General Trend:
- Shanghai Composite drops over 1.9% during morning session; Decliners include IT cos. and banks
- Shanghai and HK property firms decline, Shenzhen said to tighten certain home purchase rules
- ZTE declines by over 3% in HK; Trump confirmed the US would end HK’s preferential treatment [this could lead to restrictions on HK’s access to certain high-tech products]
- Kweichow Moutai may report H1 results later today (financial press)
- Japanese Iron/Steel, Real Estate and Transport firms are among the gainers; JP banks lag the broader market
- Sectors moving higher in Australia include Resources and Consumer Discretionary
- Australian energy firms continue to reveal impairment losses (Woodside Petroleum, Origin Energy)
- AUD/JPY rises ahead of AU and China data due on Thursday, tracks gains in equity markets
- Australia Jun jobs data is due for release on July 16th (Thursday)
- China Q2 GDP data is due on Thurs (July 16th), y/y expected at +2.2% vs -6.8% prior
- Bank of Korea (BOK) also due to hold policy meeting on Thursday
- Companies expected to report results during the NY morning include Bank of NY, Goldman Sachs, PNC, UnitedHealth, US Bancorp
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.3%
- (AU) Australia Jul Westpac Consumer Confidence: 87.9 v 93.7 prior; M/M: -6.1% v 6.3% prior
- (AU) Australia New South Wales State reports 13 additional coronavirus cases
- (AU) Victoria state reports 238 additional coronavirus cases v 270 prior; Reports 1 additional death
- (NZ) New Zealand PM Ardern: New Zealand Must prepare for coronavirus penetrating borders; Elimination strategy will remain in place
China/Hong Kong
- Hang Seng opened +1.6%, Shanghai Composite +0.2%
- Bank of Communications [3328.HK]: China pension fund sold 42.3M A-shares in Bank of Communications on Tuesday – press
- Meituan [3690.HK]: China reported to be in talks to test digital yuan (CNY) currency with Meituan
- (CN) Shenzhen (China) said to tighten home purchase rule regarding social security payments – US financial press
- (CN) A couple of banks in China have asked the PBOC to ease the way that it assesses one indicator related to capital adequacy – financial press [the specific indicator was not disclosed]
- (US) Pres Trump: China sanctions legislation will hold China accountable for its actions in Hong Kong; also signs executive order ending preferential treatment for Hong Kong – comments at ‘Hong Kong Autonomy Act’ signing ceremony
- (HK) US White House issues executive order on Hong Kong Normalization (As expected)
- (CN) US President Trump: We can impose massive tariffs on China if we want; reiterates China is buying massive amounts of Agricultural product; Reiterates you will see more coming on actions toward China.
- (CN) US Speaker of House Pelosi (D-CA): Urges Trump to consider every tool for action on China
- (US) China: will implement Sanctions on US officials over Hong Kong
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos v Injects CNY30B via 7-day reverse repos prior
- *(CN) CHINA PBOC CONDUCTS CNY400B 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) OPERATION: RATE 2.95% V 2.95% PRIOR; completely rolls over maturing MLF and TMLF funds
- (CN) China PBOC sets Yuan reference rate: 6.9982 v 6.9996 prior
- (HK) Hong Kong Police reported to arrest democratic party Vice Chairman – Press
- (CN) China to promote new energy vehicle sales in rural areas
Japan
- Nikkei 225 opened +1%
- (JP) Bank of Japan (BOJ) left policy unchanged (as expected); In case of rapid yield rise, BOJ will buy JGBs promptly
- (JP) Bank of Japan (BOJ) Gov Kuroda to give a briefing at 06:30GMT (2:30EST)
- (JP) Tokyo reported to raise coronavirus alert to highest level – Japan Press
- (JP) Tokyo finds a 48 coronavirus case cluster at a Movie Theater
- (JP) Japan Econ Min Nishimura: Current amount of coronavirus infections is ‘not yet’ large; Doing utmost to avoid declaring state of emergency
- (JP) Japan to consider central bank digital currency (CBDC) in cooperation with other countries – Japanese press
Korea
- Kospi opened +1.2%
- *(KR) SOUTH KOREA JUN UNEMPLOYMENT RATE: 4.3% V 4.5%E (Down from 10 year high)
- (KR) Bank of Korea (BOK) reports Board Member Cho has sold certain stock assets; Will attend Jul 16th rate decision meeting
Other Asia
- (ID) Indonesia Jun Trade Balance: $1.27B v $1.2Be; Exports Y/Y: +2.3% v -12.6%e
North America
- Moderna [MRNA]: NEJM reports trial data shows mRNA-1273 COVID-19 vaccine has produced antibodies in all patients tested during initial Phase 1 study – press
- New York Times [NYT]: Reported to move part of Hong Kong office to South Korea – US financial press [follows recent passage of the new national security law related to HK]
- (US) US regulator reported to be investigating certain oil fund disclosures – financial press
- (US) Fed’s Brainard (voter, dove): monetary policy will need to shift to provide more stimulus rather than focus on stabilization (July 14th)
- (US) Fed’s Kaplan (dove, voter): seeing pronounced slowing again since mid-June; prefers health care protocols over the Fed doing more; hopeful Fed will let some programs ease
- (US) Fed’s Harker (hawk, voter in 2020): we are in a downturn that is both exceptionally painful and stubbornly long lasting; pandemic impact on economy is not a brief setback (July 14th)
Europe
- OPEC+ committee reportedly outlining a plan for 842K bpd in extra compensation cuts for Aug-Sep timeframe – press
Levels as of 1:20 ET
- Nikkei 225, +1.5%, ASX 200 +1.8% , Hang Seng -0.2%; Shanghai Composite -0.9% ; Kospi +0.8%
- Equity S&P500 Futures: +0.8%; Nasdaq100 +0.4%, Dax +0.8%; FTSE100 +1%
- EUR 1.1423-1.1393 ; JPY 107.31-107.19 ; AUD 0.7019-0.6969 ;NZD 0.6564-0.6530
- Gold -0.2% at $1,809/oz; Crude Oil +0.5% at $40.48/brl; Copper -0.1% at $2.9352/lb
