RBA Gov Lowe Confirms Will Take More Action If Needed

Jul 25 19, 07:05 GMT

General Trend:

Markets remain cautious ahead of ECB meeting later today, earnings season has kicked into full swing around the world, Australia production continues to be mixed, early Japan earnings seem mostly positive, tomorrow we will get results from Nissan who affirmed speculation that Q1 would be in line with expectations of a ~90% y/y decline
Samsung announces the delayed launch of Galaxy Fold, will happen in September
South Korea Q2 GDP beat estimates
Oil prices rise as tensions in the Middle East linger and DoE reported a larger decline in crude stocks
RBA Gov Lowe gave a speech in Sydney, reiterating RBA is prepared to lower rates again if needed, noting a hike won’t come until CPI reaches target, A$ fell 0.2% on the comments; in Q&A clarified that today’s comments are not a shift in forward guidance
Hynix Q2 results came in weaker than expected, continues to be pessimistic on outlook, notes CAPEX will be significantly lower next year, will reduce DRAM capacity starting in Q4, notes some customers adjusting buying due to China, US trade conflict
North Korea fired 2 missiles, but regional leaders don’t seem too concerned

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
(AU) Reserve Bank of Australia (RBA) Gov Lowe: Is prepared to ease policy further if needed; unlikely to seek rate hike until CPI is within intended target range – ‘Inflation Targeting and Economic Welfare”
(AU) Reserve Bank of Australia (RBA) Gov Lowe: Today’s comments are not a shift to forward guidance, not certain if current policy will be enough to lift economy; Gap in strong employment and output growth remains a puzzle – Q&A
FMG.AU Reports Q4 Ore Mined: 57.6Mt v 49.8Mt y/y; Iron Ore Shipments 46.6Mt v 46.3Me
NCM.AU Reports Q4 Copper Production: 28.79Kt v 20.11Kt y/y; Gold Production: 661.41K oz v 634.95K oz y/y at AISC of $720/oz v $738 q/q
MQG.AU Gives Q1 Update: Op net profit broadly in line y/y, slightly lower q/q; Group capital surplus A$5.0B

Japan

Nikkei 225 opened flat
(JP) Japan confirms North Korea launched short range ballistic missiles, they did not reach Japan’s EEZ – Japan press
(JP) Bank of Japan (BOJ) said not to have consensus on additional easing measures at upcoming July meeting
(JP) Japan Jun PPI Services Y/Y: 0.7% v 0.8%e
(JP) Japan MoF sells ¥1.99T v ¥2.0T indicated in 0.10% 2-year JGBs, avg yield: -0.211% v -0.216% prior, bid to cover 4.71x v 4.39x prior
6857.JP Reports Q1 Net ¥12.1B v ¥13.9B y/y; Op ¥15.2B v ¥15.8B y/y; Rev ¥66.2B v ¥70.9B y/y (after the close yesterday)
7751.JP Reports H1 Net ¥65.83 v ¥134.78 y/y; Op ¥83.55 v ¥175.05 y/y; Rev ¥1.78T v ¥1.97T y/y; cuts guidance (yesterday after the close)
3938.JP Reports H1 Net -¥26.6B v +¥2.9B y/y, Op -¥21.8B v +¥10.3B y/y, Rev ¥110.8B v ¥99.4B y/y (yesterday after the close)

Korea

Kospi opened +0.2%
(KR) SOUTH KOREA Q2 PRELIMINARY GDP Q/Q: 1.1% V 0.9%E; Y/Y: 2.1% V 1.9%E
Hynix,000660.KR Reports Q2 (KRW) Net 535.5B v 584Be; Op 637.6B v 743.9Be; Rev 6.45T v 6.4Te; Clients delayed DRAM purchases due to trade tensions in Q2; To reduce DRAM production capacity starting in Q4
(NK) North Korea reportedly fires unidentified projectile from near Wonsan – South Korean press
005930.KR Completed upgrades to Galaxy Fold and will launch in Sept (prior launch was April)

China/Hong Kong

Hang Seng opened +0.2%; Shanghai Composite opened flat
(CN ) China Jun Swift Global Payments (CNY): 1.99% v 1.95% prior
(CN) China PBoC Open Market Operation (OMO): Skips for 3rd consecutive session; Net CNY100B drained v CNY100B drained prior
(CN) China PBOC sets yuan reference rate: 6.8737 v 6.8860 prior
(HK) Hong Kong expected to name Eddie Yue New HKMA chief, will replace Norman Chan – SCMP

Other

UMC Reports Q2 (NT$) 1.74B v 1.01Be, Rev 36.0B v 38.9B y/y
2354.TW Reportedly increasing hiring in Shenzhen with salaries +10% from last year, increasing speculation that Apple may increase H2 production numbers of iPhones – press
(PH) Philippine Central Bank member Tolentino: In no rush to cut rate, will assess data going forward

North America

TSLA Reports Q2 -$1.12 v -$0.54e, Rev $6.35B v $6.38Be; CEO: Sees Q3 Net around breakeven; Q4 to have a profit
FB Reports Q2 $1.99 adj v $1.90e, Rev $16.9B v $16.4Be
(US) President Trump considering an executive order that would cut prices on branded prescription drugs sold to Medicare and other Govt programs
(US) DOE CRUDE: -10.8M V -4ME; GASOLINE: -0.2M V -1.5ME; DISTILLATE: +0.6M V +0.5ME

Europe

Levels as of 01:20ET

Hang Seng +0.3%; Shanghai Composite +0.2%; Kospi -0.3%; Nikkei225 +0.3%; ASX 200 +0.5%
Equity Futures: S&P500 +0.1%; Nasdaq100 -0.2%, Dax +0.2%; FTSE100 +0.2%
EUR 1.1133-1.1145; JPY 108.08-108.23; AUD 0.6965-0.6985;NZD 0.6693-0.6708
Commodity Futures: Gold -0.1% at $1,422/oz; Crude Oil +0.3% at $56.07/brl; Copper -0.3% at $2.70/lb