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US Payrolls Report Due Later On Friday

General Trend:

  • Asian equities trade higher as first round of US tariffs take effect
  • Shanghai reverses losses
  • Samsung Electronics declines as Q2 prelim results missed ests
  • Singapore equities underperform on property curbs
  • On Thursday, US President Trump confirmed that the China tariffs would go ahead after midnight tonight (July 6th) and another $16B in tariffs are coming in two weeks (press)
  • China PBOC Adviser plays down impact of first round of US sanctions on domestic growth
  • Japan Household Spending declines for 4th straight month, raises concerns about whether Q1 slowdown was temporary
  • Japan Real Wages rise at fastest pace since July 2016
  • US June labor data due for release later today

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened +0.1%
  • ASX 200 Resources index +1.2%, Energy +1%, Financials +0.8%, Telecom +0.8%
  • (AU) Australia JUN AIG Performance of Construction Index: 50.6 v 54.0 prior (17-month low)
  • (AU) Australia to sell May 2041 bonds through syndication in week of July 16th
  • (NZ) Reserve Bank of New Zealand (RBNZ) publishes preferences on bank capital requirements

China/Hong Kong

  • Shanghai Composite opened -0.1%, Hang Seng +0.3%
  • Hang Seng Consumer Goods index +1.2%, Services +1.2%, Energy +1%, Industrials +0.9%, Telecom +0.9%, Info Tech +0.6% Property/Construction +0.7%, Financials +0.5%
  • HNA Group elects co-founder Chen Feng as Chairman, to replace Wang Jian (co-founder) who passed away earlier this week
  • (CN) China Commerce Ministry (MOFCOM): Reiterates has to fight back, forced to retaliate on tariffs; will continue evaluating impact of US tariffs
  • (CN) China Central Bank (PBOC) Adviser Ma Jun: Reiterates impact of trade war with US on China’s economy is ‘limited’; US’ planned tariffs on $50B worth of goods to slow domestic GDP growth by 0.2 pct points – Xinhua
  • (US) On Thursday, US President Trump said tariffs could ultimately be applied to $500B worth of goods from China – financial press
  • (CN) China head of the National Bureau of Statistics (NBS) Ning Jizhe said the country is capable of maintaining steady growth – Xinhua
  • (CN) China PBoC set yuan reference rate at 6.6336 v 6.6180 prior
  • (CN For the week, the PBoC drained a net of CNY500B in OMOs v CNY370B net drain w/w
  • (CN) China said to weigh further cuts in electric car subsidies – press

Japan

  • Nikkei 225 opened +0.5%
  • TOPIX Iron & Steel index +1.7%, Electric Appliances +1.2%, Marine Transportation +1.1%, Securities +0.9%
  • Eisai [4523.JP]: Rises over 19% after presenting Phase II data from Alzheimer’s study
  • Taiyo Nippon [4091.JP]: Advances over 13% on acquisition of assets from Praxair
  • (JP) Japan May Household Spending Y/Y: -3.9% v -1.5%e (largest drop since Aug 2016, 2nd straight decline)
  • (JP) Japan May Labor Cash Earnings Y/Y: 2.1% v 0.9%e (fastest pace since June 2003); Real Cash Earnings Y/Y: 1.3% v 0.0%e (largest gain since July 2016)
  • (JP) US and Japan officials may discuss auto tariffs in meetings in late July – Nikkei
  • (JP) Japan confirms to forecast FY2019 real GDP growth of 1.5%
  • (JP) Japan JUN Official Reserve Assets: $1.26T v $1.25T prior

Korea

  • Kospi opened +0.2%
  • (KR) South Korea Ministry proposes to raise taxes on higher priced homes
  • (KR) South Korea Trade Ministry: Sees ‘limited’ impact on exports form US and China tariffs; sees risk to exports if global trade conflict worsens

Other

  • (SG) Singapore to release Q2 GDP data on July 13th

North America

  • US equity markets ended higher: Dow +0.8%, S&P500 +0.9%, Nasdaq +1.1%, Russell 2000 +1.2%
  • S&P500 Telecom +1.5%, Technology +1.4%
  • (US) US-based equity funds had outflows of ~$8.3B in the week ended July 4th – Lipper
  • (US) FOMC MINUTES FROM JUN 13TH MEETING: BROAD SUPPORT FOR GRADUAL RATE HIKES AMID ‘VERY STRONG’ ECONOMY; MANY SAW DOWNSIDE RISKS TO US GROWTH AND INFLATION ASSOCIATED WITH EVENTS IN EUROPE AND EMERGING MARKETS
  • (US) Weekly Fed Balance Sheet Total Assets for week ending July 4th: $4.35T, -$12.6B w/w, -$165.9B y/y; Reserve Bank Credit: $4.26T, -$12.6B w/w, -$167.0B y/y
  • (US) DOE CRUDE: +1.3M V -4ME

Europe

  • Thyssenkrupp [TKA.DE]: CEO Hiesinger submits resignation request, asks that the supervisory board end his CEO mandate – press

Levels as of 01:30ET

  • Nikkei 225, +1.3%, ASX 200 +0.8%, Hang Seng +0.8%; Shanghai Composite +0.7%; Kospi +0.3%
  • Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.4%; FTSE100 +0.2%
  • EUR 1.1680-1.1698 ; JPY 110.52-110.79; AUD 0.7376-0.7402 ;NZD 0.6781-0.6805
  • Aug Gold -0.2% at $1,256/oz; Aug Crude Oil +0.1% at $73.04/brl; Jul Copper -1.2% at $2.798 /lb
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