Nikkei Later Pares Declines As Financials Gain After Earnings

Aug 01 19, 06:23 GMT

General Trend:

Hang Seng underperform amid protests concerns, unexpected Q2 GDP contraction
Standard Chartered H1 profits beat ests
Macau casino revenues decline in July amid protests
Financials rise in Japan; Nomura, Daiwa Securities, MUFJ and Mizuho all rise following their respective earnings reports
Property index drops in Shanghai on reported PBoC warning
China Caixin Manufacturing PMI beat ests, remained in contraction in July
US and China agreed to hold more trade talks in Sept
US companies continue to apply for licenses to resume sales to Huawei (US financial media)
Bank of Korea (BOK) Chief said may consider more easing if downside risks grow (local press)
South Korea exports decline for 8th straight month in July, chip exports -28.1% y/y; Imports decline amid dispute with Japan
Australian export prices continued to be driven higher by ore prices in Q2
CoreLogic said Aussie July house price data pointed to broader stabilization
BoJ official Amamiya commented on topics including overseas risks and pre-emptive action
Gold declines as USD strengthens after Fed
BoE rate decision seen later today
US companies expected to report during the NY morning include Cigna, GM, Kellogg, Oshkosh, Verizon, Yum
Toyota Motor is due to report earnings on Friday
Japan may decide on whether to remove South Korea from Japan’s trade ‘white list’ by as early as Friday (financial press)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.2%
(AU) Australia July AIG Performance of Manufacturing Index: 51.3 v 49.4 prior
(AU) Australia July CoreLogic House Price Index m/m: +0.1% v -0.1% prior (first rise in 22 months)
NUF.AU Cuts FY19 underlying EBITDA A$420M (prior A$440-470M); Announces A$97.5M placement of preferred securities
QAN.AU Australia competition regulator ACCC: Qantas’ 19.9% stake in Alliance Airlines raises concerns
(AU) AUSTRALIA Q2 IMPORT PRICE INDEX Q/Q: 0.9% V 1.5%E; EXPORT PRICE INDEX Q/Q: 3.8% V 2.8%E

Japan

Nikkei 225 opened -0.7%
(JP) Japan July Final PMI Manufacturing: 49.4 v 49.6 prelim
(JP) Bank of Japan (BOJ) Dep Gov Amamiya: Rate cuts and increase in asset buying and acceleration of base money expansion among options for BOJ easing
(JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.152% v -0.139% prior, bid to cover 3.76x v 3.92x prior

Korea

Kospi opened -0.5%
(KR) SOUTH KOREA JULY CPI M/M: -0.3% V 0.0%E; Y/Y: 0.6% V 0.8%E
(KR) North Korea fired this morning new multiple rocket launcher under leader Kim’s supervision – Yonhap
(KR) Bank of Korea (BOK): May consider further rate cuts if downside risks continue to grow – Yonhap
(KR) Bank of Korea (BOK) Gov Lee: Authorities are not defending a specific USD/KRW level; reiterates will take additional policy steps if conditions worsen, Fed was less Dovish than expected
(KR) South Korea July Trade Balance $2.44B v $4.6Be; Semiconductor exports Y/Y: -28.1% v -25.5% prior
(KR) South Korea July PMI Manufacturing: 47.3 v 47.5 prior (lowest level since Feb, 3rd consecutive month of contraction)
(KR) South Korea Ministry: There has been no big change to Japan position; there is a big gap between the Japanese and Korean positions; chances are considerable for Japan to remove South Korea from the whitelist – Yonhap

China/Hong Kong

Hang Seng opened -0.7%; Shanghai Composite opened -0.4%
(CN) CHINA JULY CAIXIN PMI MANUFACTURING: 49.9 V 49.5E
(HK) Hong Kong Monetary Authority (HKMA) cuts base rate 25bps to 2.50% (inline with its policy to follow Fed policy)
(CN) Xinhua Op Ed: China and the US will be able to keep pushing forward trade talks, as long as both sides take a pragmatic approach and the negotiation is conducted on the basis of equality and mutual respect – Xinhua
(HK) Hong Kong Q2 Advance GDP Q/Q: -0.3% v +0.9%e; Y/Y: 0.6% v 1.5%e (overnight)
(CN) China PBoC Open Market Operation (OMO): Skips for 8th consecutive session; Net CNY0B drained v CNY0B drained prior
(CN) China PBOC sets yuan reference rate: 6.8938 v 6.8841 prior
(HK) Hong Kong Monetary Authority (HKMA) Chief Chan: No noticeable signs of capital outflows from Hong Kong; financial markets and currency not clearly affected by social incidents; US rate cut should impact property market much
(HK) Macau July Gaming Rev (MOP) 24.5B v 23.8B prior; Y/Y: -3.5% v +5.9% prior
(CN) China Army Hong Kong Chief : China army is ready to protect China’s sovereignty
(CN) China and US said to have next round of trade talks in US in Sept 2019 – Xinhua
(CN) White House official: China trade meetings were constructive; China confirmed plan to buy more agricultural products from the US; Confirms expects talks on deal to continue in early Sept

Other

(BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC TARGET RATE BY 50BPS TO 6.00%; MORE-THAN-EXPECTED
(TH) Thailand PM Deputy Sec General Kobsak: Continued Thailand inflows expected after Fed cut; Central Bank will need to monitor inflows closely
(SG) Singapore Trade Min Chan: Singapore is quietly confident in long term outlook

North America

(US) FOMC CUTS TARGET RANGE BY 25BPS TO 2.00-2.25% (AS EXPECTED); REITERATES FED WILL ACT AS APPROPRIATE TO SUSTAIN EXPANSION; TWO MEMBERS DISSENT
(US) Fed Chair Powell: Sees 25bps rate cut as a ‘midcycle policy adjustment’ – Q&A
(US) Fed Chair Powell: This is not the beginning of a long series of rate cuts but it’s not necessarily just one cut; clarifies earlier was ruling out a long cutting cycle
(US) Pres Trump: Fed Chair Powell ‘let us down’
(IR) US White House National Security Adviser Bolton: Confirms US will extend Iran nuclear waivers for 90 days; still waiting to hear from North Korea on resumption of working level talks – US media

Europe

(UK)Treasury: No Deal Brexit fund now £6.3B, immediate £1.1B injection, £2.1B to prepare for no deal Brexit

Levels as of 1:20 ET

Nikkei 225, -0.1%, ASX 200 -0.3%, Hang Seng -0.8%; Shanghai Composite -0.8%; Kospi +0.1%
Equity Futures: S&P500 flat; Nasdaq100 flat, Dax +0.4%; FTSE100 -0.2%
EUR 1.1082-1.1033 ; JPY 109.32-108.70 ; AUD 0.6859-0.6828 ;NZD 0.6564-0.6534
Gold -1.1% at $1,410/oz; Crude Oil -1.1% at $57.93/brl; Copper flat at $2.662/lb