China MOFCOM Indicates Some Progress On Trade Talks With US

Jun 07 18, 07:09 GMT

General Trend:

Asian equity markets opened higher following yet another record high for the Nasdaq
Financials in Asia trade generally higher
Chinese steel producers supported by rise in prices; China launces environmental inspections
China National Energy Administration (NEA) says to maintain support for solar industry
China confirms issuance of rules related to China Depositary Receipts (CDRs), announces related fund launches
McDonald’s Japan reports 30th straight month of SSS increases
Australian Iron ore M&A: Fortescue raises stake in Atlas Iron, seeks to block offer from Mineral Resources
Asian bond yields generally track Wednesday’s gains in German and US Treasury yields
Foreigners sell Malaysian bonds amid the May elections
Japanese selling of foreign bonds jumps in recent weekly period, some suggests selling of European bonds
EUR/USD adds to gains seen on Wednesday’s session, recent ECB comments in focus
AUD/JPY declines over 0.4%, USD/JPY moves below ¥110: Australia April trade surplus misses estimates, exports decline
China weekly pork prices rise amid recent trade spat with the US
China Commerce Ministry confirmed talks with the US related to energy and agriculture
China monthly Foreign Exchange reserves data may be released later today, trade balance may come on following session
Japan final Q1 GDP data due on Friday, upward revision expected
Australia expected to sell A$2.5B in May 2030 bonds on Friday

Headlines/Economic Data

Japan

Nikkei 225 opened +0.5%; closed +0.9%
TOPIX Securities index +1.5%, Iron & Steel +0.9%
Japanese automakers trade generally higher, track earlier gains in the US
Megabanks gain amid rise in US and European bond yields
(JP) Japan revised Q1 GDP figures (due on Friday) expected to show upward revision due to Capex – financial press
(JP) Japan Investors Net Buying of Foreign Bonds: -¥1.67T v -¥700.2B prior week; Foreign Net Buying of Japan Stocks: -¥527.6B v -¥380.0B prior week
(JP) Japan May Official Reserve Assets: $1.25T v $1.26T prior
(JP) Japan Chief Gov Spokesperson: Japan will work persistently on US tariff issue

Korea

Kospi opened +0.6%
(KR) Satellite imagery shows North Korea has destroyed a missile test stand – 38North blog
(KR) Reportedly USA is hoping to come up with a joint document with #NorthKorea, drawing on a statement issued in 2005 at 6-party (2 Koreas, China, US, Japan & Russia) talks aimed at curbing the North’s #nuclear ambitions – Korean press

China/Hong Kong

Hang Seng opened +0.7%, Shanghai Composite +0.2%
Hang Seng Financials index +0.9%, Telecom +0.6%; Utilities -0.6%
Shanghai Composite Property Sub-index rises over 1%
(CN) China CSRC issues rules on CDRs: To strictly control size and pace of issuance
(CN) China Commerce Min: Some ‘specific’ progress made on just completed trade talks, details in trade talks will US ‘are to be confirmed’; to implement consensus reached in Washington
(CN) Global Times: China still preparing for worst’ in US trade dispute
(CN) China govt reportedly offered to buy $70B in US farm and energy products in return for Trump administration dropping tariff plans – press
(CN) China Securities Regulatory Commission (CSRC) confirms it has issued rules on China Depository Receipts (CDRs): To strictly control size and pace of issuance
(CN) China PBoC sets yuan reference rate at 6.3919 v 6.4040 prior
(CN) China PBoC Open Market Operation (OMO): Injects combined CNY40B in 7-day and 28-day reverse repos v skips prior: Net: drain CNY70B v CNY0B injected prior
GCL Poly, [+18%], 3800.HK Halted: To sell 51% stake in unit for $2B to Shanghai Electric
(HK) HK$ 1-month HIBOR +19bps to 1.30242% (highest level since 2008); 3-month 1.91893% (highest level since 2008)

Australia/New Zealand

ASX 200 opened +0.2%, closed +0.6%
ASX 200 Telecom index +1.5%, Resources +1.3%, Energy +1.2%, Financials +0.6%: REIT -0.2%
(AU) Australia national power grid is getting a surge of power from solar, the equivalent of a new power plant being built every season – local press
(AU) Australia sells A$500M v A$500M indicated in Aug 2018 notes, avg yield 1.8809%, bid to cover 2.85x
(AU) AUSTRALIA APR TRADE BALANCE (A$): 0.98B V 1.0BE
(NZ) New Zealand sells NZ$100M v NZ$100M in 2.50% Sept 2040 inflation indexed bonds, avg yield 2.1222%, bid to cover 1.71x

Other Asia

(MY) May Foreign holdings of Malaysia debt said to decline to MYR192.5B, -6.3% m/m (multi-month low) – US financial press

North America

US equity markets ended higher: Dow +1.4%, S&P500 +0.9%, Nasdaq +0.7%, Russell 2000 +0.7%
S&P500 Materials +1.9%, Financials +1.8%
COST Reports May SSS (ex-gas) 8.0%; US SSS (ex-gas) 8.7% v 5.6%e
Twitter [TWTR] prices convertible note offering
(US) Follow Up: Warren Buffett and JPMorgan CEO Dimon said to urge companies to stop issuing quarterly financial guidance – US financial press
(US) President Trump said to be planning to adopt a confrontational tone at G7 in responds to the other 6 joining together to pressure him on tariffs – US press
(US) DOE CRUDE: +2.1M V -2ME

Europe

(UK) PM May said to be keeping Brexit supports in the dark about her backstop plans – UK press
(G7) Official: No joint statement that wouldn’t mention Paris accord; statement should state trade be open, free and fair
(DE) Germany Fin Min Scholz said ESM should not be allowed to invest in corporate bonds – German Press

Levels as of 02:00ET

Hang Seng +0.7%; Shanghai Composite -0.1%; Kospi +0.7%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax -0.0%; FTSE100 -0.0%
EUR 1.1802-1.1775; JPY 110.22-109.86; AUD 0.7672-0.7644;NZD 0.7050-0.7031
Aug Gold +0.0% at $1,301/oz; Jul Crude Oil +0.6% at $65.14/brl; Jul Copper +0.2% at $3.28/lb