US Equity FUTs Extend Losses After FOMC Minutes

Aug 20 20, 06:20 GMT

General Trend:

Chipmakers in South Korea and Taiwan trade sharply lower, DRAM firm Nanya drops over 6%, Samsung down over 3%; South Korea chip firms may cut DRAM-related CAPEX in 2020 (local press)
Australia’s energy index drops over 3.5% amid earnings from Santos and Origin Energy; Other decliners include Resource and Financial firms
Financials and Consumer firms drop in Shanghai amid speculation the PBOC will not further cut the RRR in 2020
Financial and property firms also drop in HK
Genting HK drops over 34%, to temporarily suspend all payments to creditors; HK Gaming sector trades generally lower
Alibaba declines ahead of earnings report
Decliners in Japan include Real Estate, Electric Appliance and Auto firms; Softbank drops after weakness on the Nasdaq
Hitachi Metals rises over 12% on M&A speculation
China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thursday

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
(AU) Former Reserve Bank of Australia (RBA) Official Edwards: Australia Economy is too fragile for drop in fiscal spending in 2021; Urges RBA to buy half of extra Govt debt in Australia
(AU) Reserve Bank of Australia (RBA) skips buying bonds v skips prior (3rd straight skip)
(NZ) Reserve Bank of New Zealand (RBNZ) Assistant Gov Hawkesby: we are preparing to use other monetary policy tools if needed; the size and composition of balance sheet will become a more active tool for monetary policy decisions; Implications of COVID are not over either globally or here in NZ; Since COVID, the settlement balances of the banking system have increased from NZ$8B to NZ$20-30B

China/Hong Kong

Hang Seng opened -0.5%, Shanghai Composite -0.7%
(CN) Likelihood for China PBOC to cut the RRR in 2020 has declined; expected to continue to inject liquidity by using reverse repos and MLF – China Securities Journal (CSJ)
(CN) CHINA PBOC LEAVES 1-YEAR AND 5-YEAR LOAN PRIME RATES (LPRS) UNCHANGED (AS EXPECTED) [rates left unchanged for 4th straight month]
(US) US and China officials reportedly plan to hold video conference in coming days to discuss progress fulfilling terms of ‘Phase 1’ trade agreement – press
(US) White House spokesperson McEnany: US and China trade reps continue to have conversations; does not have a date set for official US-China talks
(CN) China PBOC sets Yuan reference rate: 6.9274 v 6.9168 prior
(CN) China PBoC Open Market Operation (OMO): Injects CNY160B in 7-day reverse repos v Injects CNY150B in 7-day reverse repos prior; Net injection CNY10B v Net Injection CNY10B prior
(CN) China 2nd Week Aug Retail Car Sales 39.1K units +9% y/y (from Aug 19th)
(HK) US State Dept: notified Hong Kong that US suspended or terminated three bilateral agreements with Hong Kong
(CN) China to have a trial for direct trading services for Foreign investors in Interbank Bond Market, trial to begin on Sept 1st

Japan

Nikkei225 opened -0.5%
(JP) Japan MoF sells ¥2.5T v ¥2.5T indicated in 0.10% 5-year JGB: avg yield: -0.0930% v -0.103% prior, bid to cover 3.55x v 4.25x prior
(JP) Japan govt intends to cover compensation for any health problems that may arise from coronavirus vaccine in order to ensure stable supply from foreign manufacturers – Nikkei
(JP) Japan July Tokyo Condominiums for Sale Y/Y: +7.8% v -31.7% prior

Korea

Kospi opened -0.9%
(KR) South Korea confirms 288 additional coronavirus cases, 1 additional death
(KR) South Korea Vice Fin Min Kim: To decide this month on easing of financial rules; Economic uncertainty increases due to virus flare ups; Stronger social distancing measures could impact Korea economy
(KR) South Korea Vice Health Min: Not considering increasing social distancing measures to highest level
(KR) South Korea DRAM chip suppliers are expected to cut 2020 Capex, cites report from IC Insights – Yonhap
(KR) South Korea Q2 Short Term External Debt: $154.3B v $148.5B prior

North America

(US) FOMC JULY MINUTES: Pace of employment gains has likely slowed; Most members agree yield caps and targets would likely provide only modest benefits in current environment; banks could come under significant stress in a more adverse virus scenario (from Aug 19th)

Europe

Levels as of 1:20 ET

Nikkei 225, -1%, ASX 200 -0.8% , Hang Seng -2.2%; Shanghai Composite -1% ; Kospi -3.1%
Equity S&P500 Futures: -0.5%; Nasdaq100 -0.5%, Dax -0.8%; FTSE100 -1.2%
EUR 1.1853-1.1831 ; JPY 106.21-105.97 ; AUD 0.7194-0.7164 ;NZD 0.6572-0.6544
Gold -0.7% at $1,955/oz; Crude Oil -1% at $42.70/brl; Copper -0.5% at $2.9832/lb