General Trend:
- Shanghai Composite rose over 1.8% during morning session amid gains in Consumer-related cos.; Kweichow Moutai rose over 2.4%
- ASX 200 underperforms in Asia; Decliners include Resource, Consumer and Financial cos.
- Aussie consumer staples firm (Inghams Group) temporarily closes Victoria plant due to coronavirus; Victoria reports new record for new virus cases
- Retail and Real Estate firms lag in Japan, financials trade generally higher
- Tokyo Steel may report Q1 results (US financial press)
- Early gainers in HK included Energy and Financial firms, property and tech sectors lagged during early trading
- Hang Seng later reversed gain amid expected rise in new coronavirus cases
- Australia is due to issue economic and fiscal update on Thursday (July 23rd)
- Companies expected to report during the NY morning include Biogen, Nasdaq, Thermo Fisher
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.3%
- (AU) Australia Prudential Regulation Authority (APRA) Chairman Byres noted the degree of uncertainty about the local economy is now lower than when banks were asked to consider deferring dividend payouts in April; The regulator plans to update its capital management guidance for banks next week – financial press
- (AU) Australia Prelim Jun retail sales M/M: 2.4% v 16.3% prior; Y/Y 8.2% v 5.3%; stockpiling noted towards the end of June (especially in Victoria State)
- (AU) Australia May Westpac Leading Index M/M: 0.4% v 0.2% prior
- (AU) Victoria state reported 484 additional coronavirus cases v 374 prior (New record high)
- (AU) New South Wales State reports 16 additional coronavirus cases v 13 prior
- (AU) Australia sells A$2.0B v A$2.0B indicated in 2.75% Nov 2029 bonds, avg yield 0.8300% v 0.8691% prior, bid to cover 3.1x v 3.3x prior
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$320M v NZ$390M prior in government bonds as part of QE v NZ$320M sought
- (NZ) New Zealand Minister Lees-Galloway resigns – New Zealand Press
China/Hong Kong
- Hang Seng opened -0.2%, Shanghai Composite -0.2%
- (HK) Hong Kong coronavirus cases expected to exceed prior 108 total cases
- (US) China extends anti-dumping probe into certain US chemicals for an additional 6 months, probe relates to n-Propanol; cites the ‘complexity’ of the case – Press
- (CN) China has moved to overhaul supervision of insurance industry, to grant more power to local regulators – Chinese press
- (CN) China plans to sell wheat and rice amid higher corn prices – financial press
- (CN) China Solar Association: H1 Solar panel output 59GW, +15.7% y/y; H1 newly installed solar power capacity 11.5Gw, +0.9% y/y
- (CN) China PBOC sets Yuan reference rate: 6.9718 v 6.9862 prior, strongest fix since Mar 11th
- (CN) China PBoC Open Market Operation (OMO): skips reverse repos v Injects CNY10B via 7-day reverse repos prior; Net Drain CNY0B v Net drain CNY20B prior
- (HK) Hong Kong to extend mask requirement in public; HK Food & Health Sec Chan to hold briefing at 530 GMT – Press
Japan
- Nikkei 225 opened -0.4%
- (JP) JAPAN JULY PRELIMINARY PMI MANUFACTURING: 42.6 V 40.1 PRIOR (15 straight contractions); PMI Services: 45.2 v 45.0 prior (6th straight contraction)
Korea
- Kospi opened flat
- (KR) South Korea Govt releases tax revision plan; Scaled back earlier plan to impose capital gain taxes on stock investments; To impose taxes on crypto gains over KRW2.5M/yr
Other Asia
- (MY) Malaysia Jun CPI Y/Y: -1.9% v -1.8%e
- (TW) Taiwan Ministry of Foreign Affairs (MOFA): raises fears of being targeted by China following passage of Hong Kong Security Law, in talks with the US on security related issues
North America
- (US) Pres Trump: virus will probably get worse before it gets better; outbreak seems to be largely in the Sun Belt, but it could spread – coronavirus briefing
- (US) Treasury Sec Mnuchin: the goal is to have a stimulus deal by the end of next week; Will spend what we need on relief, no more than that
- (US) US Republicans consider offering 70% wage replacement for unemployment insurance in stimulus talks – Press
- (US) House Speaker Pelosi: Democrats want to see a Republican bill and then they’ll negotiate; $1T price tag on GOP aid bill won’t be sufficient to do what’s needed for economy and America’s health
- Boeing [BA]: Reported that 737 Max seems increasingly unlikely to carry passengers before 2021, public comments related to the safety fixes for the plane might make the timeline for approval longer – Press
- (US) SEMI: Forecasts 2020 global sales of semiconductor manufacturing equipment by original equipment manufacturers at $63.2B, +6% y/y; sees the 2021 figure at $70.0B, up ~11% y/y (record high)
Europe
- (UK) UK reportedly close to abandoning a post-Brexit trade deal with EU; govt assumption is UK will trade with EU on WTO terms after transition period ends on Dec 31st, though a ‘basic’ deal still remains possible if the EU gives ground – UK press
Levels as of 1:20 ET
- Nikkei 225, -0.6%, ASX 200 -1.4% , Hang Seng -0.2%; Shanghai Composite +1.3% ; Kospi flat
- Equity S&P500 Futures: flat; Nasdaq100 flat, Dax +0.2%; FTSE100 -0.3%
- EUR 1.1547-1.1525 ; JPY 106.89-106.71 ; AUD 0.7146-0.7121 ;NZD 0.6651-0.6633
- Gold +0.7% at $1,856/oz; Crude Oil -0.6% at $41.67/brl; Copper +0.4% at $2.9728/lb
