General Trend
- Baby-related stocks in Australia/NZ move higher after China news.
- Nikkei moved lower after the higher open [Big component Softbank Group drops over 1%; Topix Iron & Steel index drops over 1%].
- Hang Seng has moved higher [TECH index rises over 1.5%; Miners and Financials trade generally lower; Airlines drop amid new virus cases in Guangdong].
- Shanghai Composite ended the morning session near the opening level (-0.2%) [Financials declined amid news related to Huarong].
- S&P ASX 200 opened flat then declined [Financials dropped ahead of RBA decision; Resources index gained as China ore prices rose; Energy index tracked rise in oil prices].
- Australia Q1 GDP data are due on Wed (June 2nd).
- RBA Dep Gov Debelle is due to appear before Senate Economics Legislation Committee on Wed (Jun 2nd).
- Companies due to report during the NY morning include Kirkland’s, LightInTheBox.
Headlines/Economic Data
Australia/New Zealand.
- ASX 200 opened 0.0%.
- (AU) AUSTRALIA Q1 CORP OP PROFIT Q/Q: -0.3% V 3.4%E; INVENTORIES Q/Q: 2.1% V 0.2%E.
- (AU) Australia May Final PMI Manufacturing: 60.4 v 59.9 prelim (record high, 12th consecutive monthly expansion).
- (AU) Australia May TD Inflation Gauge M/M: -0.2% v +0.4% prior.
- (AU) AUSTRALIA APR BUILDING APPROVALS M/M: -8.6% V -10.0%E; Private Sector Houses Approvals M/M: 4.6% v 2.0% prior.
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%; AS EXPECTED.
Japan
- Nikkei 225 opened +0.5%.
- (JP) JAPAN Q1 CAPITAL SPENDING (CAPEX) Y/Y: -7.8% V -6.8%E; CAPITAL SPENDING EX-SOFTWARE: -9.9% V -7.6%E, Company profits: +26.0% v -0.7% prior.
- (JP) Certain Japan Olympics Panel members said to have warned against holding the Tokyo Olympics.
- (JP) Japan May Final PMI Manufacturing: 53.0 v 52.5 prelim (Confirms 4th month of expansion).
Korea
- Kospi opened +0.1%.
- (KR) South Korea May Trade Balance: $2.9B v $3.8Be; Exports Y/Y: 45.6% v 48.9%e (largest gain since 1988).
- (KR) South Korean steelmakers have raised automotive steel prices for the first time in 4-years by KRW50K ($45)/ton – Yonhap.
- (KR) South Korea Vice Fin Min Lee: Inflation may increase temporarily above 2% in Q2; Chances of inflation Y/Y >2.0% is limited.
- (KR) South Korea May PMI Manufacturing: 53.7 v 54.6 prior (lowest since Jan 2021).
China/Hong Kong
- Hang Seng opened 0.0%; Shanghai Composite opened -0.2%.
- (CN) CHINA MAY CAIXIN PMI MANUFACTURING: 52.0 V 52.0E (13TH MONTH OF EXPANSION, highest since Dec).
- (CN) China PBOC raised Forex Reserve Requirement for financial institutions by 200 bps to 7.0%; effective June 15th – press (yesterday after the close).
- (CN) China Politburo to hold a major meeting on optimizing policies and how to deal with an aging population; China to allow three children per couple – Xinhua.
- (CN) Former head of China Digital Yuan project Yao Qian said central bank digital currencies (CBDCs) could use blockchain networks like Ethereum – Press.
- (CN) China Environmental Authority in Tangshan said to be relaxing steel output restrictions – Caixin.
- (CN) China PBOC sets Yuan reference rate: 6.3572 v 6.3682 prior (Strongest since May 15, 2018).
- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net CNY0B prior.
- (CN) Former China SAFE official Guan Tao said a move by PBOC to raise the FX reserve requirement shows the central bank will not allow the yuan to appreciate ‘too fast’ – US financial press.
- (CN) China said to consider a new holding company for Huarong and bad debt managers. modeled after one that currently holds state-owned banks’ bad debt – press.
- (CN) Xinhua posted an online survey on Weibo asking if readers were ready for a 3rd child (after Govt announcement yesterday) within 30 minutes, more than 30K has responded, of that 90% said “absolutely not considering”; was quietly removed.
- (HK) Macau May Casino Rev (MOP): 10.4B v 8.4B prior; Y/Y: 492.2% v 467%e.
Other
- OPEC+ technical meeting (JMMC) said to maintain its 2021 global growth forecast at 6.0M bpd – press.
North America
- Reminder US markets closed for the holiday.
- (US) US regulators reportedly signal a bigger role in cryptocurrency market – FT.
- (JP) US Treasury Sec Yellen to meet with Japan Fin Min Aso on June 4.
Europe
- G7 Draft Communique: Central bank digital currencies could act as liquid safe settlement asset and anchor for payment system; affirm exchange rate commitments from May 2017; To keep supporting their economies as they emerge from the pandemic and to reach an “ambitious” deal on a minimum global corporate tax in July.
- (NL) ECB’s Knot (Netherlands): shrinking the ECB balance sheet will be a lengthy process, see no signs rising inflation rates will be permanent.
- (EU) According to an ECB study of central bank strategies across 20 economies showed when targeting inflation there is better success if a range is used rather than a specific target.
- (FR) France May New Car Registrations: 141.0K, 46.5% y/y, -27.3% from 2019 – CCFA.
- (IE) Ireland May PMI Manufacturing: 64.1 v 60.8 prior (record high).
- (CH) Swiss National Bank (SNB) Vice Chairman Zurbruegg: Reiterates FX stance that it welcomes recent weakness in CHF, but CHF still highly valued.
Levels as of 01:15ET
- Hang Seng +0.6%; Shanghai Composite -0.1%; Kospi +0.6%; Nikkei225 -0.2%; ASX 200 -0.1%.
- Equity Futures: S&P500 +0.0%; Nasdaq100 +0.1%, Dax +0.3%; FTSE100 -0.5%.
- EUR 1.2237-1.2222; JPY 109.61-109.34; AUD 0.7769-0.7732; NZD 0.7289-0.7263.
- Commodity Futures: Gold +0.4% at $1,913/oz; Crude Oil +1.9% at $67.59/brl; Copper +0.4% at $4.68/lb.
