Asian Markets Trade Cautiously Ahead Of Fed Meeting

General Trend:

• Hang Seng rises ahead of possible press briefing by HK Chief Executive Lam
• Utilities weigh on equities in Japan
• Australian steelmaker Bluescope declines on reduced guidance
• RBA June Minutes: Lower interest rates were not the only policy option
• Australia house price declines accelerated in Q1
• PBoC continues to inject liquidity amid focus on end-June interbank liquidity conditions
• BoJ Gov Kuroda outlines issues that will be debated at this week’s policy meeting (June 19-20th)
• Markets remain focused on this week’s US Fed meeting (June 18-19th)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened 0.0%
• (AU) RESERVE BANK OF AUSTRALIA (RBA) JUN MINUTES: FURTHER POLICY EASING MORE LIKELY THAN NOT IN PERIOD AHEAD
• (AU) AUSTRALIA Q1 HOUSING PRICE INDEX Q/Q: -3.0% V -2.6%E; Y/Y: -7.4% V -6.9%E
• BSL.AU Cuts FY19 underlying EBIT A$1.35B (prior A$1.4B); to extend buyback by up to A$250M
• COL.AU Announces updated strategy: targeting A$1.0B in cumulative cost savings by FY23; Revenue growth expected to be at least in line with market growth over long term
• (AU) Australia Treasurer Frydenberg: To introduce ~A$158B income tax package during first week of Parliament
• RSG.AU Granted approval to IPO in London, trading expected to start on June 20th
• (AU) Australia Bureau of Agricultural and Resources Economic (ABARES) cut its 2019/20 wheat exports forecast by 18% to 11.7M tons; cites drought

Japan

• Nikkei 225 opened -0.1%
• (JP) Bank of Japan (BOJ) Gov Kuroda: Overseas economic developments will be discussed at rate review starting Wednesday; Uncertainty over global economic outlook is high; risks are on downside for global economy – Comments to Parliament
• (JP) Japan Government Spokesman Nishimura: Japan is watching Iran uranium cap developments
• (JP) Japan Ministry to order Tateru [1435.JP] to suspend operations, cites alleged manipulation of data related to borrowers of commercial loans – Japanese Press
• (JP) Japan Fin Min Aso: Likely that US/China meeting will happen during G20
• (JP) Japan MoF sells ¥1.9T v ¥1.9T prior in % coupon 5-year JGB: avg yield: -0.228% v -0.170% prior, bid to cover: 4.51x v 4.94x prior
• (JP) Japan Steel Industry Association Head: Sees some slowdown in steel demand citing the US-Trade war; closely watching China steel exports amid signs of slowing demand

Korea

• Kospi opened -0.1%
• 005930.KR Head of Chip Logic: Open to M&A opportunities to grow neural processing chip
• (KR) China President Xi to visit North Korea later this week between Jun 20-21st for State visit
• (KR) South Korea nuclear envoy is headed to the US trying to revive talks about denuclearizing North Korea – Yonhap

China/Hong Kong

• Hang Seng opened +0.2%; Shanghai Composite opened +0.1%
• (CN) CHINA MAY NEW HOME PRICES M/M: 0.7% V 0.6% PRIOR; Y/Y: 10.7% V 10.7%PRIOR
• (CN) China regulator urged interbank liquidity support for smaller non-banks – financial press
• (CN) China Ministry of Finance (MoF) researcher: China may increase its muni bond sales quota for 2019
• (CN) Some measures show that bank liquidity in China has remained tight amid May government takeover announcement related to Baoshang Bank – US financial press
• (CN) China PBoC Open Market Operation (OMO): Injects CNY90B in 14-day reverse repos v CNY150B prior; Net CNY80B injected v CNY120B injected prior
• (CN) China PBoC sets yuan reference rate: 6.8942 v 6.8940 prior

North America

• (US) 320 representatives from US manufacturers, retailers and other companies and trade groups are expected to appear over seven days of hearings with officials to speak against China tariff implementation
• (US) Acting Defense Sec: Approved additional 1,000 troops to Middle East due to Iran threat (in addition to the already increased troops)
• (US) APR NET LONG-TERM TIC FLOWS: $46.9B V -$28.4B PRIOR; TOTAL NET TIC FLOWS: -$7.8B V -$8.1B PRIOR; China Total holding of US Treasuries: $1.113T v $1.12T prior (2-year low for China holdings)
• S Reportedly US DoJ will approve T-Mobile deal within next few days – CNN

Europe

• (UK) MPs Javid or Raab reportedly are expected to be defeated in Tory leadership contest tomorrow as support for Rory Stewart surges – UK’s The Sun
• (UK) Chancellor of the Exchequer Hammond (Fin Min) said to be prepared to resign over PM May spending plans – press

Levels as of 1:20 ET

• Nikkei 225, -0.9%, ASX 200 +0.5%, Hang Seng +0.7%; Shanghai Composite -0.1%; Kospi +0.3%
• Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.2%; FTSE100 +0.1%
• EUR 1.1235-1.1217 ; JPY 108.59-108.25 ; AUD 0.6858-0.6832 ;NZD 0.6501-0.6490
• Gold +0.2% at $1,345/oz; Crude Oil flat at $51.93/brl; Copper -0.1% at $2.648/lb