General Trend:
- US official seemingly plays down expectations for Trump/Xi G20 meeting
- Financials continue to weigh on Shanghai Composite
- Asian chipmakers rise, Micron gains in afterhours trading following its earnings/outlook
- China battery manufacturer CATL plans to raise investments in European production base
- RBNZ left rates unchanged (as expected), said lower cash rate may be needed over time, did not express concerns about currency
- NZD rises and falls after RBNZ decision, little reaction seen in bond market
- Probability of 50bps July US Fed rate cut declines after Fed comments
- USD/JPY rises with US bond yields
- Thai Baht (THB) weakens, Deputy PM supports 2019 rate cut
- US gasoline futures rise over 5% on possible closure of Philadelphia Energy Solutions refinery
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.50%; AS EXPECTED; MEMBERS DISCUSSED A RATE CUT AT THIS MEETING
- (NZ) IMF: New Zealand Dollar is not immediate concern, still a bit above long-term average
- BNO.AU Announced the top line results of the exploratory trial of BNC210 for the treatment of agitation in elderly patients in a hospital setting
- MOY.AU Announces first gold discovered from sulphide ore at Nullagine; Commissioning of Stage 1 sulphide plant produces first gold
- (NZ) Reserve Bank of New Zealand (RBNZ) Dep Gov Bascand RBNZ is renewing approach to financial stability
Japan
- Nikkei 225 opened -0.6%
- 723.JP CEO Bunsei Kure to step down (3 months after reappointing him), CFO Hidetoshi Shibata to be named as the new CEO, effective end of June
- 5938.JP Shareholders bring back ousted CEO Kinya Seto, re-naming him CEO; Seto comments he is targeting to return to company to profit this FY19/20, main issue is high fixed costs – AGM
- (JP) According to a joint study between Japan Center for Economic Research and Nikkei the USD/JPY at 107 is right around its equilibrium exchange rate, based on most recent economic data, 5 other regional Asian currencies are undervalued – Nikkei
- 8233.JP To exit China and close its Shanghai store by as early as 2020
- 3659.JP Founder stops process related to sale of stake – Korean press
- (JP) Japan Govt announced plans to hold Upper House election on July 21st
Korea
- Kospi opened slightly lower
- (KR) South Korea Fin Min Hong: To provide KRW70T over the next 5 years to support its services sector, will spend 70% of extra budget in Q3 if approved – Local Press
China/Hong Kong
- Hang Seng opened -0.5%; Shanghai Composite opened -0.6%
- (US) Senior Trump Administration official: no broad trade deal is expected to be made at the G20 meeting between Trump and Xi; US is not willing to come to the Trump-Xi meeting with concessions on trade; It’s possible that US and China may agree on no new tariffs as a goodwill gesture, but not clear if that will happen
- (CN) China Q2 Beige Book notes domestic economy shows modest improvement, manufacturing and retail outperformed; Risks ahead look more serious
- (CA) China Embassy in Canada confirms China has halted imports of Canadian meat after finding pork with residue of feed additive Ractopamine
- (CN) China PBoC Open Market Operation (OMO): Skips for the 3rd consecutive session
- (CN) China PBOC sets yuan reference rate: 6.8701 v 6.8580 prior
- (CN) CNOOC Energy Tech IPO opens for trade at CNY2.45 v CNY2.04/shr pricing, rises 44% to daily limit
- (CN) China PBOC sells CNY30B in 1-month and 6-month bills in Hong Kong
Other
- (JP) G20 draft communique: Calls for promotion of free trade as a means for strong global economic growth; calls for need to create positive economic cycle of growth and distribution (will not explicitly oppose protectionism due to opposition from US) – Japan press
North America
- (US) Philadelphia Energy Solutions expected to close oil refinery after recent fire (largest refinery on east coast) – press
- (US) Weekly API Oil Inventories: Crude: -7.6M v -0.8M prior
- (US) Fed Chair Powell: Monetary policy shouldn’t overreact to short-term swings in sentiment; doing so would risk adding even more uncertainty to the outlook
- (US) Fed’s Bullard (dove, voter, dissenter): a 50bps cut in July would be overdone; 50bps cut is not called for right now
- (US) Fed’s Bullard (dove, voter, dissenter): Think 2 rate cuts before the end of the year would ensure a soft landing, move policy from slightly restrictive to slightly accomodative; if Fed does cut rates in July do not feel a need to also end reduction in the balance sheet since that is already going to end in Sept; Was approached by Trump administration about a possible seat on Fed board, but said was happy in current job
- (US) Fed’s Barkin (hawk, non-voter): Fed policy stance is modestly accommodative; doesn’t know whether rates should be cut this year
- MU Guides Q4 $0.45 +/-$0.07 v $0.72e, Adj Rev $4.5B +/-$0.2B v $4.70Be – earnings call
- (US) Special Counsel Mueller to testify before House Committee on Intelligence and Judiciary July 17th
- TSLA CEO Musk reiterates on track to set all-time delivery record, has enough vehicle orders to set the record – US financial press
Europe
- (UK) New UK PM to be announced on Jul 23 – press
- (EU) Reportedly Germany Chancellor Merkel says she hopes EU Parliament selects candidates by midweek; calls for an EU Commission solution by June 30th – closed-door comments to lawmakers
Levels as of 1:20 ET
- Nikkei 225, -0.6%, ASX 200 -0.1%, Hang Seng +0.1%; Shanghai Composite -0.2%; Kospi -0.1%
- Equity Futures: S&P500 flat; Nasdaq100 flat, Dax flat; FTSE100 -0.3%
- EUR 1.1373-1.1353 ; JPY 107.50-107.09 ; AUD 0.6971-0.6950 ;NZD 0.6663-0.6594
- Gold -0.6% at $1,410/oz; Crude Oil +1.8% at $58.88/brl; Copper -0.1% at $2.728/lb
