Aussie CPI Soft But Moving Into Target Range

Jul 25 18, 07:06 GMT

General Trend:

Asian equities trade mixed, in line with Tuesday’s US session
Shanghai Composite moves between gains and losses following advance on Tuesday’s session
China Merchants Bank reported H1 Net profit +14% y/y
Sinopec rises over 3%, expects to swing to an H1 profit
HNA Investment trades limit down after being resumed for trading
Telecom China Tower issued the expected pricing range for HK IPO
Mitsubishi Motors declines over 3% following quarterly earnings and guidance
LG Display reported mixed Q2 results, expects oversupply issue to remain prevalent for display industry
PBoC set the yuan at the weakest since June 2017
Australia Q2 CPI data mixed, headline inflation moves within target range while core remains below
New Zealand reports unexpected trade deficit in June amid higher fuel imports and decline in milk powder exports
Japanese automation company Fanuc may report earnings later today
Line Corp, Shin-Etsu Chemical, Advantest, Hitachi Construction and Nidec may also report.
US and European companies expected to report earnings on Wed include AMD, Boeing, Clariant, Coca-Cola, Dassault Systems, Deutsche Bank, Facebook, Fiat, Ford, Freeport McMoran, General Motors, Glaxo, STM, Santander, UPS, Visa and Vodafone.
South Korea Q2 prelim GDP data due for release on Thursday

Headlines/Economic Data

Japan

Nikkei 225 opened +0.4%
TOPIX Iron and Steel index +2.5%, Electric Appliances +0.6%, Securities +0.6%
(JP) According to ‘BoJ watchers’ the central bank is not likely to make any policy changes until at least Oct 2018 – Nikkei
Toyota Motor, 7203.JP To close plant in Shizuoka Prefecture by 2020; US auto tariffs may make it difficult to meet 3M domestic vehicle production target – Nikkei
7203.JP Planning to double China production by early 2020s, targeting China production of 2M units/year – Japan press
(JP) Japan PM Abe increasingly likely to secure a 3rd consecutive term as LDP president with a key rival Fumio Kishida declining to declare candidacy for the vote this fall – Nikkei

Korea

Kospi opened +0.2%
LG Display, 034220.KR Reports Q2 (KRW) Net -297B v -226Be; Op -228B v -247Be; Rev 5.6T v 5.6Te
LG Chem, [+5%], 051910.KR Reports Q2 (KRW) Net 477.2B v 484.4Be; Op 703.3B v 696.8Be; Rev 7.1T v 6.9Te
(KR) South Korea Economic Affairs Aide Yoon Jong-won: South Korea economy in general doesn’t seem problematic

China/Hong Kong

Hang Seng opened +0.9%, Shanghai Composite +0.2%
Hang Seng Services index +3%, Energy +1.8%, Consumer Goods +0.9%, Info Tech +0.8%, Property/Construction +0.7%, Industrial Goods +0.7%, Financials +0.6%
(CN) China PBoC to be more flexible in implementing monetary policy – Chinese Press
(CN) China PBoC Open Market Operation (OMO): Skips OMO for the 4th consecutive session; Net drains CNY60B v drains CNY70B prior
(CN) CHINA PBOC SETS YUAN REFERENCE RATE AT 6.8040 V 6.7891 PRIOR (weakest setting since late June 2017)

Australia/New Zealand

ASX 200 opened +0.2%
ASX 200 Telecom index -0.8%, Utilities -0.7%, Financials -0.5%
(NZ) NEW ZEALAND JUN TRADE BALANCE (NZ$): -113M V +200ME; 12-MONTH YTD: -4.03B V -3.68BE
(AU) AUSTRALIA Q2 CPI Q/Q: 0.4% V 0.5%E; Y/Y: 2.1% V 2.2%E (1st reading in target range in 10 quarters)
(NZ) New Zealand Q2 working age population +18.1K (smallest rise since 2014)
(AU) Australia Jun Skilled Vacancies m/m: -1.0% v -1.2% prior
CSR, [+2.5%], CSR.AU Confirms starting review of Virdian, looking at all options including sale; seeing improvement in ANZ, on track to boost earnings
Medical Developments International, [-15%], MVP.AU Penthrox clinical program put on hold by FDA pending a letter outlining outstanding issues and concerns
(AU) Analysts note that Australia CPI was soft despite large rise in fuel prices which leaves room for RBA to hold rates well into 2019 – US press

Other Asia

(PH) IMF: Affirms Philippines 2018 GDP growth forecast at 6.7%, also sees 2019 growth at 6.7%; may need to further tighten monetary policy, rate moves are appropriate for price stability

North America

US equity markets ended mixed: Dow +0.8%, S&P500 +0.5%, Nasdaq flat, Russell 2000 -1.1%
S&P 500 Materials +1.3%, Energy +1.3%
(US) Weekly API Oil Inventories: Crude: -3.2M v +0.6M prior
(US) SEMI: Jun North America Billings $2.48B, -8.0% m/m and +8.1% y/y
PIR Comments on Proposed Tariff: does not expect financial results in fiscal 2019 to be materially affected; of net sales expected to be derived from products produced in China ~50% is expected to consist of product classes subject to the proposed tariffs
(MX) Mexico Incoming Foreign Minister Marcelo Ebrard: Trump disclosed in letter that the 2 countries should increase cooperation
(US) US President Trump: Reiterates the US and EU should drop all tariffs and trade barriers

Europe

(DE) Germany DIHK Head says US President Trump’s tariffs may cost Germany €5.0B – German Press
(EU) EU Budget Commissioner Oettinger: EU would react in kind if Pres Trump levies new tariffs

Levels as of 01:30ET

Hang Seng +0.8%; Shanghai Composite +0.1%; Kospi -0.3%; Nikkei225 +0.4%; ASX 200 -0.3%
Equity Futures: S&P500 -0.2%; Nasdaq100 -0.1%, Dax -0.0%; FTSE100 +0.7%
EUR 1.1676-1.1698; JPY 111.15-111.38; AUD 0.7360-0.7449;NZD 0.6785-0.6812
Aug Gold -0.0% at $1,225/oz; Sept Crude Oil +0.3% at $68.72/brl; Sept Copper +0.3% at $2.81/lb