HomeContributorsFundamental AnalysisSpeculation Continues On BOJ's Next Move

Speculation Continues On BOJ’s Next Move

General Trend:

  • Asian equity markets trade generally higher
  • Chinese equities rise amid government pledge to make fiscal policy more proactive; Shanghai Composite Property index rises over 5%
  • Alphabet rises over 3.5% post earnings
  • Mitsubishi Motors rises over 3%, may report Q1 earnings later today
  • Weaker than expected earnings weigh on South Korean shipping-related companies
  • Japan Manufacturing PMI hits 1.5 year low amid deterioration in export demand
  • Offshore Yuan (CNH) weakens, PBoC set the yuan at the weakest since July 2017
  • China 10-year bond yield rises for the 3rd straight session
  • Australia Q2 CPI data due on Wednesday’s session
  • US and European companies which may report results on Tuesday include 3M, AT&T, Biogen, Eli Lilly, Harley Davidson, Lockheed Martin, LVMH, Norsk Hydro, Peabody Energy, Peugeot, Randstad, Robert Half, Sherwin-Williams, Technicolor, Telecom Austria, UBS, UPM and Verizon.

Headlines/Economic Data

Japan

  • Nikkei 225 opened +0.7%
  • TOPIX Real Estate index +1.5%, Iron & Steel +1.3%, Marine Transportation +1.3%, Securities +0.8%, Electric Appliances +0.6%
  • (JP) Nikkei suggests politics could be a factor at the BoJ upcoming July policy decision. Suggests political considerations could pressure the central bank to take action at the July meeting, as a policy decision at the Sept meeting could influence the Liberal Democratic Party’s leadership elections.
  • 8306.JP Mitsubishi UFJ Morgan Stanley Securities in a series of fake bond transactions that gained ÂĄ1.58M in profits, now facing ÂĄ218M in fines – Nikkei
  • 8058.JP Regional Jet got no orders at Farnborough – Nikkei
  • (JP) Japan ruling Liberal Democratic Party (LDP) lawmaker Shigeru Ishiba: sales tax above 10% may be needed – Nikkei
  • (JP) JAPAN JUL PRELIM PMI MANUFACTURING: 51.6 V 53.0 PRIOR (1.5-yr low); New orders growing at weakest pace since Sept 2016
  • (JP) Japan MoF sells ÂĄ400B v ÂĄ400B indicated in 0.80% (prior 0.90%) 40-yr bonds, yield at highest price 0.8800%; bid to cover 3.30x v 3.92x prior
  • (JP) Those familiar with BOJ thinking expect BOJ to keep the same outline of its current policy at its next meeting despite complaints from banks – financial press
  • (JP) Japan June BoJ Core CPI Y/Y: 0.4% v 0.5% prior

Korea

  • Kospi opened +0.2%
  • (KR) According to economists South Korea President Moon’s expansionary fiscal policy will probably prove unsustainable in a couple of years due to a possible decline in tax revenue that might stem partly from reduced corporate profits – Korean press
  • (KR) South Korea’s Kospi has experienced the weakest H1 in 5-years, -5.7% – Korean press
  • POSCO, 005490.KR Reports Q2 (KRW) Net 581.8B v 815Be; Op 1.25T v 1.35Te; Rev 16.1T v 15.9Te; Raises FY18 outlook
  • 051910.KR To invest KRW2.8T to expand manufacturing facilities to raise the capacities of the Naphtha Cracking Center and high value metallocene polyolefin by 800Kt each at its Yeosu plant in South Jeolla Province
  • (KR) North Korea appears to have begun dismantling part of Sohae station, a key rocket launch site – press

China/Hong Kong

  • Hang Seng opened +0.1%, Shanghai Composite +0.1%
  • Hang Seng Materials index +5.6%, Property/Construction +2.9%, Industrial Goods +2.5%, Financials +2.1%
  • (CN) China State Council agreed that a more proactive fiscal policy will be pursued; will focus on introducing deeper tax and non-tax fee cuts, and more companies will be eligible for the preferential policies of the additional deduction of R&D spending in taxable income – Xinhua
  • (CN) China foreign ministry spokesman Shuang: China has no desire to boost its exports through competitive devaluation, sound economic fundamentals are providing support to the currency
  • (CN) China PBoC Open Market Operation (OMO): Skips OMO for the 3rd consecutive session; Drains net CNY70B
  • (CN) CHINA PBOC SETS YUAN REFERENCE RATE AT 6.7891 V 6.7593 PRIOR (weakest setting since July 11th, 2017)
  • (CN) China H1 State Owned Enterprises (SOE) Profits CNY1.72T, +21.1% y/y; Rev CNY27.8T, +10.2% y/y
  • (CN) China Ministry of Industry and Information Technology (MIIT): To appropriately help handle China/US trade dispute; to boost steady growth of industrial economy

Australia/New Zealand

  • ASX 200 opened +0.2%
  • ASX 200 Consumer Discretionary index +0.9%, Resources +0.8%, Financials +0.4%
  • (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 118.9 v 121.5 prior
  • (AU) Australia Foreign Exchange Committee April Turnover report: Total avg daily OTC FX turnover A$122.6B
  • IOF.AU Blackstone bid deemed ‘not fair but reasonable’ by independent expert KPMG – Australian
  • Looking ahead: In tomorrow’s session will receive Aussie Q2 CPI and June Trade Balance

North America

  • US equity markets ended mixed: Dow -0.1%, S&P500 +0.2%, Nasdaq +0.3%, Russell 2000 +0.1%
  • S&P500 Financials +1.3%; Utilities -0.7%
  • SPDR Gold Trust ETF daily holdings +0.6% at 802.55 metric tonnes
  • Whirlpool, [-8%], WHR Reports Q2 $3.20 v $3.63e, Rev $5.14B v $5.22Be

Europe

  • (UK) BOE’s Broadbent: unwinding QE may create disinflationary pressures itself; QE unwinding won’t start until rates are higher
  • (UK) White Paper on Brexit plan would give ministers more power to block foreign takeovers of domestic firms on a national security basis – UK press

Levels as of 01:30ET

  • Hang Seng +1.6%; Shanghai Composite +1.7%; Kospi +0.5%; Nikkei225 +0.5%; ASX 200 +0.6%
  • Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.2%
  • EUR 1.1675-1.1702; JPY 111.06-111.52; AUD 0.7366-0.7389;NZD 0.6771-0.6797
  • Aug Gold -0.5% at $1,219/oz; Sept Crude Oil -0.4% at $67.64/brl; Sept Copper +0.7% at $2.76/lb
Trade The News
Trade The Newshttp://www.tradethenews.com/
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Featured Analysis

Learn Forex Trading