General Trend:
- Trumps response to China over HK move did not mention tariffs or trade deal
- China has yet to reveal any specific countermoves following Trump’s announcement on Friday
- Tech shares rise in HK and Shanghai after Trump’s recent comments on China, Shanghai IT index jumps over 4%
- HK financials lag amid uncertainty about the city’s future role as a global financial center
- Equities in Australia lag as financials decline amid broker commentary
- Capital raise by Vicinity Centers (Aussie REIT) could signal more pain for mall owners (Local press)
- Securities and Transport firms are among the gainers in Japan, banks and insurers lag
- Japan Airlines rises over 2%, Japan said to consider easing entry bans related to multiple countries
- Softbank tracks today’s strength in Asian tech firms
- Hitachi rises over 3% after recently reported earnings/guidance
- Celltrion rises over 4% in South Korea on coronavirus-related data presentation
- Taiwan Semi said to delay 5nm chip expansion amid US restrictions on Huawei (local press)
- China PMIs show expansion in May
- South Korea unexpectedly reported trade surplus in May, chip exports rose over 7%
- Japan’s Capex unexpectedly rose in Q1, data survey had a response rate of ~62%
- Moody’s cut China’s 2020 GDP growth forecast to 1.0% (said 3.3% in April), raised 2021 growth est
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened 0.0%
- (AU) Reserve Bank of Australia (RBA) skips offering to buy bonds for 11th consecutive session
- (AU) Reserve Bank of Australia (RBA) adds A$508M to banking system through repos vs A$1.78B prior
- (AU) Australia May AiG Performance of Manufacturing Index: 41.6 v 35.8 prior
- (AU) Australia Treasurer Frydenberg: See demand gap for construction work in H2, seeking to boost construction activity
Japan
- Nikkei 225 opened +0.2%
- (JP) JAPAN Q1 CAPITAL SPENDING (CAPEX) Y/Y: +4.3% V -5.0%E; CAPITAL SPENDING EX-SOFTWARE: +3.5% V -5.5%E
- (JP) Japan May Final PMI Manufacturing: 38.4 v 38.4 prelim (lowest since March 2009)
- (JP) Japan Foreign Min Motegi: Wants to continue holding high level meetings with China, Will use meetings to address problems between countries
- (JP) Japan PM Abe: Reported to want to submit 2nd extra budget next week – Press
Korea
- Kospi opened +0.4%
- (KR) South Korea Mar short term floating capital KRW1,106.3T (record high) amid uncertainty with coronavnrus and low interest rates – Yonhap citing BOK data
- (KR) South Korea will submit 3rd extra budget on June 4th to parliament
- (KR) South Korea May Trade Balance: +$400M v -$600Me; Exports y/y: -23.7% v -25.1%e; Imports y/y: -21.1% v -20.6%e
- (KR) South Korea May PMI Manufacturing: 41.3 v 41.6 prior (lowest since Jan 2009)
China/Hong Kong
- Hang Seng opened +2.5%; Shanghai Composite opened +0.7%
- (CN) CHINA MAY MANUFACTURING PMI (GOVT OFFICIAL): 50.6 V 51.1E (3rd consecutive month in expansion); Non-Manufacturing PMI: 53.6 v 53.5e (4th consecutive month in expansion)
- (HK) Macau May Gaming Rev (MOP) 1.76B v 0.8B prior, Y/Y: -93.2% v -95.0%e
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos v injects CNY300B in 7-day reverse repos prior; Net injection CN0B v CNY300B prior
- (CN) China PBOC sets Yuan reference rate: 7.1315 v 7.1316 prior
- (CN) CHINA MAY CAIXIN PMI MANUFACTURING: 50.7 V 49.6E (moves back into expansion, highest since Jan 2020)
- (CN) China National Health Commission Coronavirus Update for May 31st: 16 additional cases (16 imported v 2 prior) v 2 prior; Additional deaths: 0 v 0 prior
- (HK) Hong Kong Fin Sec Chan; Reiterates will not impose FX controls
- (CN) Moody’s: Cuts China 2020 GDP outlook to 1% (prior saw 3.3%), raises 2021 GDP est to 7.1% (prior saw 5.7%); notes downside risks remain
Other
- OPEC+ Delegate: Will talk about a short extension of output cuts (1-3 months); may bring forward next meeting a few days to June 4th; preference is to take short term measures and not disrupt the re-balancing of the market – press
North America
- (G7) US President Trump: Planning to delay the next G-7 meeting until September, want to include South Korea, Russia, India and Australia
- (US) SpaceX Dragon Crew successfully docks at International Space Station, less than 1 day after launch from Florida – press
- (US) Unrest continues all over the US (incl fires, looting, riots, and peaceful protests) over the police killing of George Floyd, many cities are under curfew; President Trump has put military on alert for possible deployment to back up local police forces – press
Europe
- (EU) EU Budget Commissioner: Should be a tax impact ~70.0K large EU companies as a charge for access to the single market, in early talks funds to be used for recovery fund – FT
Levels as of 1:15ET
- Hang Seng +3.4%; Shanghai Composite +2.1%; Kospi +1.4%; Nikkei225 +0.4%; ASX 200 +0.5%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 +0.1%
- EUR 1.1140-1.1102; JPY 107.86-107.52; AUD 0.6742-0.6649; NZD 0.6249-0.6187
- Commodity Futures: Gold +0.3% at $1,757/oz; Crude Oil -1.0% at $35.14/brl; Copper +0.3% at $2.45/lb
