Asian Indices Trade Mixed After Record Close On Nasdaq

General Trend:

• Japanese equities underperform after recent gain and Yen strength, exporters are among the decliners
• Kospi reverses opening gain in the face of headlines related to North Korea; Samsung opened higher after recent court ruling, but later pared gain
• Australian equities outperform after returning from holiday, sectors moving higher include Financials and Energy
• Shares of Cathay Pacific, Air China and Swire Pacific all halted in Hong Kong; Air China and Swire Pacific are large Cathay shareholders; Cathay to receive bailout from HK gov’t
• Casinos rise in HK amid positive broker comments
• Geely rises over 3%, China’s May retail car sales had first rise in 11 months
• Consumer Discretionary firms are among the early gainers in Shanghai
• Taiwan Semi affirmed 2020 guidance, comments on expected US plant (AGM comments)
• SembCorp Marine drops over 34% in Singapore on rights offering
• JPY extends earlier gain in Asia ahead of Wed’s Fed decision, US bond yields extend declines; JPY/KRW rises over 0.6% amid concerns related to North Korea; AUD/JPY pulls back from recent gains amid Nikkei decline, Aussie bond yields also decline
• China bond yields decline as PBOC injects liquidity, US 10-year Treasury yields decline in Asia

Headlines/Economic Date

Australia/New Zealand

• ASX 200 opened +0.7%
• (AU) Australia May NAB Business Confidence: -20 v -45 prior; Conditions: -24 v -34 prior
• (AU) Australia May ANZ Job Advertisements M/M: +0.5% v -53.1% prior
• (AU) Australia sells A$2.0B v A$2.0B indicated in 0.25% Nov 2024 bonds, avg yield 0.3865%, bid to cover 4.0x
• (AU) Reserve Bank of Australia (RBA) adds A$3.58B to banking system through repos vs A$513M prior
• (AU) Australia Treasurer Frydenberg: extending asset writeoff plan – TV interview
• (NZ) New Zealand Jun Prelim ANZ Business Confidence: -33.0 v -41.8 prior; Activity Outlook: -29.1 v -38.7 prior
• (NZ) New Zealand May ANZ Heavy Truckometer M/M: +86.9% v -45.0% prior

China/Hong Kong

• Hang Seng opened +0.5%, Shanghai +0.1%
• Cathay Pacific [293.HK]:To undergo HK$40B capital restructuring; Hong Kong Govt reported to bail out Cathay Pacific with a HK$30B loan and equity stake – China press
• Alibaba [9988.HK]: Reported to recruit 5K employees globally for cloud unit by end of FY20 – Press
• (CN) Delistings by A-share companies in China to rise in 2020, notes factors including low stock prices and move to increase the quality of listed firms – China Daily
• (CN) China May retail car sales 1.64M units, +1.9% y/y (first rise in 11 months) – PCA (Industry association) [from June 8th]
• (CN) China PBOC sets Yuan reference rate: 7.0711 v 7.0882 prior (strongest CNY fix since May 6th)
• (CN) China PBoC Open Market Operation (OMO): Injects CNY60B in 7-day reverse repos v CNY120B prior; Net CNY60B v Net inject CNY120B prior
• (CN) Pres Trump reportedly does plan to sign legislation that would sanction Chinese officials over Uigher crackdown in Xinjiang province – press
• (CN) China Govt Medical adviser (top expert) Zhong Nanshan: Coronavirus Vaccine potentially available “within months” for emergency use – press
• (CN) China reported to tell banks to cut structured deposits by ~33.3%; To make it easier for top companies to sell Panda Bonds – Press
• (HK) Hong Kong Chief Exec Lam: Has made proposals to Beijing (China) Govt to make Hong Kong a more prominent offshore Yuan hub

Japan

• Nikkei 225 opened -0.2%
• (JP) Japan May M2 Money Supply Y/Y: +5.1% v 3.1% prior; M3 Money Supply Y/Y: +4.1% v 3.0% prior
• (JP) Japan Apr Labor Cash Earnings Y/Y -0.6% v -1.0%e; Real Cash Earnings Y/Y: -0.7% v -1.1%e

Korea

• Kospi opened +1.1%
• (KR) North Korea state media: North Korea will cut off communication lines with South Korea ‘completely’ at noon today

Europe

• (LY) Libya National Oil Corporation: Armed force has entered state owned Sharara oilfield and told Corporation employees to stop working [note: Initial reports have not commented on whether operations at the field have been impacted]
• (UK) May BRC Sales LFL y/y: +7.9% v 5.7% prior

Levels as of 1:20 ET

• Nikkei 225, -0.5%, ASX 200 +2.4%, Hang Seng +1.6%; Shanghai Composite +0.6%; Kospi -0.4%
• Equity Futures: S&P500 -0.1%; Nasdaq100 +0.1%, Dax -0.3%; FTSE100 +0.1%
• EUR 1.1315-1.1284 ; JPY 108.54-107.91 ; AUD 0.7042-0.6982 ;NZD 0.6580-0.6526
• Gold -0.2% at $1,701/oz; Crude Oil +0.5% at $38.37/brl; Copper +0.3% at $2.589/lb