Indices Opened Generally Higher After Gains In The US

Jul 01 20, 06:45 GMT

General Trend:

Shanghai Composite index tested the 3,000 psychological level for the first time since March amid easing by the PBOC, sectors moving higher include Consumer Discretionary and Property
Japanese equities lag amid the stronger Yen; Declining sectors include Real Estate, Insurance and Transportation
Consumer Discretionary sector rises in Australia, energy sector lags
FedEx rose over 8% in afterhours trading on better than expected results
Japan 30-yr JGB yield rises to highest level since March 2019, BoJ’s July bond purchase plan has led to speculation that the central bank may seek to steepen the yield curve; US 30-year Treasury Bond FUTs decline amid the new month and quarter
Bank of Korea (BOK) plans to conduct outright purchase of KRW1.5T worth of gov’t bonds on Thursday (July 2nd)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
(AU) Australia Victoria state reports 73 additional coronavirus cases v 64 prior (over 2 month high)
(AU) Australia Jun Final CBA PMI Manufacturing: 51.2 v 49.8 prelim (Move into expansion territory after 3 Months of contraction)
(AU) Australia Jun AiG Performance of Manufacturing Index: 51.5 v 41.6 prior (Highest since July 2019)
(AU) AUSTRALIA MAY BUILDING APPROVALS M/M: -16.4% V -7.8%E; Y/Y: -11.6% V -7.8%E
(AU) Australia May Private Sector Houses Approvals M/M: -4.4% v +2.7% prior
(AU) Australia May CoreLogic House Prices M/M: -0.8% v -0.5% prior
(AU) Australia sells A$2.0B v A$2.0B indicated in 2.75% Nov 2028 bonds, avg yield 0.7959%, bid to cover 3.6x
Air New Zealand [AIR.NZ]: Announces Auckland to Melbourne passenger flights will be suspended from July 1-14 [citing govt restrictions]
(NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: There is ‘nothing magic’ about 50% of QE ceiling [relates to indemnity agreement with NZ government]; By August RBNZ will have clarity on LSAP program on delivery stimulus
(NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$390M v NZ$146M prior in government bonds as part of QE v NZ$390M sought

China/Hong Kong

Hang Seng closed for holiday, Shanghai Composite opened +0.2%
(CN) China may announce restrictions on US media – Global Times
(CN) CHINA JUN CAIXIN PMI MANUFACTURING: 51.2 V 50.5E
(CN) FCC designates Huawei and ZTE as national security threats – press
(CN) China PBoC said to cut the Relending rate by 25bps to 2.00% on July 1st; to also cut interest rates related to financial stability refinancing loans by 50bps to 1.75% – financial press
(CN) China PBoC Open Market Operation (OMO): Skips reverse repos v Skips prior; Net drain CNY180B v Net drain CNY90B prior (3rd straight skip)
(CN) China PBOC sets Yuan reference rate: 7.0710 v 7.0795 prior
(CN) China to strengthen rules on selling bonds related to coronavirus relief
(HK) China briefing on Hong Kong national security law: New Law will plug loopholes in Hong Kong legal systems
(HK) Hong Kong Police Spokesman: People who display pro-independence material will face arrest and prosecution under Hong Kong National Security Law
(HK) Macau Jun Gaming Rev (MOP): 716M v 1.76B prior; Y/Y: -97.0% v -93.2% prior

Japan

Nikkei opened +0.2%
(JP) JAPAN Q2 TANKAN LARGE MANUFACTURING INDEX: -34 V -31E (lowest level since 2009); OUTLOOK SURVEY: -27 V -24E
(JP) JAPAN JUN CONSUMER CONFIDENCE INDEX: 28.4 V 28.0E
(JP) Bank of Japan (BOJ) announces Bond purchases for month of July (June 30th)
(JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: raises purchases of 3-5 year JGBs (as expected)
(JP) BoJ Dep Gov Wakatabe: Central banks must consider price stability during coronavirus pandemic – Column in Nikkei
(JP) Japan Chief Cabinet Suga: Current coronavirus situation does not require emergency declaration currently
(JP) Japan Dep PM Aso: Snap election in autumn is preferable – financial press (from June 30th)
(JP) Japan govt reportedly considering loosening travel restrictions with China and South Korea – Japanese press
(JP) Japan PM Abe said to plan to attend G7 meeting in late Aug, the meeting will be held in the US – Japanese press
(JP) Tokyo reports >60 cases of coronavirus (3rd straight day of >50 cases)

Korea

Other Asia

(IN) India Jun PMI Manufacturing: 47.2 v 30.8 prior (3rd straight contraction)
(PH) Philippines Central Bank (BSP): To issue BSP securities for the first time in Q3 via auction; notes the need for greater flexibility to manage liquidity
(TW) Taiwan Jun Manufacturing PMI: 46.2 v 41.9 prior

North America

(US) US Senate passes Paycheck Protection Program extension bill, also passes bill which gives companies more time to apply for relief
Alphabet [GOOGL]: Google to delay reopening of offices due to coronavirus concerns related to western and southern US states; all of the company’s US offices to remain closed until at least early Sept – Press
Apple [AAPL]: Looking to reduce production delays for its 5G iPhones – Nikkei
BOC Aviation [2588.HK]: Confirms cancellation of orders for 30 Boeing 737 Max planes, deferred delivery of other 737 Max jets

Europe

Airbus [AIR.FR}: Plans to cut 15K jobs (~11% of workforce)
SocGen [GLE.FR]: Australia regulator ASIC: SocGen Australia pleads guilty to client money offences

Levels as of 1:20 ET

Nikkei 225, -1.1%, ASX 200 +0.2% , Hang Seng closed; Shanghai Composite +0.9% ; Kospi +0.1%
Equity S&P500 Futures: -0.4%; Nasdaq100 -0.3%, Dax -0.2%; FTSE100 -0.3%
EUR 1.1240-1.1215 ; JPY 108.16-107.58 ; AUD 0.6918-0.6885 ;NZD 0.6466-0.6440
Gold flat at $1,800/oz; Crude Oil +1.3% at $39.79/brl; Copper +0.6% at $2.732/lb