PBOC Weakened The Yuan, Australia Deficit Below Market Ests

Jul 23 20, 06:23 GMT

General Trend:

Shanghai Composite dropped by over 2% during morning session; IT firms dropped by over 2%, financials also traded lower
Shanghai Property index declines by over 2% amid report that Nanjing will tighten certain property-related measures
Hang Seng traded generally flat during morning session; Financials were flat, while tech firms moved generally higher
AAC Technologies (Apple supplier) rises over 11% in HK on strategic investment agreement
Gainers in Australia include Consumer Discretionary and Energy cos.; Consumer Staples, Resource and Financial firms decline
Hynix reverses opening gain amid guidance, sees DRAM price ‘adjustment’
China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thursday
Companies due to report during the NY morning include American Airlines, AutoNation, The Blackstone Group, Citrix Systems, Dow Chemical, Freeport McMoran, W.W Grainger, Hershey, Kimberly-Clark, Southwest Airlines, Nucor, PulteGroup, AT&T, Travelers, Twitter, Union Pacific

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
(AU) AUSTRALIA TREASURER FRYDENBERG: FORECASTS FY19/20 BUDGET DEFICIT OF A$85.8B; FY20/21 BUDGET DEFICIT OF A$184.5B [below expectations for above A$200B deficit] – PRE BUDGET STATEMENT
(AU) Australia Fin Min Cormann: Cautions against using taxpayer funded economic support for too long
(AU) S&P Says Australia AAA sovereign rating can absorb growing deficit, reiterates sovereign rating remains tilted toward downside
(AU) Moody’s: Australia AAA sovereign rating will remain resilient, fiscal repair to start in 2021
(AU) Australia Q2 NAB Business Confidence: -15 v -12 prior
(AU) Victoria state reports 403 additional coronavirus cases v 484 prior
(AU) New South Wales (NSW) State reports 19 additional coronavirus cases v 16 prior
(NZ) New Zealand Debt Management Office (DMO) sells NZ$950M v NZ$950M indicated in 2023, 2029 and 2033 bonds

China/Hong Kong

Hang Seng opened +0.7%, Shanghai Composite -0.8%
CanSino [6185.HK] To issue 24.8M A-shares on the China STAR board in Shanghai: to make further announcement once the final offering size and issue price are determined
(CN) China PBoC said to pause further monetary policy easing – press (July 22nd)
(US) China moving to close US consulate in Chengdu – Press
(CN) China govt said to consider closing of the US consulate in Wuhan as a retaliatory response – financial press (from July 22nd)
(CN) China PBOC sets Yuan reference rate: 6.9921 v 6.9718 prior, (largest percentage weakening of CNY since June 29th)
(CN) Nanjing City, China says it will tighten its land market control and improve restrictions on home purchases – Press
(CN) China Industry Ministry (MIIT) Vice Min Xin : Coronavirus impact on China Economy is controllable; Activity in industrial economy has recovered to ‘normal track’
(CN) China PBoC Open Market Operation (OMO): Injects CNY50B in reverse repos v Skips prior; Net Drain CNY0B v Net drain CNY0B prior
(CN) China Finance Ministry (MOF): Sells 1-month deposits: avg yield 2.7%
(CN) China Finance Ministry (MOF) Sells CNY5B in 2-year and 5-year bonds in Hong Kong

Japan

Nikkei 225 closed for holiday
(JP) Tokyo reported to find >300 coronavirus cases – Press
(JP) Japan Cabinet Office (Govt) Monthly Economic Report for July: Raises Overall economic assessment: Sees economy showing signs of picking up but remains in a severe situation (2nd straight upgrade, as expected) [July 22nd]

Korea

Kospi opened flat
(KR) SOUTH KOREA Q2 PRELIMINARY GDP Q/Q: -3.3% V -2.4%E (LARGEST CONTRACTION SINCE 1997 Debt Crisis); Y/Y: -2.9% V -2.0%E (Enters technical recession for the first time since 2003)
Hynix [000660.KR]: Reports Q2 (KRW) Net 1.26T v 535.5B y/y; Op 1.95T v 637.6B y/y (1.67Te); Rev 8.61T v 6.45T y/y (8.17Te); guides Q3 DRAM shipments flat q/q, NAND shipments up in high single digit range q/q
Hyundai Motor: [005380.KR] Reports Q2 (KRW) Net 227B v 999B y/y; Op 590B v 1.24T y/y; Rev 21.9T v 27.0T y/y

Other Asia

(SG) Singapore Jun CPI M/M: 0.0% v 0.0%e; Y/Y: -0.5% v -0.5%e
(TH) Thailand Central Bank Assist Gov said baht (THB) intervention ‘not for trade benefit’ – press
(TW) Taiwan Govt will approve a NT$210B special budget

North America

(US) Pres Trump: Possible to close more diplomatic sites
(US) Sen Shelby (R-AL): Senate has tentative deal on Stimulus; Will finish appropriations part of Bill on Thurs (Jul 23rd)
(US) US Treasury Sec Mnuchin says in ‘good shape’ on the Republican stimulus talks
Airbnb: Said to have been approached about merger with blank check co., such a merger would enable the co. to conduct an IPO – financial press

Europe

Levels as of 1:20 ET

Nikkei 225, closed, ASX 200 +0.3% , Hang Seng +0.5%; Shanghai Composite -0.9% ; Kospi -0.5%
Equity S&P500 Futures: +0.1%; Nasdaq100 +0.3%, Dax flat; FTSE100 +0.1%
EUR 1.1583-1.1564 ; JPY 107.19-107.10 ; AUD 0.7154-0.7132 ;NZD 0.6680-0.6650
Gold +0.2% at $1,868/oz; Crude Oil +0.1% at $42.03/brl; Copper -0.4% at $2.9135/lb