General Trend:
- Hang Seng outperforms in Asia, Tencent tracks the recent strength in the US tech sector
- ZTE Corp declines by over 6% in HK amid reduction of stake by parent co.
- Automakers trade generally higher in Japan, other gainers include Transportation and Real Estate firms
- Decliners in Australia include Financials and Energy companies, Resource and Consumer Discretionary firms rise
- Woolworths issued FY20 guidance, plans to open 2 new distribution centers
- Shanghai Composite trades generally flat during morning session
- Apple supplier Hon Hai sees Q3 outlook ‘better than expected’ (AGM comments)
- Japan official said additional stimulus measures are being considered for the fall
- China’s Customs Dept. blocks additional meat imports
- Reserve Bank of New Zealand (RBNZ) is due to hold its next official cash rate (OCR) decision on June 24th (Wed), no policy changes are expected
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.5%
- *(AU) AUSTRALIA JUN PRELIMINARY CBA PMI MANUFACTURING: 49.8 V 44.0 PRIOR (4th consecutive month of contraction, but highest level since Feb); PMI Services: 53.2 v 26.9 prior (first expansion in 5 months, highest level since Nov 2018)
- (AU) Australia Prelim May Exports M/M: -4% v -11% prior ;Imports: -9% v -10% prior
- (AU) Australia State Victoria Premier: reimposes coronavirus restrictions after recent increase in community transmission of coronavirus cases
China/Hong Kong
- Hang Seng opened +0.1%, Shanghai Composite -0.2%
- (CN) White House Adviser Navarro declares trade deal between Trump and China as ‘over’; Trump has decided to terminate the trade deal – Fox [note: the context of the comments is not clear]; Navarro later clarified the Fox News report and said the comments on China trade ‘not as it seems’
- (US) President Trump: US China Trade deal fully intact; Hopes China will continue to live up to terms of trade deal – Tweet
- (CN) China Customs: Reports UK Tulip has stopped pork exports to China due to coronavirus outbreak in Production plant; Brazil Agra stops beef exports to China
- (CN) China Ag Min: Approves 2 additional GMO Soybeans for imports
- (CN) China Finance Ministry (MOF) Sells 10-year special treasury bonds (special coronavirus bonds): avg yield 2.77% v 2.84%e
- (CN) China PBoC sells CNY10B v CNY10B indicated in 6-month bills in Hong Kong: avg yield 2.21%
- (CN) China PBoC Open Market Operation (OMO): Injects combined CNY200B in 7-day and 14-day repos v Injects combined CNY120B in 7-day and 14-day reverse repos prior; Net inject CNY200B v Net injection CNY120B prior
- (CN) China PBOC sets Yuan reference rate: 7.0671 v 7.0865 prior
- (CN) China Financial Regulator Fang Xinghai: China must prepare for the risks of being cut off from the US dollar payment system in case the United States sanctions Chinese companies and banks, just like Washington did with Russian institutions – financial press (comments from June 22nd)
- (US) Treasury Sec Mnuchin: there may come a time when we have China decoupling; it’s something that Pres Trump may consider – press
- (CN) US State Dept has labeled 4 additional China media organizations as foreign diplomatic missions (China Central TV, China News Service, People’s Daily and Global Times) – press
- (HK) Hong Kong Chief Exec Lam: Believes draft of Hong Kong Security Law has eased concerns over the legislation
Japan
- Nikkei 225 opened +0.9%
- (JP) Japan LDP Tax Panel Chief Amari: Expected to compile next stimulus package during the fall
- *(JP) JAPAN JUNE PRELIMINARY PMI MANUFACTURING: 37.8 V 38.4 PRIOR (14th month of contraction); PMI Services: 42.3 v 25.3 prior (6th straight contraction)
- (JP) Japan Exchange to increase trading days for derivatives by allowing trading in national holidays; the plan could take effect during the fall of 2022 or early 2023 – Nikkei; The change is not expected to impact JGB futures trading.
- (JP) Japan Fin Min Aso: Jump in JGB issuance has not increased yield, caused weaker yen
- (JP) Japan May Supermarket Sales Y/Y: +1.3% v -4.5% prior
Korea
- Kospi opened +1.1%
- (KR) South Korea Apr PPI Y/Y: -1.7% v -1.7% prior
- (KR) Bank of Korea (BOK) provides KRW720B in liquidity via weekly repo operations v KRW620B prior
Other Asia
- (SG) Singapore May CPI M/M: 0.5% v 0.4%e; Y/Y: -0.8% v -0.9%e; CPI Core Y/Y: -0.2% v -0.3%e
North America
- (CA) US may enact aluminum tariffs on Canada by end of week – Press
- (US) Treasury Sec Mnuchin and Fed Powell to testify before House Financial Services Committee on June 30th (Tuesday)
Europe
- (CH) SNB’s Zurbruegg: Reiterates stance that FX intervention is vital
Levels as of 1:20 ET
- Nikkei 225, +0.9%, ASX 200 flat, Hang Seng +1%; Shanghai Composite flat; Kospi +0.5%
- Equity S&P500 Futures flat; Nasdaq100 -0.1%, Dax +0.2%; FTSE100 +0.4%
- EUR 1.1281-1.1233 ; JPY 107.22-106.73 ; AUD 0.6936-0.6857 ;NZD 0.6498-0.6436
- Gold -0.1% at $1,764/oz; Crude Oil -0.4% at $40.56/brl; Copper flat at $2.650/lb
