General trend
- Asian indices are generally off of the best levels after the higher opens.
- US equity FUTs trade modestly lower after rise on Fri.
- Energy firms gain after recent rise in oil prices.
- Nikkei has pared gain after opening higher by ~1% [Topix Marine Transportation index outperforms; Iron & Steel index weighed down by broker comments; Banks index also drops; Toshiba rises on shareholder returns news].
- China May trade figures showed a slight decline in exports but imports came in a nearly a 10 year high.
- Hang Seng declined after the higher open [Gaming names decline after news related to Macau and Guangdong; TECH index trades modestly lower; WH Group rises over 7% on stock buyback].
- Shanghai Composite ended the morning session lower after the higher open [Financial and Consumer indices drop; IT index rises]; Property index drops amid news related to local gov’t land sale proceeds, Languang Development’s bonds remain in the news.
- S&P ASX 200 has moved modestly lower [AUSTRAC probe weighs on Financial and Consumer Discretionary indices; Tech index supported by M&A; Energy index also rises].
- WTI Crude briefly trades at $70/bbl (highest since late 2018).
- AOFM (Aussie debt agency) CEO due to speak on Tuesday (Jun 8th) at 3:30 GMT.
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened +0.1%.
- (AU) Australia May AIG Services Index: 61.2 v 61.0 prior (highest level in ~18 years).
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$235.8B v A$234.8B prior (fresh record high).
- (AU) S&P Affirms rating at AAA, revises outlook to Stable from Negative; Govt policy response and strong economic rebound have reduced downside risks to our economic and fiscal outlook for Australia.
Japan
- Nikkei 225 opened +1.0%.
- (JP) Japan Spring wage talks have resulted in avg pay increase of 1.82% according to Japan Business Federation, this is the first time below 2% since 2013.
- (JP) Japan May FX Reserves $1.39T v $1.38T prior.
- (JP) Japan Draft Economic Blueprint: Govt hopes to reach 2% price target with eye on economy, price, financial development; will pledge to take steps “without hesitation” to prevent the economy from slipping back into deflation.
- 6502.JP Announces ¥100B Share buyback (~6.0% of shares out); Guides FY21/22 Dividend at ¥190/shr.
- (JP) Japan Econ Min Nishimura: Govt must not hesitate in deploying fiscal stimulus, which must use targeted, effective measures, also must promote new areas of growth such as environment, digitization and make sure wages rise consistently.
Korea
- Kospi opened +0.1%.
- 005930.KR South Korea ruling Democratic Party leader Song Young-gil: Samsung needs the leader of the conglomerate in office, not in jail, in order for investments to be made (implies he could be released on parole) – Korean press.
China/Hong Kong
- Hang Seng opened +0.2%; Shanghai Composite opened +0.2%.
- (CN) CHINA MAY TRADE BALANCE: $45.5B V $50.8BE; Exports Y/Y: 27.9% v 32.1%e; Imports Y/Y: 51.1% v 53.5%e (highest since Mar 2010).
- (CN) CHINA MAY TRADE BALANCE (CNY): 296.0B V 276.0BE; Exports Y/Y: 18.1% v 19.5%e; Imports Y/Y: 39.5% v 44.2%e.
- (CN) In May foreign holdings of China bonds reached record CNY3.68T, due to stronger yuan – press.
- 288.HK Launches 1.92B share buyback program at HK$7.80/shr.
- (CN) China PBOC said assessment of commercial banks’ property-related loan exposures will include investments in RMBS – financial press.
- 1878.HK China imposes precautionary measures at Ceke port of Entry in inner Mongolia, measures may negatively impact sales.
- (CN) Manufacturers in Guangdong (China) expect H2 export orders to slow; notes factors including shipping delays caused by the recent COVID outbreaks in southern China (Yantian and Nansha ports) – SCMP.
- (CN) China SAFE official Xing Yujing: To use Digital CNY to test cross border program on capital account convertibility.
- (HK) Macau to disallow non residents to enter from Guangdong starting June 8th (due to COVID).
- (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) China PBOC sets Yuan reference rate: 6.3963 v 6.4072 prior.
- (HK) Hong Kong May IPO numbers fell to the lowest level since Feb 2020, 7 IPOs in Q2 to date and valuations are falling; attributed to China crackdown.
Other
- (TW) Taiwan to extend soft COVID restrictions for additional 2 weeks to June 28th.
North America
- (US) Treasury Sec Yellen: US President Biden’s $4.0T spending plan would be good for the US, even if it contributes to rising inflation and results in higher interest rates – tweet.
- (MX) Mexico mid-term election took place Sunday, elections for the entire lower house of Congress and ~50% of governors and most mayors; outcome will determine whether President Andrs Manuel Lpez Obrador’s Morena party gets the legislative majority it needs to continue with his 4th Transformation of Mexico.
- (CN) US Trade Rep Tai: US, China trade relationship is significantly imbalanced, Biden is committed to leveling the imbalance.
Europe
- (G7) G7 Fin Mins reach deal committing to a global minimum tax of at least 15% on a country by country basis.
- (FR) France Fin Min Le Maire: France’s economy will be back to pre-Covid levels by Q1 2022, reiterates 2021 GDP of 5%.
- (DE) Germany Saxony-Anhalt election exit polls have the CDU with 36% and AfD with 22.5%.
- (IT) Italy Public Admin Min Brunetta: Italy may receive €25B in July-Aug from EU pandemic recovery fund package – Italian press.
Levels as of 01:15ET
- Hang Seng -0.6%; Shanghai Composite -0.1%; Kospi +0.5%; Nikkei225 +0.3%; ASX 200 -0.2%.
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.3%; FTSE100 -0.1%.
- EUR 1.2173-1.2160; JPY 109.64-109.38 ;AUD 0.7749-0.7731; NZD 0.7216-0.7191.
- Commodity Futures: Gold -0.2% at $1,888/oz; Crude Oil -0.3% at $69.38/brl; Copper -0.4% at $4.49/lb.
