US Session Highlights
(US) APR S&P / CASE-SHILLER 20-CITY M/M: 0.28% V 0.50%E; Y/Y: 5.67% V 5.90%E; HOUSE PRICE INDEX (HPI): 197.19 V 195.38 PRIOR
(US) JUN RICHMOND FED MANUFACTURING INDEX: 7 V 5E
(US) JUNE DALLAS FED MANUFACTURING ACTIVITY: 15.0 V 16.0E; new orders 6 v 0 prior
(US) JUN CONSUMER CONFIDENCE: 118.9 V 116.0E
(US) FDA to take new steps to improve prescription drug competition; to expedite review of generic drug applications
(CN) Trump administration reportedly mulling tougher stance on China trade which could include steel tariffs – press
(US) Fed’s Harker (hawk, voter) still supports one more rate hike this year; inflation weakness likely temporary
(US) Sen Cornyn (R-TX): Senate will vote on healthcare bill this week; expects to have support to get it done
Stocks fell across the board today, with technology showing the largest losses, as the Nasdaq dropped 1.6%. The S&P was not far behind; it had its lowest close in 6 weeks. Investors have begun to take note of the downward movement, as the VIX increased 10% to 11.06, its highest close in 2 weeks. Financials rose 0.5% on the day, the only sector posting gains.
US markets on close: Dow -0.5%, S&P500 -0.8%, Nasdaq -1.6%
Best Sector in S&P500: Financials
Worst Sector in S&P500: Technology
Biggest gainers: SIG +4.6%; DRI +2.9%; CHK +2.8%
Biggest losers: ARNC -9.0%; STX -6.8%; NFLX -4.1%
At the close: VIX 11.1 (+1.2pts); Treasuries: 2-yr 1.37% (+1bps), 10-yr 2.20% (+6bps), 30-yr 2.74% (+4bps)
Politics
(US) President Trump: I just finished a great meeting with the Republican Senators concerning HealthCare. They really want to get it right, unlike OCare! – tweet
(VE) Venezuela President Maduro: Supreme Court building in Caracas suffered a "terror attack" by police helicopter – press
(JP) Japan chief cabinet secretary Suga: Defense Min Inada will continue to perform his duties; Remarks were reported to PM Abe, have no impact on timing of cabinet reshuffle – press
Key economic data
none seen
Asia Session Observations
Sentiment has turned more cautious as investors sold both Equities and Treasuries in US session, while the Vix jumped above 11. Euro spiked up over 1 big figure overnight on much less dovish comments from ECB President Draghi. USD/JPY is pulling back to 112 handle after rising above 112.40, while Nikkei225 has reversed its opening gains.
Takata briefly resumed trading, plunging over 40%; Toshiba is also struggling to close its chip unit sale on resistance from WDC.
Speakers and Press
China
(CN) PBoC adviser: Anticipates no further tightening of monetary policy in H2 – Chinese press
(CN) Bank of China (BOC) economists see China 2017 GDP around 6.8% – press
(CN) China Beige Book International (CBB) Q2 survey: Economy continues to improve
(CN) China Academy of Social Sciences (CASS): Q2 GDP estimated at 6.8% v 6.9% in Q1; 2017 GDP seen around 6.7% v around 6.5% official target – Chinese press
Japan
(JP) Japan PM Abe reportedly considering abandoning plans to balance the budget by FY20 in exchange for looser debt-to-GDP ratio target – press
(JP) Japan top banks sold off their JGB holdings to lowest level on record – Nikkei
Australia / New Zealand
(AU) Former RBA board member Edwards: RBA may raise interest rates as many as 8 times in 2018-19 – AFR
(NZ) According to latest RBNZ data, property investors borrowing in May fell to NZ$1.5B from NZ$2.5B y/y
(NZ) RBNZ Gov Wheeler: Outlook for growth remains positive – statement of intent outlining priorities
Korea
(CN) China National Petroleum Corporation (CNPC) suspends fuel sales to North Korea over concerns that it won’t get paid
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.3%, Hang Seng -0.4%, Shanghai Composite +0.1%, ASX200 +0.3%, Kospi -0.2%
Equity Futures: S&P500 -0.1%; Nasdaq -0.3%, Dax flat, FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1330-1.1355; JPY 112.05-112.35; AUD 0.7580-0.7615; NZD 0.7260-0.7285
Aug Gold +0.5% at 1,253/oz; Aug Crude Oil -0.2% at $44.14/brl; Sept Copper +0.2% at $2.66/lb
(US) Weekly API Oil Inventories: Crude: +0.9M v -2.7M prior
(CN) PBOC SETS YUAN MID POINT AT 6.8053 V 6.8292 PRIOR; strongest Yuan fix since June 19th
(CN) PBoC: To skip today’s open market operation (OMO); 4th consecutive skip
(CN) China MOF sells 3-yr bonds at 3.4349% v 3.42%e; bid-to-cover 2.73x
(AU) Australia sells A$800M in 2027 bonds; avg yield 2.4791%; bid-to-cover 3.5x
Asia equities notable movers
Australia
Sirtex Medical (SRX) +14.9%; To cut staff by 15%; to write off A$90M in R&D, performing within FY17 guidance
Nine Entertainment (NEC) +6.1%; Raises FY17 Reported EBITDA to A$200-210M; Sees FY17 reduction in the licensing fees that it has to pay, equal to ~A$33M (guided A$158-187M on May 2nd)
AusNet Services (AST) +2.5%; Raised at Credit Suisse
Japan
FujiFilm (4901) -1.1%; Files to delay financial results to July 31st
Toshiba (6502) -1.2%; CEO: Western Digital is unfairly obstructing the chip unit sale; Looking to resolve dispute at an early stage
Hong Kong
Yanzhou Coal (1171) +2.6%; Raised at HSBC
Kenford Group holdings (464) -7.1%; Reports FY17 (HK$) Net loss 22.2M v 22.5M y/y; Rev 495.4M v 522.9M y/y
