General Trend:
- Iron/Steel, Transportation and Financial companies are among the gainers in Japan, retail sector lags
- Japanese airlines outperform, Japan may ease restrictions on business travel
- Toshiba reported FY earnings and guidance
- Decliners in Australia include Consumer Discretionary and Telecom companies, financials track the earlier strength in the US
- Shanghai trades generally flat during morning session; Property shares and financials decline, IT companies rise
- Upcoming IPOs in focus for HK markets (Netease, JD.com)
- Bharti Airtel commented on speculation related to Amazon; said no such proposal is in consideration at the current time
- China May trade balance data could be released on Saturday, June 6th (NY Time)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- (AU) Australia to increase foreign investment rules related to sensitive assets; some of the industries that may be impacted include telecom, energy, technology and defense (as speculated)
- (AU) Australia PM Morrison: Announces new foreign investment Rules; Investment in Austrlia must be in our interest and on our terms
- (AU) Australia sells A$1B v A$1.0B indicated in 1.25% May 2032 bonds, avg yield 1.17%, bid to cover 3.7x
- (NZ) New Zealand Fin Min Robertson: New Zealand economy seems to be recovering “quicker”; Retail sales have picked up well
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$325M v NZ$300M prior in government bonds as part of QE v NZ$325M sought
- (NZ) Reserve Bank of New Zealand (RBNZ): Will seek to purchase NZ$1.08B v NZ$1.08B prior in government bonds next week
- (NZ) New Zealand extends wage subsidies to an additional 40k Businesses
China/Hong Kong
- Hang Seng opened +0.1%, Shanghai Composite +0.1%
- Li & Fung [494.HK]: Reported to cut 70% of purchasing department staff in Hong Kong – Press
- (CN) China PBOC sets Yuan reference rate: 7.0965 v 7.1012 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY150B in 7-day reverse repos v Injects CNY70B; Net drain CNY150B v Net drain CNY170B prior
- (US) USTR Lighthizer: still feel very good about the Phase 1 trade deal with China; China has done a good job with the trade deal amid the coronavirus crisis
- (HK) Bipartisan measure in Congress said to urge US President Trump to use Sanctions on China over Hong Kong
- (CN) Sec of State Pompeo will warn in a speech today against American investors from ‘fraudulent’ accounting practices of Chinese companies
- (HK) Follow Up: Xinhua: Separate customs status for Hong Kong has legal basis in WTO agreement, cites China Commerce Ministry (MOFCOM) spokesman Gao Feng
- (HK) China and US ‘financial war’ related to Hong Kong not likely, cites analysts; there is still risk that the US will impose ‘strong’ financial sanctions on China for imposing the HK national security law – SCMP
- (HK) Hong Kong Finance Chief Chan: Reiterates we have a contingency plan for US actions; China stands ready to defend HK’s exchange rate system; Escalating US/China tension is a ‘new normal’
- (HK) Hong Kong Monetary Authority (HKMA) sold HK$977M into the market [HKD traded at strong end of its trading range vs the US dollar]
- (CN) China National Health Commission Coronavirus Update for June 4th: 5 additional cases (5 imported v 1 prior) v 1 prior; Additional deaths: 0 v 0 prior
Japan
- Nikkei 225 opened -0.4%
- (JP) Japan govt preparing to lift quarantines for business travelers in summer; will prioritize visitors from Thailand, Vietnam, New Zealand, and Australia first – Nikkei
- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Raises 5-10 yr JGB purchases to ¥400B v ¥370B prior (as expected*)
- (JP) Japan Apr Household Spending Y/Y: -11.1% v -14.0%e, M/M: -6.2% v -8.7%e (Largest y/y drop on record)
- (JP) JAPAN APR PRELIMINARY LEADING INDEX CI: 76.2 V 76.3E; COINCIDENT INDEX: 81.5 V 82.7E
- (JP) Japan May Official Reserve Assets: $1.38T v $1.369T prior
Korea
- Kospi opened flat
Other Asia
- Largan [3008.TW]: Supplier Largan licenses patent for Camera lens to Apple – Taiwan Press
- (SG) Singapore Apr Retail Sales M/M: -31.7% v -27.0%e; Y/Y: -40.5% v -34.9%e
North America
- Novavax [NVAX]: Receives US Department of Defense contract for coronavirus vaccine; DOD to provide $60M for funding for research, production of vaccine, first deliveries in 2020
- (US) Fed Total Balance Sheet Size as of June 3rd: $7.21T (record),+$41.8B w/w (update)
- (US) US financial press comments on the possibility of the Fed adopting a yield-curve control (YCC) policy, notes analyst commentary
- (US) President Trump cancels trip to New Jersey for this weekend due to protests
- Gamestop [GME]: Guides Q1 Net -$172M to -$162M v $6.8M y/y; SSS down 16-17% y/y (ex pandemic impact), down 30-31% including impact of pandemic
Europe
- (EU) ECB INCREASES SIZE OF ITS PANDEMIC BOND BUYING FUND (PEPP) FROM €750B TO €1.35T (from June 4th)
- OPEC+ reported to meet June 6th to discuss extending Oil Output cuts – Press
Levels as of 1:20 ET
- Nikkei 225, +0.4%, ASX 200 +0.1%, Hang Seng +0.3%; Shanghai Composite -0.2%; Kospi +1.3%
- Equity Futures: S&P500 +0.5%; Nasdaq100 +0.3%, Dax +0.8%; FTSE100 +0.6%
- EUR 1.1355-1.1326; JPY 109.23-109.04; AUD 0.6980-0.6929; NZD 0.6492-0.6456
- Gold -0.7% at $1,715/oz; Crude Oil flat at $37.44/brl; Copper +0.2% at $2.491/lb
