Yen Rises After Monday’s Declines

Aug 27 19, 06:41 GMT

General Trend:

FT: Asian stocks rise as China/US trade fears ease
On Monday, US President Trump said China called US trade negotiators and wants to come back to the negotiating table, not aware of Chinese officials disputing trade calls; Treasury Sec Mnuchin has had ‘many’ calls over last 48 hours with China
China Foreign Ministry official said he was not aware of weekend phone calls between US and China
Shanghai Composite outperforms; IT and Telecom services firms gain amid reports of ‘trade hopes’, ZTE rises ahead of possible earnings
Consumer Discretionary index in Shanghai supported by automakers
Hang Seng underperforms as protest concerns linger; HK Leader Lam noted the ‘escalation’ of violence during the weekend protests
Smartphone maker Xiaomi declines after recent stock sale by President
Trade-sensitive Marine/Transportation index rises in Japan
Offshore yuan (CNH) rises on stronger than expected CNY fix, later pares gain
AUD/JPY declines after Monday’s gains; Australian writer Yang Hengjun charged with espionage by China (Aussie press)
RBA Deputy Gov Debelle: Floor for interest rates in Australia likely around 0-0.5% [current RBA cash rate is 1.00%], Aussie may decline further
There is speculation India could seek to reduce gov’t borrowing after surplus transfer from RBI; Indian bond yields decline over 5bps

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
(AU) Reserve Bank of Australia (RBA) Asst Gov Debelle: Threats to global trade are a risk not only to Australia but also the world; A$ playing an important role as shock absorber – “A Balance of Payments”
WES.AU Reports FY18 (A$) Net 5.5B v 1.2B y/y; EBIT 2.9B v 2.3B y/y, Rev 27.9B v 26.8B y/y
CTX.AU Reports H1 (A$) RCOP Net 135M v 296M y/y; Rev 10.3B v 10.2B y/y; Targeting to cut costs by A$100M/year, to sell 50 retail sites; cuts FY capex guidance
(AU) Australia working to court India as a consistent buyer of Aussie coal, as tensions from China and other nations decreasing their coal buying weigh on the industry – press
(AU) Australian writer Yang Hengjun charged with espionage by China – Aussie press

Japan

Nikkei 225 opened +1.0%
(JP) Japan Fin Min Aso: Will not comment on current FX level; currency stability is important and closely watching market moves with a sense of urgency; no change to sales tax hike plans
(JP) Japan’s top 3 banks will form collaboration agreements this week with several African financial services providers which will open up Africa to greater Japanese investment – Nikkei
(JP) Japan PM Abe to reshuffle cabinet and LDP executives in September – Japan Press
(JP) Japan July PPI Services Y/Y: 0.5% v 0.6%e
7238.JP Appoints Nidec’s Yasuhiro Miyaji CEO (after the close yesterday)
(JP) Japan Econ Min Motegi: Want to deal with auto tariff issue in trade deal with US; not true that US overpowered Japan in recent talks

Korea

Kospi opened +0.7%
(KR) South Korea Aug Consumer Confidence: 92.5 v 95.9 prior (2-year low)
(KR) South Korea Financial Services Commission (FSC) chairman: Govt will expand financial support for companies impacted by Japan’s export restrictions if needed (removal from Japan’s
white list to take effect this week) – Yonhap
(KR) South Korea sells 30-year Govt bonds; avg yield 1.26% v 1.375% prior

China/Hong Kong

Hang Seng opened +0.1%; Shanghai Composite opened +0.6%
(CN) CHINA JULY INDUSTRIAL PROFITS Y/Y: +2.6% V -3.1% PRIOR; YTD Y/Y: -1.7% V -2.4% PRIOR
(CN) China PBoC Open Market Operation (OMO): Injects CNY80B in 7-day reverse repos v skips prior; Net inject CNY30B v skips prior
(CN) CHINA PBOC SETS YUAN REFERENCE RATE: 7.0810 V 7.0570 PRIOR (weakest level since March 18, 2008)
(CN) China People’s Daily Op Ed: US should not misjudge China’s will to retaliate, firmly opposes ant provocation
(CN) China Foreign Ministry spokesperson Geng Shuang: not aware of US-China weekend phone calls, clearly haven’t heard of such a thing (overnight)\
(HK) Hong Kong Chief Exec Lam: Still working on a platform for dialogue with protesters; confident can handle situation alone, but if violence continues only thing to do is stamp it out with law enforcement

Other Asia

(IN) Reserve Bank of India (RBI) approved INR1.76T funding to Govt – financial press
(PH) Philippines Central Bank Chief Diokono: Optimistic about growth prospects, expects 2019 GDP growth to hit lower end of 6-7% target; global policy easing might be both longer and deeper

North America

JNJ OKLAHOMA JUDGE RULES J&J LIABLE IN OPIOID LAWSUIT FOR $572M (LOWER THAN EXPECTED IN $17B LAWSUIT); Confirms plans to appeal Oklahoma opioid lawsuit decision
(US) President Trump: believes China is sincere, want a deal badly; Treasury Sec Mnuchin has had many calls over last 48 hours with China; Very close to making trade deal with the EU; believes will be able to make deal without going down tariff auto route – press interview at G7
BA Russia aircraft leasing company, Avia, files lawsuit to cancel order for 35 of its grounded 737 Max planes – FT

Europe

G7 summit statement: G7 is committed to open and just global trade; Seeks WTO reform to guard intellectual property
(IT) Italy coalition talks remain stuck around 2020 budget – Italian press
(UK) PM Europe Adviser Frost to visit Brussels on Weds to discuss alternatives to Brexit plan – UK press

Levels as of 1:20 ET

Nikkei 225, +1%, ASX 200 +0.5%, Hang Seng -0.2%; Shanghai Composite +1.5%; Kospi +0.3%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax flat; FTSE100 -0.4%
EUR 1.1108-1.1098 ; JPY 106/17-105.66 ; AUD 0.6780-0.6754 ;NZD 0.6400-0.6369
Gold +0.1% at $1,538/oz; Crude Oil +0.6% at 53.96$/brl; Copper +0.1% at $2.546/lb