General Trend:
- Asian travel-sensitive stocks trade generally higher amid some focus in the press on COVID-19 treatment hopes
- Japanese markets trade broadly higher; Air Transportation index outperforms after gains in the US
- Financials outperform in Australia amid rise in 10-yr bond yields; Consumer Staples and Resource firms decline
- Tech and Property firms decline in HK; Gaming sector trades higher
- Shanghai Composite declined by 0.2% during morning session
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.2%
- Qantas [QAN.AU]: Announces possible job cuts of up to 2,500 in addition to the already announced 6K job cuts; relates to plans to outsource certain operations
- (AU) Australia total payroll jobs change between July 25th and Aug 8th: -0.8%; weekly total wages -0.6%
- (AU) Australia Prelim Jul Merchandise Exports M/M: -6.0%; Imports 11.0%
- (AU) Australia debt agency (AOFM): Launches new 1.0% 2031 bond syndicate (as expected), the issuance will be of a benchmark size; initial pricing guidance is 8-11bps/primary 10-year Treasury Bond futures contract
- (AU) Australia Nov 2031 Syndicated bond sale bids reported to be higher than A$44B
- (AU) Victoria state (Australia) reports 148 additional coronavirus cases; 8 additional deaths
- (NZ) New Zealand Debt Management Office (DMO) sells NZ$4.0B in 4.50% Apr 2027 bonds via Syndicate, avg yield 0.325%, Bid to cover > 4.38x; Total book size >NZ$17.5B
China/Hong Kong
- Hang Seng opened +0.1%, Shanghai Composite +0.2%
- Mengniu Dairy [2319.HK]: Announces termination of proposed acquisition of Lion Dairy and Drinks in Australia; Australia FIRB was not likely to approve the transaction
- (US) USTR Statement: US Trade Official Lighthizer and Treasury Sec Mnuchin spoke with China Vice Premier Liu He on implementation of Phase 1 Trade Deal
- (CN) China PBoC Open Market Operation (OMO): Injects CNY300B in 7-day and 14-day reverse repos v Injects CNY160B in 7-day reverse repos and 14-day reverse repos prior; Net injection CNY200B v Net Injection CNY110B prior
- (CN) PBoC Official: China Monetary policy direction will not change; Determined to maintain normal monetary policy; Flexible and appropriate monetary policy will not change
- (CN) PBoC Deputy Gov Liu Guoqiang: Will improve policy rate system based on OMO and MLF rates; Will push market rates to move around OMO and MLF rates
- (CN) PBoC Vice Gov Liu: There is no Need to lower regulator requirement on bank Capital Adequacy ratio; domestic banking sector’s Q2 capital adequacy ratio ~14.2% – Chinese State Media
- (CN) China PBOC sets Yuan reference rate: 6.9183 v 6.9194 prior
- (HK) Hong Kong Chief Exec Lam: To announce social distancing arrangements later today (August 25th)
- (CN) PBOC Official Sun Guofeng: Still running internal tests of Digital currency, no official launch schedule
- (CN) China lending rate for companies may continue declines – China Securities Journal
Japan
- Nikkei225 opened +1.1%
- (JP) Japan Fin Min Aso: Japan Equity, Tax Rev, and GDP have all ‘clearly risen’ during Abe administration; Clear PM Abe should rest if needed
- (JP) Japan MOF sells ¥1.2T v ¥1.2T indicated in 0.40% 20-year JGBs; avg yield 0.4030% v 0.4160% prior, bid to cover 3.9x v 3.8x prior
Korea
- Kospi opened +1%
- (KR) South Korea confirms 280 additional coronavirus cases v 266 prior
- (KR) South Korea President Moon: Prolonged Level 2 social distancing measures will add a burden to domestic economy; Worried that consumption and demand may contract again
- (KR) South Korea Aug Consumer Confidence: 88.2 v 84.2 prior
- (KR) South Korea Vice Fin Min Kim: Market Volatility has been expanding recently
Other Asia
- (IN) Reserve Bank of India (RBI) Announces special open market operations (OMO) equal to INR200B (two INR100B operations) to be conducted on Aug 27th and Sept 3rd
- Taiwan Semi: Announces plans to open new R&D center in Taiwan in 2021, the facility will focus on ‘future technology’ (including research on 2nm chips); To operate new ‘advanced’ production line
Levels as of 1:20 ET
- Nikkei 225, +1.7%, ASX 200 +0.2% , Hang Seng -0.5%; Shanghai Composite -0.3% ; Kospi +1.4%
- Equity S&P500 Futures: +0.5%; Nasdaq100 +0.3%, Dax +0.7%; FTSE100 +0.3%
- EUR 1.1814-1.1784 ; JPY 106.05-105.87 ; AUD 0.7182-0.7154 ;NZD 0.6546-0.6514
- Gold flat at $1,939/oz; Crude Oil -0.2% at $42.54/brl; Copper -0.1% at $2.9202/lb
