General Trend
- Decliners in Hong Kong include Telecom, Energy, Property, Financial and Gaming firms
- China Communications Construction [1800.HK] declines by over 4%, said to have been added to the US Commerce Dept’s entity list
- HSBC declined after recent comments from the US Sec of State
- Xiaomi rises over 9% after reporting Q2 results
- Australian equities outperform, Victoria reported the lowest number of daily coronavirus cases in almost 2 months; Consumer Staples index rises after financial results from Woolworths; Energy and financial firms lag
- Japanese equity markets trade broadly lower; Topix Insurance, Real Estate and Bank indices decline by over 1%
- Shanghai Composite rose by less than 0.5% during morning session; IT and Consumer shares rose, Financials lagged ahead of upcoming bank earnings
- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thursday
Headlines/Economic Data
Australia/New Zealand
- ASX200 opened +0.1%
- (AU) Reserve Bank of Australia (RBA) offers to buy A$2.0B in 2023 and 2024 bonds v skips prior
- (AU) AUSTRALIA Q2 PRIVATE CAPITAL EXPENDITURE Q/Q: -5.9% V -8.2%E; 2020-21 Capex estimate A$98.6B
- (AU) Victoria state (Australia) reports 113 additional coronavirus cases (lowest figure in ~ 2 months) v 149 prior; 23 additional deaths
- (AU) Australia PM Morrison favors federal veto powers over the Belt and Road agreements of local states – SCMP
- (NZ) New Zealand confirms 6 additional coronavirus cases v 3 prior
- (NZ) New Zealand Exchange: has decided to suspend trading through the end of the day; doing everything possible to open market tomorrow (Aug 28th), working with cyber-security experts
China/Hong Kong
- Hang Seng opened -0.1%, Shanghai Composite +0.1%
- (CN) China July Industrial Profits Y/Y: 19.6% v 11.5% prior
- (CN) China PBOC sets Yuan reference rate: 6.8903 v 6.9079 prior ( Strongest fix since Jan 22nd)
- (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v Injects CNY200B in 7-day prior; Net drain CNY60B v Net Injection CNY50B prior
- (CN) PBOC to conduct CNY5.0B central bank bill swap (CBS) operation today
- (CN) US Commerce Dept adds 24 Chinese firms to entity list; accuses the companies of assisting to build military islands in the South China Sea; The companies are said to include China Communications Construction Company – press
- (CN) China govt could restrict drug exports to the US if the Trump administration was to cut China’s access to semiconductors – SCMP (from Aug 26th)
- (CN) China PBoC : Will facilitate Yuan Settlement in Trade and investments
- (CN) US: China is entitled to conduct exercises within laws; Ready to respond to threats in South China Sea
- Reportedly Kevin Mayer to step down as CEO of TikTok
Japan
- Nikkei 225 opened +0.1%
- (JP) Japan Chief Cabinet Sec Suga: Japan PM Abe press conference scheduled for August 28th is not fixed yet; Strongly opposes actions that raise tensions in the South China Sea
- (JP) Bank of Japan (BOJ) Official Suzuki: Need to watch for impacts of side effects; BoJ’s monetary policy framework is functioning, benefits of monetary easing are exceeding costs for now
- (UK) UK and Japan could agree on a free trade deal as soon as Aug 28th – Nikkei (from Aug 26th)
- (JP) Japan MOF sells ¥3.0T v ¥3.0T indicated in 0.1% 2-year JGBs: avg yield: -0.1150% v -0.1330% prior, bid to cover 4.66x v 4.56x prior
- (JP) Japan Jun All Industry Activity Index M/M: 6.1% v 6.3%e
Korea
- Kospi opened +0.1%
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 0.50%; AS EXPECTED; Cuts 2020 GDP from -0.2% to -1.3%; Decision to keep policy steady was unanimous; still have room for further action; to consider possible negative impacts from further rate cuts; not considering Yield curve control; Level 3 social distancing may impact financial markets; Chip and Auto Exports not fully coming back to life; will purchase Govt bonds in cases of increased volatility
- (KR) South Korea confirms 441 additional coronavirus cases v 320 prior (Highest daily case count since early March)
- (KR) South Korea Vice Fin Min Kim: South Korea may be able to manage coronavirus while maintaining level 2 social distancing
- (KR) South Korea Parliament to be temporarily closed due to infections Of coronavirus found In reporters for the Ruling Party – Yonhap
- (KR) Follow Up: South Korea reported to be announcing extension of short sale ban today – Local press
Levels as of 1:20 ET
- Nikkei 225, -0.5%, ASX 200 +0.2% , Hang Seng -0.8%; Shanghai Composite +0.3% ; Kospi -0.9%
- Equity S&P500 Futures: -0.2%; Nasdaq100 -0.3%, Dax -0.4%; FTSE100 flat
- EUR 1.1849-1.1824 ; JPY 106.07-105.80 ; AUD 0.7251-0.7227 ;NZD 0.6648-0.6608
- Gold -0.1% at $1,951/oz; Crude Oil flat at $43.38/brl; Copper -0.4% at $2.9642/lb
