General Trend:
- Asian equity markets trade generally higher
- Shanghai Composite moves between gains and losses in early trade
- HSBC Reports H1 Net $8.4B v $8.0B y/y; adj Pretax $12.1B v $12.4B y/y; Adj Rev $27.5B v $27.0B y/y; will pay the DoJ a civil money penalty of $765M
- Australia’s Amcor is speculated to bid for Bemis Co.
- Rusal rises over 2% after Q2 results
- USD/CNY will not break the 7.00 level, according to a PBoC Adviser
- New Zealand’s Treasury sees rising risks to GDP forecasts; RBNZ expected to meet on Thursday
- Softbank is expected to report quarterly earnings later today
- White House is expected to issue details on new Iran sanctions later on Monday
Headlines/Economic Data
Japan
- Nikkei 225 opened +0.1%
- TOPIX Iron & Steel index +1.4%, Information & Communications +1%, Retail trade +0.5%
- Megabanks track declines in JGB yields
- Yamato Holdings, 9064.JP Japan officials to inspect offices over allegations of overcharging – Japan press
- Subaru, 7270.JP Reports Q1 Net ¥45.5B v ¥82.3B y/y; Op ¥57.6B v ¥119.3B y/y; Rev ¥709.2B v ¥814.0B y/y; Global vehicle sales 238K units, -12.3% y/y
- (JP) Japan Internal Affairs Min Noda: Do not think BOJ needs inflation target
Korea
- Kospi opened flat
- (KR) South Korea Ministry of Economy and Finance and Ministry of Interior and Safety sees tax burden at >20% of GDP for the 1st time – Korean press
- (KR) Bank of Korea (BOK) sells KRW500B in 6-month Monetary Stabilization Bonds (MSBs) at 1.74%
- (KR) South Korea Finance Ministry sells KRW400B in 5-yr pre-issuance govt bonds at 2.37%
- KEPCO, 015760.KR Subsidiary Korea South-East Power is being investigated by the Korea Customs Service on charges of buying 9.7Kt of North Korean coal in Nov of 2017 and March of this year – press
China/Hong Kong
- Hang Seng opened +0.8%, Shanghai Composite -0.1%
- Hang Seng Services index -0.9%
- (HK) Some property developers are leasing property projects to associates in order to avoid the vacancy tax – South China Morning Post
- (CN) Friday’s move by the China PBoC to raise the reserve requirement on foreign currency forwards was seen as an attempt by the central bank to take aim at speculators betting against the yuan currency (CNY) – South China Morning Post
- (CN) Former FX Official: PBoC maximum level of tolerance for the yuan may be the 7.0 handle against the dollar – Economic Observer
- (HK) Hong Kong banks undergoing stress tests as trade war pressures rise – HK press
- (CN) China State Media: US escalates trade friction with China and turns international trade into a zero sum game; Governing a country is not like doing business
- (CN) China PBoC Open Market Operation (OMO): Skips OMO for the 12th straight session
- USD/CNY (CN) CHINA PBOC SETS YUAN REFERENCE RATE AT 6.8513 v 6.8322 PRIOR (weakest fix since May 2017)
- Rusal, 486.HK Reports Q2 adj Net $218M v $202M y/y; adj EBITDA $552M v $510M y/y; Rev $2.25B v $2.47B y/y
- (CN) China may lower soybean imports by over 10M tons (timing uncertain) – Xinhua
- (HK) Some banks in Hong Kong may raise mortgage rates for the first time in 12 years amid higher funding costs – HK Press
- (US) Group of US Senators send letter to Mnuchin worried that China is using their financing of international infrastructure projects under “Belt and Road Initiative” that will leave countries’ indebted and needing bailouts
- (CN) CHINA COMMERCE MINISTRY (MOFCOM) RELEASES PROPOSED RETALIATION TO US TARIFF THREAT; to levy differentiated tariffs (import tax) on ~$60B in US goods (Friday after the close)
Australia/New Zealand
- ASX 200 opened +0.2%
- ASX 200 Resources index +1.2%, REIT +0.9%, Financials +0.6%, Telecom +0.7%, Energy +0.5%; Consumer Discretionary -0.5%
- (AU) China threat to implement 25% tariffs on LNG from US may give Australia LNG a boost – AFR
- Seek, SEK.AU Guides FY18 top ended of prior guided ex-items; To record A$178M charge in FY18
- (NZ) New Zealand Jul ANZ Commodity Price m/m: -3.2% v -0.9% prior
- (AU) Australia Jul ANZ Job Advertisements m/m: +1.5% v -1.7% prior
- Anteo Diagnostics, [+35%], ADO.AU Announces materials transfer agreement with a global manufacturer of battery materials in Asia
- FlexiGroup, [-16%], FXL.AU CEO Symon Brewis-Weston has resigned, to be replaced by Rebecca James as of Oct 15th; Affirms FY18 profit guidance
- (NZ) New Zealand Treasury: Risks to GDP growth forecasts are rising; Cites factors including housing slowdown, business confidence and trade
- (NZ) New Zealand PM Ardern: Aware that businesses want to hear more about policy
Other Asia
- TSMC, [-1%], 2330.TW Computer virus incident on Aug 3rd will impact Q3 revenues by 3% and gross margins by 1% due to costs and shipment delays
- (IN) India to defer retaliatory tariffs on 29 US products – India press
North America
- (CA) Saudi Arabia said to have frozen all trade investment with Canada – Press
- (CA) President Trump said to be reserving the right to impose tariffs on vehicles made in Canada – US press
Europe
- (UK) Chancellor of the Exchequer Hammond (Fin Min) claims France is trying to stall post-Brexit access to EU – FT
- (UK) Trade Minister Liam Fox (pro-Brexit member): Chances of leaving EU with no deal now seen at 60/40 – press
- (RU) Russia has told OPEC it will increase oil production by 170K bpd to help Trump Iran sanctions; UAE has said it will boost by 160K bpd – press
- (DE) ECB’s Lautenschlaeger (Germany, SSM member): In favor of rate normalization, worried about banking deregulation – German press
- (UK) Treasury said to have asked for help on Brexit action plan – press
Levels as of 01:30ET
- Hang Seng +0.4%; Shanghai Composite -0.9%; Kospi -0.1%; Nikkei225 -0.1%; ASX 200 +0.5%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 +0.0%
- EUR 1.1555-1.1667; JPY 111.16-111.37; AUD 0.7386-0.7405; NZD 0.6735-0.6755
- Dec Gold 0.0% at $1,223/oz; Sept Crude Oil +0.3% at $68.70/brl; Sept Copper -0.2% at $2.75/lb
