General Trend:
- Financials continue to weigh on the Hang Seng; Bank of East Asia down over 7% on profit warning
- Various HK banks reopen branches that were closed due to protests
- Telecom Services and IT firms are among the decliners in Shanghai
- Mining stocks rise in Australia as China iron ore futures hit another record high
- Brent crude extends gains in Asian trading with the focus on recent tanker attacks in the Gulf of Oman
- Aussie 3-year yield declines as more analysts call for below 1% RBA cash rate
- NZD declines as manufacturing PMI hit multi-year low
- Commodity currencies trade generally weaker ahead of China data
- China May data (including industrial production) due to be released at 0700 GMT (3 AM EST)
- Bank of Japan (BOJ) due to hold policy meeting next week on June 19-20th (Wed-Thursday)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- Navitas, Syrah, Seven West Media to be removed from the S&P ASX 200 index; Clinuvel, Service Stream and Austal to be added to the index
- (AU) NAB now expects the RBA to also cut its cash rate to 0.75% in Nov 2019 (previously said it saw rate cuts in June and Aug 2019)
- (AU) RBC now expects the RBA to cut the cash rate to 0.5% by May 2020
- (NZ) New Zealand May Business Manufacturing PMI: 50.2 v 52.7 prior (multi-year low)
China/Hong Kong
- Shanghai Composite opened +0.1%, Hang Seng -0.4%
- (HK) Hong Kong lawmakers are reportedly open to extending extradition bill debate – South China Morning Post
- (HK) Banks including HSBC and Bank of China HK said to raise mortgage rates for certain loans – HK media
- (CN) Former PBoC Gov Zhou: Trade war could trigger global currency depreciation
- (CN) China Commerce Ministry (MOFCOM) Spokesman Gao Feng: China to fight to the end if U.S. insists to escalate; China will not back down on principle issues in trade talks (comments from June 13th)
- (CN) China to raise anti-dumping duties on US (up to 147.8%) and EU (up to 60.8%) seamless steel tubes; effective immediately
- (CN) China PBoC sets yuan reference rate: 6.8937 v 6.8934 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 28-day reverse repos v CNY100B combined in 7-day and 28-day prior; Net CNY100B injected v CNY90B drain prior
Japan
- Nikkei 225 opened +0.1%
- (JP) Nikkei 225 June Futures and options said to settle at ~21,061
- (JP) Japan Economy Min Motegi: Exchanged view on trade ‘candidly’ with USTR Lighthizer (as expected), declines to comment on details; will meet with Lighthizer before G20
Korea
- Kospi opened -0.3%
- (US) US to cut tariffs on South Korea hot-rolled steel – Korea Press
- (KR) South Korea sells KRW300B v KRW300B indicated in 50-year bonds: avg yield 1.650% v 1.880% prior; bid to cover 1.82x
- (KR) South Korea May Export Price Index M/M: 2.6% v 0.5% prior; Y/Y: 0.4% v -0.4% prior
Europe
- (US) Sec of State Pompeo: Iran is responsible for today’s tanker attacks; Iran continues to actively work to interrupt flow of oil
- (US) US reportedly has video of Iranian military removing unexploded mine from side of Japanese tanker – US Press
- (UK) UK govt reportedly agrees with US assessment that Iran was responsible for attacks on two Gulf tankers – UK press
- (IR) Iran Mission to UN: Rejects US claims as “unfounded” regarding the Gulf of Oman tanker attacks – Iranian Press
- US Navy Destroyer USS Mason heading to Gulf of Oman to scene of attacks on oil tankers
Levels as of 1:20 ET
- Nikkei 225, -0.3%, ASX 200 flat, Hang Seng -0.5%; Shanghai Composite -0.4%; Kospi -0.5%
- Equity Futures: S&P500 +0.1%; Nasdaq100 -0.2%, Dax flat; FTSE100 +0.2%
- EUR 1.1288-1.1270 ; JPY 108.40-108.26 ; AUD 0.6919-0.6891 ;NZD 0.6574-0.6527
- Gold +0.5% at $1,349/oz; Crude Oil 0.5% at $52.54/brl; Copper -0.1% at $2.656/lb
