General Trend:
- US President Trump said the US will put a ‘small’ additional tariff of 10% on the remaining $300B of goods and products coming from China, effective Sept 1st (comments from Aug 1st)
- US President Trump is expected to make announcement on EU trade at 13:45 ET
- Japan confirmed that South Korea would be removed from the Japanese trusted export ‘white list’
- Nikkei underperforms amid stronger Yen; Nippon Steel declines over 8% after earnings report and guidance
- Toyota Motor cuts FY outlook due to currency impact, Honda expected to report earnings after Nikkei close
- S&P takes negative rating actions on various Japanese financials, cites review of the country’s banking sector
- Fast Retailing is due to report monthly sales after today’s Nikkei close
- Shanghai property index remains weaker after recent report that PBoC warned banks about lending to the property sector; IT index drops in the face of trade concerns
- Trade concerns weigh on Australia’s mining index; Rio Tinto drops over 3% after recent earnings repot
- Graincorp drops over 6% in Australia on outlook
- AUD/JPY pares decline after Australia June retail sales beat ests, RBA rate decision seen on Tuesday (Aug 6th)
- Yen adds to Thursday’s gain amid risk aversion in markets, lower gov’t bond yields
- Australia 3-yr, New Zealand 10 yr and South Korea 10 yr yields all hit record lows
- Oil rises in Asian trading after declines on Thursday
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.5%
- (AU) AUSTRALIA JUN RETAIL SALES M/M: 0.4% V 0.3%E (fastest growth in 4 months)
- (AU) AUSTRALIA Q2 PPI Q/Q: 0.4% V 0.4% PRIOR; Y/Y: 2.0% V 1.9% PRIOR
- (NZ) New Zealand July Consumer Confidence Index: 116.4 v 122.6 prior; M/M: -5.1% v +2.8% prior (data is below the historical avg); expects the RBNZ to downgrade their outlook at next week’s Monetary Policy Statement.
China/Hong Kong
- Shanghai Composite opened -1.6%, Hang Seng -2.2%
- (US) Pres Trump says U.S. will put a “small” additional tariff of 10% on the remaining $300B of goods and products coming from China on Sept 1st
- (US) President Trump: New China 10% tariffs can be raised BEYOND 25% is progress remains stalled
- (CN) China PBOC sets yuan reference rate: 6.8996 v 6.8938 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for 9th consecutive session; Net CNY0B drained v CNY0B drained prior
- (CN) In July A-share buybacks in China were a record high – Chinese press
Japan
- Nikkei 225 opened -1.5%
- (JP) Japan MOF Top FX Official Takeuchi: Will continue watching FX market amid yen gains
- (JP) Japan removes South Korea from trusted export white-list, according to Japan Press; Japan confirms the move will take place on Aug 28th
- (JP) Japan Econ Min Motegi: Agrees to accelerate trade talks with the USm shared understanding with the US that we don’t have much time
- (JP) Bank of Japan (BOJ) minutes from June policy meeting (two meetings ago): Appropriate to keep easing persistently
- (JP) Japan end-July Monetary Base ¥518.1T v ¥523.2T prior; Y/Y: 3.7% v 4.0% prior
Korea
- Kospi opened -1.1%
- (KR) South Korea may reduce extra budget to KRW5.83T – Korea Press
- (KR) North Korea launches ‘unidentified short-range projectile’ in third instance this week – Yonhap
Europe
- (UK) UK conservative party loses Brecon special election to Liberal Democrats; Conservative party now retains majority by 1 member of parliament
Levels as of 1:20 ET
- Nikkei 225, -2.6%, ASX 200 -0.3%, Hang Seng -2.4%; Shanghai Composite -1.7%; Kospi 0.8%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.3%, Dax -0.2%; FTSE100 -1%
- EUR 1.1097-1.1069 ; JPY 107.57-106.84 ; AUD 0.6820-0.6794 ;NZD 0.6565-0.6536
- Gold +0.7% at $1,442/oz; Crude Oil +2.1% at $55.09/brl; Copper +0.1% at $2.623/lb
