General Trend:
- Asian equity markets trade generally lower
- Shanghai Property index extends decline amid speculation regarding higher mortgage rates
- Kobe Steel declines over 8% post earnings
- Nikkei weighted Fast Retailing may report monthly sales after the close
- Singapore bank DBS declines on weaker than expected profits
- China PBoC skipped its operation market operations (OMOs) for the 10th straight session
- Japan sold 10-yr JGBs at higher yield and lower bid to cover
- Japanese companies expected to report earnings today include Mitsubishi UFJ, Nippon Steel, DoCoMo, Suzuki, Yamada Denki, Asahi Group, Kakaku.com and Ibiden.
- Bank of England (BoE) rate decision due later today
Headlines/Economic Data
Japan
- Nikkei 225 opened -0.3%
- TOPIX Marine Transportation index -2%, Iron & Steel -1.8%, Information & Communication -1.6%, Real Estate -1%, Retail Trade -1%, Securities -0.9%
- Japanese automakers underperform
- (JP) For FY2018, the capital spending plans of companies in Japan hit 38-year high, according to survey by the Development Bank of Japan (DBJ) – Nikkei
- (JP) Japan Investors Net Buying of Foreign Bonds: +¥526.5B v -¥201.3B prior; Foreign Buying of Japan Stocks: -¥63.4B v +¥173.6B prior
- (JP) Japan July Monetary Base at end of period: ¥503.0T v ¥499.5Te; y/y: 7.0% v 7.4% prior
- (JP) Bank of Japan (BOJ) Deputy Gov Amamiya: Reiterates prices have continued to show relative weakness
- (JP) Japan Chief Cabinet Sec Suga: Japan is closely watching US/China trade tariff situation and impact
- (JP) Japan MoF sells ¥2.2T v ¥2.2T indicated in 0.1% (prior 0.1%) 10-yr JGB; avg yield 0.126% v 0.037% prior; bid to cover 4.17x v 4.37x prior
- Looking ahead: Tomorrow Toyota Motors reports Q1 results
Korea
- Kospi opened -0.1%
- (KR) South Korea Land Ministry: Closely watching housing market, will take steps if any overheating is seen
China/Hong Kong
- Hang Seng opened -0.6%, Shanghai Composite -0.3%
- Hang Seng Services index -4.1%, Industrial Goods -3.4%, Info Tech -3.3%, Financials -2%, Property/Construction -2%
- (CN) Follow Up: conference call was held on China trade without President Trump; call addressed extending comment period to Sept 5th (from Aug 30th); confirms considering implementing 25% tariffs on $200B of Chinese goods (prior 10%); no current talks with China, remain open to talks
- (CN) China mortgage rates expected to rise in H2 according to analysts – China Securities Journal
- (CN) China said to be planning to limit steel production in more cities over the winter – China News
- (CN) China PBOC: To continue to implement the prudent monetary policy in the latter half of 2018 to ensure economic and financial stability – Xinhua
- (CN) China PBoC Open Market Operation (OMO): Skips OMO for the 10th consecutive session; Net drains CNY30B v drains CNY20B prior
- (CN) China PBoC sets yuan reference rate at 6.7942 v 6.8293 prior
- (CN) China State Planner (NDRC): Consumption data does not fully reflect services spending
Australia/New Zealand
- ASX 200 opened -0.1%
- ASX 200 Resources index -1.8%, REIT -0.6% Telecom -0.5%, Energy -0.4%, Consumer Discretionary -0.4%, Financials -0.1%
- (AU) Australia ACCC issues gas inquiry interim report: Says the east coast of Australia needs additional gas supply in order to lower prices
- (AU) Australia sells A$500M v A$500M indicated in Oct 2018 notes, avg yield 1.9438%, bid to cover 4.8x
- (AU) AUSTRALIA JUN TRADE BALANCE (A$): 1.87B V 0.9BE; Exports m/m: +3% v +4% prior; Imports m/m: -1% v +3% prior
- NetComm Wireless, [+9%], NTC.AU Said to have attracted interest from overseas buyers – Australian
- (NZ) New Zealand sells NZ$100M in 2.5% Sept 2040 inflation indexed bonds; avg yield 1.9518%; bid to cover 2.45x
North America
- US equity markets ended mixed: Dow -0.3%, S&P500 -0.1%, Nasdaq +0.5%, Russell 2000 -0.1%
- S&P500 Energy -1.4%, Industrials -1.4%; Tech +0.9%
- TSLA Reports Q2 -$3.06 v -$2.76e, Rev $4.0B v $3.79Be; CEO: have no plans to raise equity; focused on paying off debts – earnings call comments (+9.2% after hours)
- IO Reports Q2 -$1.86 v -$0.88 y/y, Rev $24.7M v $46.0M y/y (-19% afterhours)
Europe
- (DE) German Lawmakers approve payment on last bailout installment of €15B for Greece
- (UK) UK Gove said to have discussed a backstop plan related to the Single Market – FT
Levels as of 01:30ET
- Hang Seng -2.7%; Shanghai Composite -3.1%; Kospi -1.6%; Nikkei225 -1.2%; ASX 200 -0.4%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.4%; FTSE100 -0.4%
- EUR 1.1646-1.1667; JPY 111.40-112.15; AUD 0.7379-0.7411;NZD 0.6774-0.6799
- Dec Gold -0.0% at $1,227/oz; Sept Crude Oil +0.1% at $67.72/brl; Sept Copper -0.7% at $2.72/lb
