China To Host US For Next Round Of Trade Talks

Jul 26 19, 06:18 GMT

General Trend:

Asian markets opened slightly lower before continuing to decline, following mixed US earnings
North Korea said missile firing was a warning to South Korea “warmongers” to stop importing weapons and conducting joint military drills
ECB left rates unchanged and tilted its forward guidance towards an easing. Staff looking at options for tiering and potential bond buying program, some sort of QE with additional stimulus expected to be announced at the Sept meeting
Softbank raises $108B new Vision fund that will be targeted at AI
Markets will now await BOJ and Fed rate decisions next week. Some BOJ officials said to doubt the benefit of stronger guidance
US DOJ confirms it will make an announcement on significant merger enforcement action tomorrow (Sprint, T-Mobile deal?)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
MIN.AU Reports Q4 Total Iron Ore Production: 2.53M WMT v 3.06M WMT y/y; Spodumene Production 90Mt v 109Mt y/y
GBT.AU Comments on A$4.00/shr FNZ takeover offer, unable to accept
(AU) Australia Competition and Consumer Commission’s (ACCC) releases final report on digital platforms inquiry: Recommends unfair contract terms be illegal; – Imbalance of power between media and Google and Facebook; Suggests merger laws be updated; Govt to respond by the end of the year

Japan

Nikkei 225 opened -0.3%
(JP) Japan some BOJ officials express doubt over the potency of stronger guidance – Financial Press
(JP) Japan will decide on South Korea white list on Aug 2nd at earliest; Follow Up: Japan Cabinet Chief Suga: Schedule for decision on South Korea whitelist has not been decided
7201.JP Reports Q1 Net ¥6.34B v ¥115.83B y/y, Op ¥1.51B v ¥37.2Be, Rev ¥2.37T v ¥2.72T y/y; to cut headcount by ~12.5K jobs
(JP) Japan July Tokyo CPI Y/Y: 0.9% v 1.0%e; CPI Ex-Fresh Food Y/Y: 0.9% v 0.8%e
9984.JP New Visions Fund 2 raises $108B, to invest $38B into the second Vision Fund
(JP) Japan Econ Min Motegi said to meet with USTR Lighthizer in Washington on Aug 1 – US Financial Press

Korea

Kospi opened -0.5%
(KR) North Korea Leader Kim inspected personally the new tactical guided weapon firing yesterday – North Korean state press
(KR) North Korea leader Kim: Missile firing was a warning to South Korea’s “warmongers”
(KR) US State Dept: aware of reports that North Korea fired projectiles; urges no more provocations and still seeks diplomatic engagement
(KR) North Korea 2018 GDP y/y: -4.1% v -3.5% in 2017 – Bank of Korea (BOK)

China/Hong Kong

Hang Seng opened -0.7%; Shanghai Composite opened -0.3%
(CN) China Ministry of Commerce (MOFCOM): China to host the US for 12th round of trade consultations July 30-31 in Shanghai- Xinhua
(CN) Yuan volatility has significantly decreased since mid-June as China households and companies have started selling when RMB is low on the assumption Beijing will step in to halt depreciation – US Financial Press
2282.HK Reports H1 (HKD) Rev 11.3B v 9.07B y/y
486.HK Reports Q2 prelim Aluminum Production: 938Kt, +1% q/q; Aluminum Sales 1.08Kt, +20.8% q/q
(CN) China PBOC sets yuan reference rate: 6.8796 v 6.8737 prior
(CN) China PBoC Open Market Operation (OMO): Skips for 4th consecutive session; Net CNY100B drained v CNY100B drained prior
(CN) China Automobile Association (CAAM) cuts 2019 outlook of auto sales to 26.68, -5% y/y due to slower H1 sales – Chinese press
(CN) China Ministry of Commerce (MOFCOM) responds to US open letter on China: Provoking confrontation between China and the United States does not enjoy U.S. mainstream public support, while promoting win-win cooperation between the two countries conforms to the wishes of the people

Other

(SG) Singapore Semiconductor Industry Assoc Exec Director: Chipmakers producing at ~60% capacity v 80% seasonal average; cites US-China trade war slowdown; some firms are freezing headcounts but currently no talk of layoffs

North America

(US) INITIAL JOBLESS CLAIMS: 206K V 218KE; CONTINUING CLAIMS: 1.68M V 1.69ME
(US) House of Representatives passes the 2-year budget deal that suspends the debt ceiling (as expected)
(US) DoJ Assistant Attorney General (AG) Delrahim to announce a significant merger enforcement action July 26th 11:00ET
HSY Confirms it will be raising prices for wholesalers by ~10%, retailers will have to decided if they will pass cost increase along to customers
SBUX Reports Q3 $0.78 v $0.72e, Rev $6.82B v $6.68Be
MAT Reports Q2 -$0.25 v -$0.35e, Rev $860.1M v $821Me
GOOGL Reports Q2 $14.21 v $11.50e, Rev $31.7B (ex $7.23B of TAC) v $30.9Be
INTC Apple to acquire Majority of Intel’s smartphone modem business for $1B, as speculated

Europe

(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; maintains guidance
(EU) ECB STAFF EXAMINING OPTIONS FOR TIERING AND POTENTIAL QE BOND BUYING PROGRAM (QE)
RNO.FR Reports H1 Net €1.05B v €2.04B y/y, Op €1.52B v €1.73B y/y, Rev €28.1B v €28.5Be; Cuts FY19 Rev

Levels as of 01:20ET

Hang Seng -0.6%; Shanghai Composite -0.2%; Kospi -0.6%; Nikkei225 -0.6%; ASX 200 -0.3%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.4%, Dax +0.4%; FTSE100 -0.1%
EUR 1.1143-1.1151; JPY 108.56-108.73; AUD 0.6940-0.6956; NZD 0.6651-0.6670
Commodity Futures: Gold +0.1% at $1,415/oz; Crude Oil +0.4% at $56.23/brl; Copper -0.1% at $2.70/lb