Markets Await BOJ Announcement Tomorrow

Jul 30 18, 09:04 GMT

General Trend: Asian equity markets trade mostly lower, in line with Friday’s US session
Chinese equities move between gains and losses
Shares of Tencent hit lowest level since Dec, decline over 2% on session
Nasdaq Futures extend losses
BMW raised prices in China on tariff impact
Cautious trading for the Nikkei ahead of Tuesday’s BoJ decision and forecasts
BoJ acts again to slow rise in yields
PBOC skipped OMO for the 7th straight session, says month-end fiscal spending to support liquidity
PBoC set the yuan weaker: The Chinese currency faces increasing short-term depreciation risk (Chinese press)
There is renewed speculation that China might cut the RRR in H2 (Chinese Press)
Japanese companies which may today report earnings include Sumitomo Mitsui Financial, Aozora Bank, Daiwa Securities, Mitsubishi Electric, Japan Exchange, Oriental Land, TDK, TEPCO, Shionogi and Capcom.
China official July PMI data due on Tuesday

Headlines/Economic Data

Japan

Nikkei 225 opened -0.4%
(JP) BOJ AGAIN CONDUCTS FIXED-RATE JGB PURCHASE OPERATION FOR an unlimited amount of 5-10-YR JGBs at 0.10% (3rd operation within the past week)
TOPIX Retail Trade index -0.7%, Information and Communications -0.6%, Real Estate -0.6%; Marine Transportation +0.8%
Japanese megabanks outperform ahead of earnings from Sumitomo Mitsui and BoJ policy decision
(JP) Japan Jun Retail Sales m/m: 1.5% v 1.5%e; Retail Trade y/y: 1.8% v 1.7%e
Inpex, 1605.JP Notes start of gas production at the Ichthys project, sees start of shipments towards the end of H1 FY18
JGB (JP) Japan 10-year JGB yield near 0.105%
Mitsubishi Electric, Reports Q1 Net ¥47.6B v ¥56.9B y/y; Op ¥61.6B v ¥75.5B y/y; Rev ¥1.05T v ¥1.03T y/y; Affirms guidance

Korea

Kospi opened -0.2%
E-Mart, 139480.KR New discount store seeing an avg of 10K customers per day; sales have easily exceeded initial target in 1st month of opening – Korean press
(KR) South Korea Industry Min Paik announces KRW1.5T investment over the next 10-yrs to maintain chip industry competitiveness – Korean press
(KR) South Korea Jun Department Store Sales y/y: 5.4% v 1.8% prior; Discount Store Sales y/y: +0.2% v -4.5% prior

China/Hong Kong

Hang Seng opened -0.6%, Shanghai Composite -0.1%
Hang Seng Info Tech index -2.3%, Consumer Goods -1.6%, Services -0.9%, Energy -0.6%, Financials -0.5%
(CN) China Securities Journal Commentary: PBoC may lower the reserve ratio requirement (RRR) in Q3
(CN) China CNY currency (Yuan) faces increasing depreciation risk in the short-term – China Securities Journal
(CN) China targeted policy does not mean boost for property market – Chinese Press
(CN) China PBoC Open Market Operation (OMO): Skips OMO for the 7th consecutive session; Net drains CNY130B v drains CNY0B prior
(CN) China PBoC sets yuan reference rate at 6.8131 v 6.7942 prior
USD/CNY trades above 6.84 for the first time since late June 2017
(CN) China State Councillor Wang Yi: China and US should solve trade frictions in WTO framework; China remains open to dialogue

Australia/New Zealand

ASX 200 opened -0.0%
ASX 200 Resources index -0.8%, Financials -0.6%; Telecom +1%
(AU) Australia held special elections in 4 states to fill seats emptied by dual citizenship issues, results saw no changes and general election in 2018 less likely
RMS.AU Guides initial FY19 gold production 200-220K ozs at AISC of A$1,150-1,250/oz, Guides Q1 50-54K ozs at AISC A$1,250/oz
(AU) Moody’s: Smaller Australia banks raising home loan rates opening door for major banks to follow
Pacific Edge, [+23%], PEB.NZ Accepted NZ$2.6M investment offer from Manchester Management Company, to issue ~8.2M shares at NZ$0.32/share

North America

(US) US Supreme Court Justice Ginsburg has indicated she expects to remain on the court for 5 years or more – CNN
(US) President Trump said to have told aides he “hates wind power” – US press
(US) US Fed Researchers said to study metro-area data for clues on inflation during periods of low unemployment – US financial press
(US) Canada, EU, Japan, Mexico and South Korea to meet in Geneva next week to discuss their response to Trump’s threat to impose tariffs on foreign auto imports – press
CBS [CBS]: May create special committee of board to oversee investigation of accusations against CEO Les Mooves, board may discuss whether Moonves should ‘step aside’ pending a probe into the harassment allegations – US financial press

Europe

(IT) Italy Deputy Prime Minister (PM) Di Maio said a referendum on whether Italy should leave the euro is not in the governing contract and will not be pursued – financial press
BMW.DE To raise the prices of the X5 by 4% and X6 by 7% made in the US and sold in China in response to tariffs, effective July 30th – FT
(UK) Foreign Sec Hunt: China and UK agree to explore post-Brexit free trade deal – Comments alongside China Foreign Min Wang Yi

Levels as of 01:30ET

Hang Seng -0.8%; Shanghai Composite -0.3%; Kospi -0.2%; Nikkei225 -0.7%; ASX 200 -0.4%
Equity Futures: S&P500 -0.3%; Nasdaq100 -0.5%, Dax -0.2%; FTSE100 -0.1%
EUR 1.1650-1.1665; JPY 110.90-111.16; AUD 0.7386-0.7406;NZD 0.6792-0.6804
Aug Gold -0.3% at $1,219/oz; Sept Crude Oil +0.3% at $68.89/brl; Sept Copper -0.7% at $2.78/lb