General Trend:
- Chip-related firms trade generally lower in Japan as uncertainty remains regarding relations with South Korea
- Regional banks in Japan supported by business alliance speculation
- Financials outperform in Australia, miners lag
- Aussie consumer confidence hits 2-year low in June
- Brent Crude Futures rise in Asia amid US API data, storm threat in the Gulf of Mexico
- Some analysts talk deflation after China’s weaker than expected PPI data, data weighed down by oil and steel prices
- China PBoC said banking system liquidity at reasonably ample level (previously said ‘relatively high level’)
- Taiwan tech sector in focus: chipmaker Nanya expected to report quarterly earnings, Taiwan Semi expected to issue monthly/quarterly sales figures
- US Fed FOMC minutes due for release on Wed
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- NZO.NZ Board recommends NZ$0.62/shr cash offer from Singapore’s OG Oil & Gas for the 30% stake it doesn’t already own
- (AU) Australia July Westpac Consumer Confidence Index: 96.5 v 100.7 prior (2-year low); M/M: -4.1% v -0.6% prior
- DCN.AU Received strong response to strategic review process; Guides FY20 Gold Production 150-170K oz at AISC A$1,400-1,500/oz; updates on 8-yr life of mine plan
- (AU) Australia Council of Financial Regulators quarterly statement: housing credit growth has stabilized but there has been some tightening in credit supply and lending may be affected by declining collateral values
Japan
- Nikkei 225 opened -0.3%
- (JP) Japan Center for Economic Research (JCER) quarterly survey on Asian economy: Outlook for Asian economies revised downward due to negative influence of US/China trade war
- (JP) Japan Jun PPI (CGPI) M/M: -0.5% v -0.1%e Y/Y: -0.1% v 0.4%e (first y/y decline since early 2017)
Korea
- Kospi opened +0.5%
- (KR) South Korea President Moon: Preparing counter measures to Japan export curbs; Will reflect impact of export curbs in extra budget and form emergency response system on Japan export curbs; hope Japan will respond and doesn’t come to a dead end – speaking after meeting with domestic firms
- (KR) South Korea and Malaysia to hold free trade agreement talks this week – Yonhap
- 005930.KR Samsung and SK Hynix said to cut NAND output as early as Jul – Korean press
China/Hong Kong
- Hang Seng opened +0.5%; Shanghai Composite opened +0.2%
- (CN) CHINA JUN CPI M/M: -0.1% V +0.1% PRIOR; Y/Y: 2.7% V 2.7%E
- (CN) China Interbank trading platform has signaled limits for interbank rates
- (CN) China has asked some banks to limit loans for property – Chinese Securities Journal
- (CN) China Vice Premier Liu He confirms spoke with US’s Lighthizer and Mnuchin on the phone
- (CN) China Foreign Ministry spokesperson Geng Shuang: calls on U.S. to withdraw arms sales to Taiwan; lodged complaints with U.S.
- (CN) China PBoC Open Market Operation (OMO): Skips for the 13th consecutive; Net drain CNY20B v nil prior; Banking system liquidity at reasonably ample level (prior relatively high level)
- (CN) China PBOC sets yuan reference rate: 6.8856 v 6.8853 prior
- (CN) China President Xi did not make any specific commitment to large scale US agricultural purchases during his meeting with US President Trump during G20 – SCMP
Other
- (TH) Thailand is prepared with measures to deal with short term inflows, will impose measures on capital flows when appropriate – financial press
North America
- (US) Fed’s Bostic (dove, non-voter): Fed is debating the merits and risks of running a hot labor market; there are risks to the labor market becoming too tight
- (US) Weekly API Oil Inventories: Crude: -8.1M v -5.0M prior
- (CN) White House Adviser Kudlow: China has not started buying more US agricultural goods yet; market shows Fed should take back last years rate cut
- (US) White House adviser Kudlow: US and China officials held constructive phone conversations today, US-China call this week will be followed by an in-person meeting
- (MX) Mexico incoming Fin Min Herrera Gutierre: Fiscal responsibly and Mexico Central Bank autonomy still hold; 1% primary surplus still the goal Europe-
Europe
- (EU) Belgium’s Charles Michel named incoming head of European Council; German Defense Minister Ursula von der Leyen waiting to be approved next European Commission president; effective Dec 1st
Levels as of 1:20 ET
- Nikkei 225, flat, ASX 200 +0.3%, Hang Seng +0.2%; Shanghai Composite -0.1%; Kospi +0.6%
- Equity Futures: S&P500 flat; Nasdaq100 flat, Dax -0.1%; FTSE100 +0.1%
- EUR 1.1211-1.1201 ; JPY 108.99-108.82 ; AUD 0.6932-0.6918 ;NZD 0.6610-0.6566
- Gold -0.4% at $1,394/oz; Crude Oil +1.4% at $58.61/brl; Copper +0.3% at $2.635/lb
