Asian Markets Trade Higher After US Gains, US Equity FUTs Had Uneventful Start To The Week

General Trend:

• Japanese equities outperform in Asia, sectors moving higher include Iron/Steel, Transport and Banks; JP automakers also track Friday’s gains in the US
• Shanghai Composite rose by over 1% during morning session after 2% loss on Friday; Gainers included Industrials and small-caps
• Hang Seng opened higher, HSBC and Standard Chartered rise after losses on Friday; US said to consider ‘limited’ options to deal with China over Hong Kong (US financial press)
• Gainers in Australia include Financial, Resource and Consumer Discretionary cos.
• Nanya Technology (large DRAM maker) rises over 4% afterQ2 results and guidance

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened flat
• (AU) Victoria state (Australia) reports 177 additional coronavirus cases v 288 cases on July 10th
• (AU) Australia: Launches previously announced new 0.25% Nov 2025 bond syndicate (as expected), initial pricing guidance is 17-20bps/implied bid yield for the primary 3-year Treasury Bond futures contract; the issue will be of a benchmark size; The issue is expected to be priced on Tuesday, 14 July 2020
• (NZ) New Zealand Jun Food Prices M/M: +0.5% v -0.8% prior
• (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$320M v NZ$240M prior in government bonds as part of QE v NZ$320M sought
• (NZ) New Zealand Debt Management Office (DMO) comments on previously announced May 2041 bond syndicate plan: To offer at least NZ$2.0B in May 2041 bonds, offering to price on July 14th (Wed)

China/Hong Kong

• Hang Seng opened +0.5%, Shanghai Composite -0.1%
• Shanghai Junshi Biosciences [1877.HK]: Announces Completion of Enrollment in Phase I Trial of SARS-CoV-2 Neutralizing Antibody JS016 in China
• (HK) US said to consider ‘limited’ options to deal with China over Hong Kong, reiterates there are concerns that measures against HK’s financial system could hurt US companies; Trump administration officials could announce sanctions or other measures – US financial press
• (US) Pres Trump: a Phase 2 trade deal with China is far from my mind and unlikely to happen at this point (comments from July 10th)
• (CN) China Central Bank (PBoC) official Guo Kai: Commented on emergency measures that were undertaken to address the impact of coronavirus; the role of traditional monetary policy may become more obvious
• (CN) China and Iran said to be close to signing a 25-year wide ranging partnership that would help offset US pressure – press
• (CN) Follow Up: China fund industry should be rational in A-share ‘boom” – Chinese press
• (CN) China PBoC Open Market Operation (OMO): Injects CNY50B via 7-day reverse repos v Skips prior; Net injection CNY50B v Net drain CNY0B prior
• (CN) China PBOC sets Yuan reference rate: 6.9965 v 6.9943 prior

Japan

• Nikkei 225 opened +1.4%
• (JP) Tokyo reported to waive accommodation taxes through Sept 2021 – Press
• (JP) Follow up: Bank of Japan (BOJ) named Seiichi Shimizu (current head of markets dept) as head of dept that oversees the drafting of monetary policy; the change takes effect from July 20th (Monday) – financial press
• (JP) Japan May Tertiary Industry Index M/M: -2.1% v -3.7%e

Korea

• Kospi opened +0.9%
• (KR) South Korea Jul 1-10th exports Y/Y -1.7% v +20.2% prior; Imports Y/Y -9.1% v +8.5% prior; Chip exports +7.7% y/y

Other Asia

• (PH) Philippines Central Bank (BSP) Gov Diokno: Philippines pausing rate cuts
• (SG) Singapore PM Lee: Singapore closely tracking coronavirus cases; Cinemas can reopen starting today (July 13th)

North America

• Maxim Integrated Products [MXIM]: Analog Devices reported to be in talks to acquire Maxim Integrated for >$17B in stock – Press
• (US) World Health Organization (WHO) noted that globally new virus cases rose by 230,370 in 24 hours (record increase); On Sunday Florida reported over 15,000 new coronavirus cases (record increase); South Africa has resumed its curfew and alcohol ban amid rise in virus cases – press
• (US) Environmental Protection Agency (EPA): To retain ozone standards set in 2015

Europe

• (IT) Fitch affirms Italy sovereign rating at BBB-; outlook Stable (remains lowest level of investment grade) [from July 10th]
• (FR) US to issue 25% tariff on $1.3B of French goods in retaliation for digital tax; the new duties won’t be imposed for 6 months – press (from July 10th)
• (IE) Ireland Jun Ulster Bank Ireland Construction PMI: 51.9 v 19.9 prior

Levels as of 1:20 ET

• Nikkei 225, +2%, ASX 200 +0.8% , Hang Seng +1.3%; Shanghai Composite +1.8% ; Kospi +1.7%
• Equity S&P500 Futures: +0.5%; Nasdaq100 +0.5%, Dax +0.7%; FTSE100 +0.3%
• EUR 1.1330-1.1300 ; JPY 106.94-106.78 ; AUD 0.6998-0.6939 ;NZD 0.6583-0.6565
• Gold +0.3% at $1,807/oz; Crude Oil -0.8% at $40.20/brl; Copper +2.3% at $2.9820/lb