RBA Leaves Rates On Hold, Sees CPI A Bit Lower

Aug 07 18, 06:57 GMT

General Trend:

Asian equity markets trade mixed
Chinese equities move higher in early trading
Shanghai Composite Property index rises over 2.5%
Large Nikkei component Softbank rises over 6% post earnings
China Tower confirmed that HK IPO to price at the lower end of the expected range
Japan wage data accelerates in June
RBA sees Q3 CPI a little lower than expected on one-off factors
ASX remains under pressure from mining names
Expected earnings report from BHP in focus
China July FX reserves data may be released later today, trade balance seen later during the week

Headlines/Economic Data

Japan

Nikkei 225 opened flat
TOPIX Info & Communications index +2.1%, Iron & Steel +1.1%, Marine Transportation +0.6%
(JP) Japan FSA said to have started on-site inspections of certain regional banks – Japanese Press
(JP) Japan Jun Household Spending m/m: 2.9% v 1.7%e; y/y: -1.2% v -1.4%e
(JP) Japan Jul Labor Cash Earnings y/y: 3.6% v 1.7%e; Real Cash Earnings y/y: 2.8% v 0.9%e (fastest rise since Jan 1997)
(JP) Japan BoJ board said to have considered raising rates before tweaking policy – financial press
(JP) Capital Economics says the rise in Japan’s June wage data was mostly due to larger contribution from bonus payments which could more reflect strong corporate profits as opposed to tightness in the labor market – US financial press
(JP) Japan MoF sells ¥399.6B v ¥400B indicated in 10-yr 0.1% inflation-indexed bonds; highest yield -0.309%; bid to cover 3.12x v 4.02x prior

Korea

Kospi opened +0.2%
005930.KR Deputy PM and Fin Min Kim calls on company to make more effort in improving governance and discarding unfair trade, while working for job creation and innovative growth; Samsung asks for more deregulation in bio sector and holds off on investment plan announcement – Korean press
(KR) North Korea thinks there is a “strong possibility” of a second summit with President Trump and Kim Jong Un – press
(KR) South Korea Govt to ease progressive charge in electricity bills, to temporarily ease power tariff in July and August – Korean press

China/Hong Kong

Hang Seng opened +0.3%, Shanghai Composite +0.2%
Hang Seng Energy index +2.6%, Property/Construction +2.6%, Materials +1.5%, Consumer Goods +1.4%, Industrials +1.3%, Services +0.9%, Financials +0.7%,
China Tower, 788.HK Prices 43.1B shares at HK$1.26/shr v HK$1.26-1.58/shr indicated; 1.36x oversubscribed
(CN) China to ‘soon’ adopt policies to increase investment and credit – Chinese Press
(CN) China 2018 railway investment seen > CNY800B – Chinese Press
(CN) China PBoC Open Market Operation (OMO): Skips OMO for the 13th straight session
(CN) CHINA PBOC SETS YUAN REFERENCE RATE AT 6.8431 V 6.8513 PRIOR

Australia/New Zealand

ASX 200 opened -0.1%
ASX 200 Telecom index -1.4%, Consumer Discretionary -1.1%, Resources -0.5%, Financials -0.3%; Energy +0.7%
(NZ) New Zealand Shadow Board: Conditions do not warrant change in RBNZ rate
(AU) Australia Jul AiG Performance of Construction Index: 52.0 v 50.6 prior
(AU) Australia Treasurer Morrison: Will enforce additional changes to support ASIC, to receive additional A$70M in funding
(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 118.9 v 119.8 prior
Amcor, [-4%], BMS To be acquired by Amcor for $57.75/shr in all-stock deal valued at $6.8B; combined company to list on NYSE, ASX
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED

Other Asia

North America

US equity markets ended higher: Dow +0.2%, S&P500 +0.4%, Nasdaq +0.6%, Russell 2000 +0.7%
S&P500 Telecom +1%
SPDR Gold Trust ETF daily holdings -0.8% at 788.7 metric tonnes

Europe

(UK) Jul BRC Sales LFL y/y: 0.5% v 1.5%e
(TR) Delegation of officials from Turkey said to plan to go to the US in 2 days; Turkey and the US said to reach pre-agreement on certain issues including sanctions – CNN

Levels as of 01:30ET

Hang Seng +0.8%; Shanghai Composite +1.3%; Kospi +0.3%; Nikkei225 +0.6%; ASX 200 -0.4%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 +0.2%
EUR 1.1551-1.1564; JPY 111.23-111.42; AUD 0.7382-0.7400;NZD 0.6725-0.6735
Dec Gold +0.0% at $1,218/oz; Sept Crude Oil +0.0% at $69.03/brl; Sept Copper +0.4% at $2.74/lb