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Asian Indices Trade Mixed, Precious Metals Rise As USD Index FUTs Extend Losses

General Trend:

  • Japan equity markets opened lower after 2-day holiday; Decliners include Transports, Iron/Steel firms and Brokers ; Insurers outperform
  • Shanghai Composite trades flat during morning session after dropping over 3.8% on Friday, Kweichow Moutai rises over 1%
  • Shanghai property and financial firms trade lower
  • Financials trade mixed in HK, property index and gaming firms decline; HK confirms new measures to deal with coronavirus
  • Gainers in Australia include gold miners, financials lag
  • Lynas Corp (Aussie rare earths miner) rises over 10%, signed contract with US DoD related to US separation facility
  • Qantas sees less of its pilots return amid recent lockdown measures in Melbourne
  • Australia’s Perpetual acquires stake in US-based asset manager
  • TAIEX rises by over 2.5%; Taiwan Semi rises over 9.5% [in line with Friday’s move in the co’s ADRs]
  • US closed consulate office in Chengdu, China closed its consulate office in Houston; Some now wonder what happens next?
  • Some press focus on US Treasury Dept.’s currency report
  • Australia APRA (regulator) is expected to update its capital management guidance for banks this week

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened flat
  • (AU) Reserve Bank of Australia (RBA) Assist Gov Kent: New policy measures are not under consideration
  • (AU) Australia launches 2051 bond syndicate (as expected): Coupon 1.75%; pricing guidance is 98-105bps/Australia 10 year Treasury FUTs
  • (AU) Reserve Bank of Australia (RBA) adds A$1.08B to the banking system v A$2.98B prior; Excess cash at exchange settlement (ES) accounts at A$42.4B v A$50.9B prior
  • (AU) Victoria state reports 532 coronavirus cases (record high) v 357 prior; 6 additional coronavirus deaths

China/Hong Kong

  • Hang Seng opened +0.8%, Shanghai Composite +0.4%
  • (HK) US Currency report may target China and Hong Kong – Financial press headline [Note: The source of the comment is not immediately clear]
  • (CN) China PBOC sets Yuan reference rate: 7.0029 v 6.9938 prior
  • (CN) US closes consulate in Chengdu, Flag reported as being lowered – Press [in line order from China]
  • (HK) Hong Kong EXCO confirms plan to ban all dine-in restaurant service, and to require all residents to wear a mask at all times while outside beginning Wed (July 29th)
  • (CN) China National Health Commission Coronavirus Update for July 26th: 61 additional cases v 46 prior; Additional deaths: 0 v 0 prior; Xinjiang reports 41 additional coronavirus cases
  • (CN) China approves an additional import quota amount of 10.1Kt of copper scrap metal
  • (CN) China Jun Industrial Profits Y/Y: 11.5% v 6.0% prior
  • (CN) Shanghai Exchange Margin Balance -1.0% v +0.6% prior
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v Skips repos prior; Net injection CNY0B v Net drain CNY200B prior

Japan

  • Nikkei opened -1.1% [returned from 2-day holiday]
  • *(JP) JAPAN Q1 FINAL CAPITAL SPENDING (CAPEX) Y/Y: 0.1% V 4.3% Prelim ; CAPITAL SPENDING EX-SOFTWARE: -1.4% V +3.5% Prelim [downward revision]
  • (JP) Bank of Japan (BOJ) Summary of Opinions for July 14-15th policy meeting: Need to watch policy impacts for time being
  • (JP) Tokyo Gov Koike: Tokyo did not find ‘many’ new coronavirus cases today
  • (JP) Japan reported to have asked its companies to adopt a 70% work from home rate – Press
  • (JP) Japan to create ‘framework’ to support shipbuilding cos. – Japanese press
  • (JP) Japan Chief Cabinet Sec Suga: Reiterates Japan coronavirus situation does not need an emergency declaration
  • (JP) Japan May All Industry Activity Index M/M: -3.5% v -3.5%e
  • (JP) Japan May Final Leading Index CI: 78.4 v 79.3 prelim; Coincident Index: 73.4 v 74.6 prelim

Korea

  • Kospi opened +0.1%

Other Asia

  • Taiwan Semi [2330.TW] : Receives order from Intel for 180K units of 6nm chips; AMD also increased its 7nm order with TSMC to 200K units – Taiwanese press
  • Taiwan Semi [2330.TW]: Apple sets up R&D area for Display tech at Taiwan Semi plant [Longtan plant] – Press
  • (VN) Vietnam PM: To order tougher social distancing measures in Da Nang

North America

  • Moderna [MRNA]: Expands BARDA Agreement to support larger Phase 3 Program for Vaccine (mRNA-1273) against COVID-19 with July 27 start date

Europe

  • SAP [SAP.DE]: To spin off Qualtrics through US IPO, to retain majority ownership of the unit; transaction is not expected to have an impact on 2020 or longer-term financial targets
  • (UK) Chancellor of the Exchequer Sunak (Fin Min): Reported to be considering an online sales tax – press

Levels as of 1:20 ET

  • Nikkei 225, -0.2%, ASX 200 +0.2% , Hang Seng -0.3%; Shanghai Composite -0.1% ; Kospi +0.7%
  • Equity S&P500 Futures: +0.5%; Nasdaq100 +0.6%, Dax +0.3%; FTSE100 +0.4%
  • EUR 1.1724-1.1642 ; JPY 106.13-105.45 ; AUD 0.7196-0.7087 ;NZD 0.6682-0.6626
  • Gold +1.6% at $1,927/oz; Crude Oil -0.1% at $41.27/brl; Copper +0.4% at $2.9072/lb
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