Trade Tensions Return After G7 Ends Without The Support Of US

Jun 11 18, 08:00 GMT

General Trend:

Regional equity markets opened mixed tracking Friday US session; trade tensions also returned to front and center after a difficult G7
S&P futures opened lower by 0.25%
After leaving, Trump tweets he will not endorse official G7 communique due to due to “false” statements made by Canada PM Trudeau; later followed by another tweet against trade with Canada
G7 Official Communique (with support from all but the US): We acknowledge free, fair and mutually beneficial trade is key engine for growth and jobs; We strive to reduce tariff barriers, non-tariff barriers and subsidies
German Chancellor Merkel expresses her disappointment in Trump’s response and says EU is ready with counter tariffs to US if needed
President Trump and North Korea Kim arrive in Singapore ahead of Summit on June 12th

Headlines/Economic Data

Japan

Nikkei 225 opened slightly lower
(JP) JAPAN APR CORE MACHINE ORDERS M/M:10.1% V 2.4%E; Y/Y: 9.6% V 3.8%E
(JP) Japan May Money Supply M2 y/y: 3.2% v 3.3%e; M3 y/y: 2.7% v 2.8%e
(JP) LDP-backed candidate Hideyo Hanazumi wins governor race in Niigata seen as a boost for nuclear power and a key ally to PM Abe – Japan press
Looking ahead: Japan PPI data expected tomorrow

Korea

Kospi opened +0.1%
(KR) North Korea agenda for talks with Trump: Expects that the historic summit talks would offer an important occasion in achieving peace and stability of the Korean peninsula; to focus on peace and denuclearization in talks – KCNA
(KR) North Korea said to have asked US to establish a liaison office – KBS
(KR) South Korea Fin Min Kim: There are various signs of change between North and South Korea; Asian countries must be wise, the wise build bridges, the foolish build walls
(KR) South Korea sells KRW1.8T v KRW1.8T indicated in 10-yr bonds at 2.74%; bid to cover 2.88x
(KR) South Korea cryptocurrency exchange CoinRail was hacked, sending Bitcoin lower – press
Looking ahead: North Korea Kim and US President Trump hold summit in Singapore

China/Hong Kong

Hang Seng opened +0.2%, Shanghai Composite -0.3%
(CN) China and Russia sign deal on nuclear; Russia affirms cooperation with China is at an unprecedented level – press
(CN) China cuts subsidy for solar power – press
Hong Kong Aircraft Engineering, 44.HK Swire Pacific makes HK$72/shr offer to privatize in a HK$3B deal
Luye Pharma, 2186.HK Starts phase 3 clinical trial for LY03005
(CN) China PBoC Open Market Operation (OMO): Skips OMO for the second consecutive session; Net drain CNY20B v CNY40B drain prior
(CN) China PBoC sets yuan reference rate at 6.4064 v 6.4003 prior
(HK) Hong Kong 1-month HIBOR rises to 1.49679%; 3-month rises to 1.96983% (both highest level since 2008)

Australia/New Zealand

ASX 200 closed for holiday
(NZ) New Zealand Q1 Manufacturing Activity q/q: 0.6% v 2.8% prior; Activity Volume q/q: 1.4% v 1.0% prior
(AU) Australia May Port Hedland Iron Ore Exports: 45.0Mt v 42.6Mt prior

Other Asia

(MY) Malaysia PM Mahathir: US is no longer a good example of free trade; growing countries need some protection on trade

North America

(US) President Trump: US will not endorse the G7 communique due to “false” statements made by Canada PM Trudeau – financial press citing tweets
RCII Completes strategic review; updates guidance based on materially improved performance; Did not get any sales offers meeting objectives

Europe

(CH) SWITZERLAND VOLLGELD REFERENDUM RESULTS: VOTERS REJECT MOTION TO ABOLISH TRADITIONAL BANK LENDING AND ALLOW ONLY MONEY CREATED BY THE SNB (AS EXPECTED)
(DE) German Chancellor Merkel: EU has prepared counter measures against the US tariffs on steel and aluminum; We wont allow us being ripped off over and over again, we will also act then
Rolls Royce, RR.UK Expected to announce job cuts totaling 4,000 this week, mostly middle managers and back office staff – UK press
(DE) Germany Foreign Min Altmaier: Europe will defend its interests against US tariffs; ready to talk about imbalances in trade

Levels as of 01:30ET

Hang Seng +0.4%; Shanghai Composite -0.4%; Kospi +0.6%; Nikkei 225 +0.5%; ASX200 closed
Equity Futures: S&P500 +0.1%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 +0.2%
EUR 1.1771-1.1808; JPY 109.31-109.84; AUD 0.7561-0.7673;NZD 0.7022-0.7047
Aug Gold -0.0% at $1,302/oz; Jul Crude Oil -0.2% at $65.58/brl; Jul Copper -0.4% at $3.29/lb