General Trend:
- Lingering trade concerns weigh on the IT and Telecom Services sectors in China
- Huawei’s corporate bond spreads said to widen; Trump administration said to be delaying the issuance of licenses related to the Chinese company (press)
- Hikvision Digital declines over 3% in China; US agencies said to replace thousands of cameras and other types of hardware from Chinese security suppliers (press)
- China sovereign wealth fund said to take over HengFeng Bank, PBOC conducts another central bank bill swap (CBS) operation
- Financials and gaming firms drop in Hong Kong
- Russian aluminum producer Rusal declines over 10% in HK, issued cautious outlook on H2 aluminum demand
- Real estate firms are among the gainers in Japan
- South Korea said to tighten environmental checks on Japan coal ash imports in possible counter measure
- Japan’s Fast Retailing said ‘boycott’ in South Korea has impacted sales
- Kospi outperforms amid gains in chipmakers
- Australian home building materials firm James Hardie rises over 14% post earnings and guidance
- RBA Gov Lowe commented on unorthodox policy, affirmed stance
- RBA’s Quarterly Statement on Monetary Policy (SOMP) suggested markets are pricing in 2 more rate cuts (to 0.50%)
- BoJ raised offer to buy 1-3 yr JGBs, cut offer to buy 3-5 yr and 10-25 yr JGBS; the move has led to some speculation that the BoJ might be attempting to steepen the yield curve [Note: In the past, BoJ officials have stated that daily bond buying operations were not intended to signal monetary policy changes]
- Japan Q2 prelim GDP beat ests; business spending was better than expected, while external demand was not as bad as feared
- China July PPI saw the largest annual decline since Aug 2016; CPI rose at the fastest rate since early 2018 as pork prices accelerated
- Today’s yuan fix less eventful vs recent days, CNY again fixed weaker than the ‘7.0′ level
- Taiwan Semi expected to release July sales later today
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.3%
- (AU) Reserve Bank of Australia (RBA) Gov Lowe testifies before Economics Committee:Unlikely for rates to reach lower bound but prudent to be thinking about policy at lower bound although hopes it we can avoid that; Need to be very close to zero to consider QE
- (AU) RBA STATEMENT ON MONETARY POLICY (SOMP): Reiterates prepared to ease monetary policy further if needed, reasonable to expect extended period of low interest rates
- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: New Zealand is in a great position as headwinds mount; too much or too soon on rates is better than too late; 2% inflation target remains appropriate
- (NZ) RBNZ Bascand: Growth needs to exceed potential; potential growth rate now about 2.7%; reiterates some probability of another rate cut
- (NZ) New Zealand July Heavy Truckometer M/M: 4.1% v -4.5% prior
China/Hong Kong
- Shanghai Composite opened +0.4%, Hang Seng +0.6%
- ZTE [763.HK]: Operations are normal, fundamentals unchanged – Financial Press
- (CN) CHINA JULY CPI Y/Y: 2.8% V 2.7%E (fastest annual increase since Feb 2018); PPI Y/Y: -0.3% v -0.1%e (largest annual decline since Aug 2016)
- (CN) China PBoC sets Yuan Reference Rate: 7.0136 V 7.0039 prior (weakest yuan fixing since April 3rd 2008)
- (CN) China PBoC Adviser Ma Jun reiterates China capable of keeping yuan stable; yuan flexibility has significantly increased in recent years
- (CN) China sovereign wealth fund (CIC) takes over HengFeng Bank to increase capital adequacy ratio and improve management – China Financial Press
- (CN) China PBoC to conduct CNY5B Central Bank Bill Swap (CBS) operation later today (Aug 9); coupon rate will be 2.35%
- (CN) China PBoC Open Market Operation (OMO): Skips for 13th consecutive session
- (CN) China issues red alert for super typhoon Lekima which is approaching Shanghai; Taiwan markets have been closed and flights cancelled
Japan
- Nikkei 225 opened +0.8%
- (JP) Nikkei 225 Aug options said to settle at ~20,856
- (JP) JAPAN Q2 PRELIMINARY GDP Q/Q: 0.4% V 0.1%E; GDP ANNUALIZED Q/Q: 1.8% V 0.5%E (3rd straight quarter of expansion)
- (JP) Japan Economy Min Motegi comments on prelim Q2 GDP: Data showed Japan’s economy in moderate recovery due to robust consumption and Capex
Korea
- Kospi opened +1.0%
- (KR) South Korea sells KRW500B v KRW500B indicated in 50-year bonds: avg yield 1.275% v 1.650% prior
- (KR) Fitch affirms South Korea sovereign rating at AA- outlook stable
North America
- (US) Pres Trump: Joseph Maguire will be named as acting Intelligence Director
Europe
- (IT) Italy Dep PM Salvini (League) says he will seek the PM post in an upcoming vote
Levels as of 1:20 ET
- Nikkei 225, +0.5%, ASX 200 +0.3%, Hang Seng -0.1%; Shanghai Composite -0.3%; Kospi +1.1%
- Equity Futures: S&P500 -0.4%; Nasdaq100 -0.5%, Dax -0.3%; FTSE100 -0.1%
- EUR 1.1198-1.1179 ; JPY 106.10-105.72 ; AUD 0.6819-0.6778 ;NZD 0.6495-0.6460
- Gold +0.6% at $1,518/oz; Crude Oil -0.1% at $52.48/brl; Copper -0.1% at $2.597/lb
