Singapore Enters First Technical Recession Since 2009

Jul 14 20, 06:11 GMT

General Trend:

Tech firms trade generally lower in China and HK (including Alibaba and Tencent) after losses on Nasdaq; Jack Ma said to cut stake in Alibaba; China state fund said to plan to sell more stock in cos; US may end audit watchdog agreement with China [relates to China companies listed in the US]
Financials trade generally weaker in HK and Shanghai; Trump advisers reportedly ruled out ending Hong Kong dollar peg as punishment for new security law (press)
HK gaming companies rise; China’s Guangdong province confirms will end quarantine for Macau arrivals beginning July 15th
Decliners in Japan include Softbank after weakness in US tech sector; Japanese Transports and Retail cos. also drop
Declining sectors in Australia include Resources and Financials
Thailand Central Bank commented on non-standard monetary policy
BoJ rate decision and economic forecasts due on July 15th (Wed)
US companies expected to report results during the NY morning include Citi, Delta, JPMorgan, Wells Fargo

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.4%
(AU) Australia total payroll jobs at end of June vs mid-March: -5.7%; June 27th Weekly payrolls -1%
(AU) Australia June NAB Business Confidence: +1 v -20 prior; Conditions: -7 v -24 prior (First positive Bus Confidence since Oct 2019)
(AU) Victoria State reports 270 additional coronavirus cases v 177 prior
(CN) China Foreign Ministry issues travel advisory for Australia – press (from July 13th)
(AU) Australia sells A$17B in new Nov 2025 bond through syndication: avg yield 0.495%, bid to cover 2.98x
(NZ) New Zealand June REINZ House Sales y/y: +7.1% v -46.6% prior
(NZ) Reserve Bank of New Zealand (RBNZ) Banks reported decline in credit demand in H1, banks indicate lending standards are likely to become tighter
(NZ) New Zealand Debt Management Office (DMO): Issued NZ$4.5B in May 2041 bonds via syndication, yield was 31bps/2037 bond (update)

China/Hong Kong

Hang Seng opened -0.4%, Shanghai opened -0.2%
Alibaba [9988.HK]: Founder Jack Ma sells $9.6B in Alibaba shares, cuts stake to 4.8% (from 6.4%) – press
(CN) CHINA JUN TRADE BALANCE: $46.4B V $59.6BE
(CN) Follow up: China State Chip Fund (China Integrated Circuit Industry Investment) to cut investment stake in 2 additional tech companies – financial press
(CN) The first cos. have received regulatory approval to conduct IPOs under the new ChiNext system; the cos. are Beijing FengShang ShiJi Culture Media, Contec Medical Systems and Intelligent Technology – financial press
(HK) Trump advisers reportedly ruled out ending Hong Kong dollar peg as punishment for new China security law – press
(CN) US to formally oppose specific Chinese territorial claims in the South China Sea – press
(CN) China says it is firmly opposed to US statement on South China Sea; urges US to not disturb regional stability
(US) Pres Trump: China Phase 1 deal is intact; China is buying
Huawei: Reports H1 (CNY) Rev 454B, +13.1% y/y
(CN) China PBOC sets Yuan reference rate: 6.9996 v 6.9965 prior
(CN) China PBoC Open Market Operation (OMO): injects CNY30B in 7-Day reverse repos v Injects CNY50B via 7-day reverse repos prior; Net injection CNY30B v Net drain CNY50B prior

Japan

Nikkei 225 opened -0.7%
Softbank [9984.JP]: Said to consider having individual investors in Japan put cash into Vision Fund – Japanese press
Softbank [9984.HK]: Reportedly Softbank hires adviser to study options for its chip designer Arm Holdings, including sale or IPO – press
Tokyo Steel [5423.JP]: Maintains Aug H-Beam price at ¥81K/ton, Hot Rolled Coil at ¥65K/ton
(JP) Japan May Final Industrial Production M/M: -8.9% v -8.4% prelim; Y/Y: -26.3% v -25.9% prelim
(JP) Japan reported to be considering Corporate Executives from EU and US to enter Japan – Japan Press
(JP) Japan Tax Chief Amari: Sees 3rd extra budget this year [in line with comments from late Jun]; Shortfall in Tax rev likely filled by JGB issuances; Budget will come once virus is controlled
(JP) Japan Econ Min Nishimura: Many nightlife related coronavirus tests were completed yesterday; Asks shops to comply with coronavirus guidelines; Could declare emergency if Japan infections continue to increase

Korea

Kospi opened -0.4%
(KR) South Korea President Moon: Announces ‘new deal’ plan (as expected), 10 ‘major’ projects will part of the new deal; Total KRW160T investment expected by 2025 (govt to finance KRW116T of this amount)
(KR) South Korea govt plans to boost minimum wage by 1.5% in 2021 – Korean press

Other Asia

(MY) Malaysia Warisan Party Leader: Country should call election
*(SG) SINGAPORE Q2 ADVANCE GDP Q/Q: -41.2% V -35.9%E; Y/Y: -12.2% V -10.5%E (ENTERS FIRST RECESSION SINCE Q1 2009)
(TH) Thailand Central Bank (BoT): Yield curve control is being considered as an option; 0% rate is unlikely

North America

(US) California Gov Newsom: closes indoor activities in bars and restaurants
(US) US and Canada border expected to remain closed until Aug 21st – Canada press
(US) Fed official Kent Kiteshew said prepared to consider further intervention in the municipal bond market – financial press

Europe

(UK) Jun BRC Sales LFL Y/Y: 10.9% v 7.9% prior
Huawei: UK reported to ban UK telecoms from purchasing new Huawei equipment by end of 2020, remove Huawei from all 5G networks by 2027 – Press

Levels as of 1:20 ET

Nikkei 225, -1%, ASX 200 -0.8% , Hang Seng -1.6%; Shanghai Composite -1.3%; Kospi -0.6%
Equity S&P500 Futures: +0.1%; Nasdaq100 +0.3%, Dax flat
EUR 1.1350-1.1335 ; JPY 107.36-107.11 ; AUD 0.6947-0.6925 ;NZD 0.6545-0.6524
Gold -0.8% at $1,799/oz; Crude Oil -2.4% at $39.16/brl; Copper +0.1% at $2.9133/lb