ~4% so far in 2017.
The Kiwi fell 0.7% to 0.7300 after RBNZ kept cash target rate unchanged at 1.75%. Gov Wheeler said that RBNZ is still very much Neutral on rates and for foreseeable future does NOT see OCR increasing. He did confirm monitors "traffic light system" for currency intervention ‘closely’, won’t comment on whether currency strength is affecting the system. Later speaking to Parliament said intervention in FX market is always open to us, have intervened in the past, Then reiterated that he does not feel rate cut is needed at this time.
Key economic data
(NZ) New Zealand July Retail Card Spending M/M: -0.5% v 0.2% prior; Total Card Spending M/M: -0.7% v 8.3% prior
(JP) JAPAN JUN MACHINE ORDERS M/M: -1.9% V +3.6%E; Y/Y: -5.2% V -1.1%E
(JP) JAPAN JULY PPI M/M: 0.3% V 0.2%E; Y/Y: 2.6% V 2.3%E
(UK) JULY RICS HOUSE PRICE BALANCE: 1% V 9%E
Speakers and Press
China
(CN) Said that China Govt has summoned steel execs, regulators, bourse to discuss price surge – financial press
(CN) China propaganda chief visited govt workers holidaying at the resort of Beidaihe, signaling that an annual conclave of senior leaders was happening before an autumn party congress – Chinese press
Australia/New Zealand
(NZ) RBNZ Gov Wheeler: Still very much in Neutral on rates, for foreseeable future does NOT see OCR increasing; Structural factors weigh on inflation globally – post rate decision press conference
(NZ) RBNZ Gov Wheeler: Intervention in FX market is always open to us, have intervened in the past, always assessing criteria; Do not feel rate cut is needed – speaking to parliamentary committee
Korea
(KR) North Korea govt: our military will have a strike plan against Guam prepared by mid-August, then await orders from our leader
Japan
(JP) Japan publicly traded foreign stock investment trust total assets likely reached record high at end of July – Nikkei
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.2%, Hang Seng -1.6%, Shanghai Composite -1.1%, ASX200 -0.1%, Kospi -1.1%
Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.3%, FTSE100 -0.4%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1770-1.1733; JPY 110.18-109.89; AUD 0.7911-0.7870; NZD 0.7368-0.7299
Dec Gold +0.3% at 1,282/oz; Sept Crude Oil 0.0% at $49.55/brl; Sept Copper -0.1% at $2.93/lb
(CN) China PBOC OMO injects CNY90B in 7 and 14-day reverse repos v CNY140B prior; Injects net CNY30B v CNY0B prior
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT: 6.6770 V 6.7075 PRIOR (strongest setting since Sept 29th)
Equities notable movers
Hong Kong/China
Wanda Hotel Development,169.HK To acquire Wanda Culture Travel Innovation from a company indirectly owned by Wang Jianlin for CNY6.3B – filing; +20.8%
Japan
Toshiba,6502.JP Reports Q1 Net ¥50.3B v ¥79.8B y/y, Op ¥96.7B v ¥16.3B Rev ¥1.14T v ¥1.06T y/y; +1.4%
Toshiba, 6502.JP Reports delayed FY16 results, Net loss ¥966B v loss ¥460B y/y, Rev ¥4.87T v ¥5.15T y/y
Shiseido, 4911.JP Reports H1 Net ¥18.8B v ¥24.5B y/y; Op ¥34.7B v ¥19.9B y/y; Rev ¥472.1B v ¥412.3B y/y; +14.%
Australia
Virgin Australia,VAH.AU Reports FY17 Net loss A$220.3M v loss A$260.9M y/y; Rev A$5.05B v A$5.02B y/y; +5.7%
Origin, ORG.AU To recognize ~A$1.2B non-cash impairment charge in H2 from ALPNG, sees A$357M impairment related to Lattice; -1.0%
AGL.AU Reports FY17 Underlying Profit A$802M v A$788Me; underlying EBIT A$1.37B v A$1.36Be; Rev A$12.6B v A$11.9Be; +1.2%
Boart Longyear, BLY.AU Reaches settlement with First Pacific Advisors; +9.4%
India
Tata Motors,TTMT.IN Reports Q1 (INR) Net 31.8B v 22.4B y/y, Rev 598.2B v 597.9Be; -4.6%
