General Trend:
- Shanghai Composite declined less than 0.2% during morning session; Consumer Discretionary index drops amid weaker retail sales
- Financials trade mixed in HK
- Sportswear co. Li Ning rises over 10% in HK post earnings
- Gainers in Australia include Consumer Discretionary and Resources firms
- Decliners in Japan include Real Estate firms and banks, Insurers rise
- Kospi underperforms amid the rise in coronavirus cases
- US Jul Retail Sales due later today
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (AU) Reserve Bank of Australia (RBA) Gov Lowe: Has not ruled out negative interest rates (Says they are extraordinarily unlikely); Victoria outbreak to reduce Q3 GDP By at least 2ppts; Growth not expected until Dec due to coronavirus outbreak; Have not ruled out separate bond buying program or other adjustments to mid-March package; Hopes cash rate will not be this low for 5 years, but it is possible; Not sure how much traction out of extending YCC out of the curve; Risks around Australia dollar ‘balanced’ – Semi Annual Testimony
- (AU) RBA Assist Gov Ellis: Downside scenario based on 10-week lockdown in Victoria
- (AU) Australia sells A$2.0B v A$2.0B indicated in 2.75% Nov 2028 bonds, avg yield 0.8098% v 0.7959% prior, bid to cover 4.4x v 3.6x prior
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$185M v NZ$211M prior in government bonds as part of QE v NZ$190M sought (2nd day in a row not buying full amount sought)
- (NZ) New Zealand Confirms 12 additional coronavirus cases, 2 outside of Auckland (Confirms earlier report)
- (NZ) New Zealand July Manufacturing PMI: 58.8 v 56.2 prior
- (NZ) New Zealand Treasury July Activity gauge Y/Y: +2.0%
China/Hong Kong
- Hang Seng opened -0.6%, Shanghai Composite -0.2%
- (CN) China NBS comments after Jul data: China will strive to reach economic and social developments this year, China economy recovered steadily in July
- (CN) CHINA JULY INDUSTRIAL PRODUCTION Y/Y: 4.8% V 5.2%E; YTD Y/Y: -0.4% V -0.4%E
- (CN) CHINA JULY RETAIL SALES Y/Y: -1.1% V 0.1%E; YTD Y/Y: -9.9% V -9.8%E
- (CN) CHINA JULY FIXED ASSETS INVESTMENT (EX-RURAL) YTD Y/Y: -1.6% V -1.6%E
- (US) Pres Trump: My attitude towards China is not friendly after virus; China is giving US farmers the largest orders ever seen; Won’t be engaging on the next trade call with China about TikTok or WeChat; US has set a deadline
- (US) White House Adviser Kudlow: Continue to engage China in the Phase 1 trade deal; US and China trade principals have a call coming up; White House continues to review WeChat
- (CN) PBOC TO CONDUCT MLF ON AUGUST 17TH (Monday), CNY400B IN MLF FUNDS ARE SET TO EXPIRE AUGUST 17TH, ADDITIONAL CNY150B TO EXPIRE AUG 26TH
- (CN) China 1st-week of Aug Retail Car Sales at 29.8K, +3% y/y – PCA
- (CN) China PBOC sets Yuan reference rate: 6.9405 v 6.9429 prior (Strongest yuan fix since Mar 10th)
- (CN) China Commerce Ministry (MOFCOM) Official: China will use digital currency on a trial basis; Pilot program will cover areas near Beijing, Yangtze River delta and the greater bay area; Aims to promote services trade
- (CN) China PBoC Open Market Operation (OMO): Injects CNY150B in 7-day reverse repos v Injects CNY150B in 7-day reverse repos prior; Net Injection CNY140B v Net injection CNY150B prior
- (CN) China PBoC Open Market Operation (OMO) Net Injection total CNY490B v Net drain total CNY270B for the week prior
Japan
- Nikkei 225 opened +0.3%
- (JP) Japan LDP Tax Chief Amari: Reiterates opposes cutting sales tax, Japan must consider a tax scheme which encourages firms to boost their cyber security – Nikkei
- (JP) Japan Jun Tertiary Industry Index M/M: 7.9% v 6.4%e
Korea
- Kospi opened -0.4%
- (KR) South Korea confirms 103 additional coronavirus cases, total cases 14,873 (Most new virus cases since end of March)
- (KR) Reported that North Korea replaced its premier – KCNA
- (KR) North Korea Leader Kim: Virus Protection has been managed stably, Asks officials to not allow external flood support
- (KR) South Korea Jul Export Price Index m/m: -0.4% v 0.3% prior; y/y: -5.8% v -6.0% prior
- (KR) South Korea sells 50-year bonds avg yield 1.610% v 1.570% prior
Other Asia
- (MY) Malaysia Q2 GDP Q/Q: -16.5% v -11.4%e; Y/Y: -17.1% v -10.9%e (Confirms technical recession, Largest decline on record)
North America
- (US) TREASURY $26B 30-YEAR BOND AUCTION DRAWS 1.406%; BID TO COVER 2.14 V 2.30 PRIOR AND 2.30 OVER LAST 4 AUCTIONS (from Aug 13th)
Levels as of 1:20 ET
- Nikkei 225, flat, ASX 200 +0.5% , Hang Seng flat; Shanghai Composite +0.3% ; Kospi -1.3%
- Equity S&P500 Futures: +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 flat
- EUR 1.1820-1.1801 ; JPY 107.04-106.84 ; AUD 0.7155-0.7131 ;NZD 0.6555-0.6526
- Gold -0.4% at $1,962/oz; Crude Oil +0.3% at $42.37/brl; Copper +0.9% at $2.8213/lb
