Markets Cautiously Optimistic On Positive US

Jul 23 19, 07:06 GMT

General Trend:

Markets cautiously optimistic on news that US trade negotiators could visit China next week for their first face to face meeting since the G20. Trump agreed to making a decision on Huawei
NZ$/USD fell 0.3% after RBNZ said that they were looking at unconventional policy strategies, but remain at a very early stage
China PBOC skips the use of reverse repos and uses both MLF and Targeted MLF (TMLF) instead
Trump and Congressional leaders reach a deal on debt ceiling that will increase spending in both non-defense and defense spending, deal will see debt limit extended for the remainder of Trump’s presidency (2-years), but be re-imposed in 2021
BOJ Gov Lee warns that if Japan situation worsens will have to consider a response, active fiscal policy is needed, possibly will cut 2019 GDP outlook again
South Korea keeping an eye on North Korea’s new submarine, which leader Kim was photographed inspecting

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat
(AU) Australia RBA Assistant Gov Kent: A$ may be even higher if it werent for RBA rate cut; Australia is a long way away from unconventional policy – Q&A
(NZ) Reserve Bank of New Zealand (RBNZ): Looking at unconventional policy strategies, unconventional policy work is at a “very early stage”
(AU) Australia RBA Assistant Gov Kent comments on Committed Liquidity Facility: Many banks overseas faced significant liquidity problems having not paid enough attention to their liquidity management in the lead up to the crisis
OZL.AU Reports Q2 production: Copper 28.5Kt, +5.1% y/y; Gold 27.1K oz, -3.7% y/y
BLK.AU To sell package of tenements and other key assets for the Lake Way Project to Salt Lake Potash for A$10.0M cash
(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 116.3 v 115.9 prior
(AU) Australia Foreign Exchange Committee Semi-Annual Turnover Report: Avg $119.1B/day in April

Japan

Nikkei 225 opened flat
7238.JP Looking at various options for operations, considering closing 1 domestic plant and 2 in the US, cutting 3.8K jobs – Japan press
(JP) Japan Fin Min Aso: Believe there is support for sales tax increase, election results showed more support than 3 years ago
(JP) Japan Cabinet Sec Suga: Former Top FX Official Asakawa has asked to be special advisor to cabinet
(JP) Japan Trade Min Seko: Japan to tell WTO its South Korean curbs don’t break the rules
(JP) Japan MoF sells ¥399.6B v ¥400B indicated in 0.50% 40-year JGBs, highest accepted yield 0.425% v 0.535% prior, bid to cover: 3.02x v 3.87x prior
(JP) Japan PM Abe: To take plenty of measures to handle the sales tax increase in Oct; biggest challenge is low birthrate and aging – Speaking after upper house elections saw his coalition retain control (yesterday)

Korea

Kospi opened +0.1%
(KR) Bank of Korea (BOK) Gov Lee: Could cut 2019 GDP outlook if trade dispute with Japan gets worse, will have to consider a response if conditions worsen – speaking to parliament
005490.KR Reports Q2 (KRW) Net 681B v 619Be; Op 1.1T v 1.1Te; Rev 16.3T v 16.3Te
(KR) US President Trump: There was “very positive” correspondence with North Korea recently; will meet for nuclear talks when N. Korea is ready – Yonhap
000270.KR Reports Q2 (KRW) Net 505.4B v 331.9B y/y; Op 533.6B v 352.6B y/y; Rev 14.5T v 14.1T y/y
(KR) South Korea issues rebuttal to Japan’s claim that South Korea has a lax system of control of goods that can be diverted for military purposes – Yonhap
(KR) South Korean low budget airlines have reduced routes to Japan citing slow demand – Korean Press
(KR) South Korea reports Russia military aircraft entered South Korea air space, fired warning shots at the plane – Korean press

China/Hong Kong

Hang Seng opened +0.1%; Shanghai Composite opened flat
(CN) US trade war negotiators said to likely to visit China next week for first face-to-face talk since G20 – financial press
(CN) China Ministry of Industry and Information Technology (MIIT): An arduous effort will be needed to reach 2019 industrial target of 5.5-6.0%, due to H2 economic uncertainty – financial press
(CN) CHINA PBOC CONDUCTS CNY297.7B V CNY267.4B PRIOR 1-YEAR TARGETED MEDIUM-TERM LENDING FACILITY (TMLF) AT 3.15% V 3.15% PRIOR (3RD USE OF TMLF); AND OFFERS CNY200B IN 1-YEAR MEDIUM TERM LENDING FACILITY (MLF) V CNY200B PRIOR AT 3.3% V 3.3% PRIOR; NET DRAINS CNY164.3B
(CN) China PBOC sets yuan reference rate: 6.8818 v 6.875 prior
(CN) China PBoC Open Market Operation (OMO): Skips v injects CNY50B in 7-day reverse repos prior; Net CNYB injected v CNY50B injected prior
HUAWEI.CN Denies press reports: Do not have any business presence in North Korea
(CN) China new Science and Technology Innovation Board, STAR, (similar to Nasdaq) falls on its second day of trade
(CN) China CIRC orders 20 property insurers to cease using certain products correct mistakes; bans 11 insurers from new property products for 3-6 months
(HK) Hong Kong Chief Exec Lam: Strongly condemns attacks in Yuen Long; protests around the China Liaison office a challenge to national sovereignty – press conference; govt to make attempt to arrest attackers

Other

(SG) Analysts note that depending on upcoming June inflation data Singapore Central Bank (MAS) may easy policy ahead of semi-annual meeting in October
(PH) Philippines Central Bank Chief Diokno: Further monetary easing depends on how strong growth is; BSP is prudent in calibrating monetary policy
(SG) Singapore Jun CPI M/M: -0.2% v -0.1%e; Y/Y: 0.6% v 0.8%e

North America

INTC Apple reportedly in late stage discussions to buy Intel smartphone modem chip assets for $1B – press
(US) Pres Trump: Debt ceiling deal has been reached – tweet; Trump, Pelosi and other congressional leaders agree to raise spending on both defense and non-defense programs over the next 2-years

Europe

(GR) New Greece conservative government won confidence vote related to economic policy – press
SAN.ES Reports Q2 Net €1.39B v €1.3Be, Rev €12.4B v €12.0B y/y
UBSG.CH Reports Q2 Net $1.39B v $1.38B y/y, Adj Pretax $1.79B v $1.82B y/y, Rev $7.53B v $7.64B y/y

Levels as of 01:20ET

Hang Seng +0.1%; Shanghai Composite -0.0%; Kospi +0.4%; Nikkei225 +1.1%; ASX 200 +0.5%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.0%, Dax +0.4%; FTSE100 +0.4%
EUR 1.1190-1.1211; JPY 107.83-108.19; AUD 0.7018-0.7037; NZD 0.6729-0.6761
Commodity Futures: Gold -0.7% at $1,417/oz; Crude Oil 0.0% at $56.21/brl; Copper +0.2% at $2.72/lb