General Trend:
- Asian equity markets trade mixed after US declines
- Equities in China move between gains and losses
- Shanghai and Hong Kong property shares lag amid recent declines
- China property market remains in focus, government announced ‘special campaign’ against speculation
- China Commerce Ministry reiterates concerns related to potential US investment curbs
- Chinese yuan continues to weaken, seen as a move against pending trade war, some speculation now that this could turn into a currency war
- China announced crackdown related to sales of foreign bonds by corporates
- Japan May retail sales decline more than expected
- Reserve Bank of New Zealand (RBNZ) reiterated it was positioned to manage rate either up or down ; More analysts push back rate hike calls
- Australia government’s plan to cut corporate taxes derailed by political opposition
Headlines/Economic Data
Japan
- Nikkei 225 opened -0.3%
- TOPIX Retail Trade index -1.5%, Info & Communications -1.3%, Real Estate -1.1%, Iron & Steel -0.7%, Securities -0.6%; Marine Transportation +0.7%
- (JP) JAPAN PRELIM MAY RETAIL SALES M/M: -1.7% V -0.8%E
- JP) Japan Investors Net Buying of Foreign Bonds: +¥27.4B v +¥1.49T prior: Foreign Net Buying of Japan Stocks: -¥483.5B ¥ v -¥40.8B prior
- (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.10% (prior 0.10%) 2-yr JGBs; avg yield -0.128% v -0.147% prior; bid to cover 4.88x v 4.91x prior
- 4502.JP Shareholders defeated proposal which was opposed to Shire deal
Korea
- Kospi opened -0.6%
- (KR) North and South Korea said to plan to hold talks later today on connecting border roads – South Korean Press
- (KR) South Korea Fin Min Kim: Weakness in Korean Won currency (KRW) in line with global trend; Closely watching FX markets
- (KR) South Korea May Department Store Sales y/y: +1.8% v -0.2% prior; Discount Store Sales y/y: -4.5% v -4.5% prior
China/Hong Kong
- Hang Seng opened 0.0%, Shanghai Composite -0.5%
- Hang Seng Energy index +2.2%, Info Tech +1.1%, Industrial Goods -0.9%, Financials +0.6%; Services -0.9%, Utilities -0.6%, Property/Construction -0.2%
- (HK) There is speculation that Hong Kong may announce reduction in subsidized housing price – HK Media
- (CN) China NDRC said to consider banning the sale of 1-year US dollar denominated bonds – US financial press
- (CN) China May Swift Global Payments (CNY): 1.88% v 1.66% prior
- (CN) China PBoC Open Market Operation (OMO): injects CNY80B v CNY60B injected in 7-day reverse repos prior: Net: drain CNY100B v CNY150B drain prior
- (CN) China PBoC sets yuan reference rate at 6.5960 v 6.5569 prior (weakest setting since late Dec 2017)
- (US) Official: President Trump seeks to maintain investment environment open in the US, to use CFIUS to respond to China technology theft – closed door conference call (in-line with recent speculation)
- (CN) China Commerce Ministry (MOFCOM): US planned curbs on technology exports to China may ‘backfire’
- (CN) China implements home purchase restrictions on 3 cities this week to stop companies from buying residential property, and experts predict other cities will adopt similar measures soon – China Daily
- (CN) China Ministry of Finance: China will adjust tariffs on an array of imports from a number of Asia-Pacific countries , effective July 1st
- (CN) China Housing Ministry: to start special campaign against property market violations; to crack down on property irregularities in 30 major cities from now to end of year
- (CN) China state think tank CASS researcher Zhang: PBOC overall wants a weaker CNY currency (Yuan) in response to trade concerns
Australia/New Zealand
- ASX 200 opened +0.1%
- ASX 200 Energy index +1.6%, Resources +1.4%, Telecom +0.5%, Financials +0.4%; Consumer Discretionary -1.2%, REIT -1.2%
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%, AS EXPECTED
- STO.AU Board approved new dividend policy, seeks to pay dividend at target range of 10-30% of free cash flow per year ; to also consider additional returns to holders
- BHP.AU CEO Mackenzie: Portfolio will be about right following US shale asset sale; will review Nickel West following the US shale disposal and will focus on internal options to grow the business – AFR
- (AU) Australia May Job Vacancies: 5.7% v 5.4% prior
Other Asia
- Indian Rupee (INR) trades at fresh record low, bond yields rise
- Indonesian assets decline ahead of Thursday-Friday central bank meeting
North America
- US equity markets ended lower: Dow -0.7%, S&P500 -0.9%, Nasdaq -1.5%, Russell 2000 -1.7%
- S&P500 Technology -1.4%, Financials -1.3%, Consumer Discretionary -1.3%
- (US) DOE CRUDE: -9.9M V -3ME
- TSLA Panasonic Exec said to note situation related to Tesla Model 3 has improved which has led to ‘occasional’ battery shortages – financial press
- CMG Exec: pleased with underlying sales trends we are seeing as sales trends from Q1 have continued into Q2; We expect to close 55-65 restaurants; to close half within next 30 days, rest under next several quarters; sees $50-60M in charges to hit in Q2
- AMZN Announces new offering that helps entrepreneurs build their own companies delivering Amazon packages
Europe
- (DE) Germany Interior Minister Seehofer: ‘Very optimistic’ that officials can solve coalition dispute over migration
- (GR) Greece said to be willing to take asylum seekers under a deal with Merkel – FT
Levels as of 01:30ET
- Hang Seng +0.3%; Shanghai Composite -0.0%; Kospi -1.2%; Nikkei225 +0.0%; ASX 200 +0.3%
- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.2%
- EUR 1.1553-1.1573; JPY 109.97-110.35; AUD 0.7335-0.7362;NZD 0.6769-0.6811
- Aug Gold -0.2% at $1,253/oz; Aug Crude Oil -0.4% at $72.50/brl; Sept Copper 0.0% at $2.99/lb
