RBA Continues Deliberations

Jun 17 21, 06:41 GMT

General Trend

Equity markets have generally pared declines.
Shanghai Composite ended the morning session modestly higher after the lower open [Consumer Staples, IT and Industrial indices rise; Financials lag].
Hang Seng has also risen after opening down [TECH index trades modestly higher].
Nikkei 225 has underperformed [Softbank Group and Topix Information and Communications index are among the decliners; Banks rise after gain in US Treasury yields].
S&P ASX 200 has moved off of the lows [Coles weighs on Consumer Staples index; Resources and Energy indices also drop; Financials supported by higher 10-yr bond yields].
China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thursday.
BOJ rate decision is due on Fri (Jun 18th).
About 12:30ET American Airlines, Southwest Airlines, United Airlines, E-Trade and Vanguard said to all be having problems with their websites, as well as HKEX in Hong Kong – DownDetector.
Companies due to report during the NY morning include Commercial Metals, Jabil, Kroger.

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened 0.0%.
(AU) AUSTRALIA MAY EMPLOYMENT CHANGE: +115.2K V +30.0KE; UNEMPLOYMENT RATE: 5.1% V 5.5%E (5.1% matches Feb 2020).
(AU) Reserve Bank of Australia (RBA) Gov Lowe: YCC to be decided by chance of rate rise in next 3 years, reviewing scenarios for YCC, premature to cease bond purchases – speech called “From Recovery to Expansion “.
(AU) Reserve Bank of Australia (RBA) Cancels bond operation today, cites tech difficulties.
(NZ) Reserve Bank of New Zealand (RBNZ) finalises bank capital rules, improves format of banking rules – Banking Prudential Requirements (BPR).
(NZ) NEW ZEALAND Q1 GDP Q/Q: 1.6% V 0.5%E; Y/Y: 2.4% V 0.9%E.
(AU) Australia Council of Financial Regulators (CFR) Quarterly Statement: Members discussed developments in household borrowing and the housing market.
SWM.AU Guides FY21 Underlying EBITDA A$250-255M; Trading conditions in Q4 positive; Seeeing strong reboud in Ad revs y/y.
WHC.AU Cuts FY21 guidance for Managed Rom Coal Production 20.4Mt (prior 20.6-21.4Mt).

Japan

Nikkei 225 opened -0.5%.
(JP) Japan planning to extend employment subsidy through August – Nikkei.
(JP) Members of an expert panel that advises Japan on virus measures, expected to say they see holding the Olympics without spectators as the least risky scenario in preventing the spread of the coronavirus – Japan press.
(JP) Japan Econ Min Nishimura: Confirms Japan to lift the state of emergency in Tokyo on June 20th (Sunday).
(JP) Japan PM Suga to hold press conference at 06:00EST (10:00GMT).
6502.JP Chairman Osamu Nagayama said he may resign once implementing reforms and appointing a new CEO to replace Satoshi Tsunakawa – press.
(JP) Former Bank of Japan (BOJ) Official Maeda: BOJ may start debating starting in 2023 on ways to phase out extraordinary stimulus (including raising rates to positive), may raise short term rate to 0.0-0.5%, but would be withdrawal of stimulus, not start of rate hike cycle.

Korea

Kospi opened -0.1%.
(KR) South Korea and US extending $60B currency swap until December 2021 – Press.
(KR) Bank of Korea (BOK) Senior Deputy Gov: US FOMC Decision was seen as more hawkish than market expected; Will monitor risk factors and take stabilization measures if needed.

China/Hong Kong

Hang Seng opened -0.7%; Shanghai Composite opened -0.3%.
00282.HK (HK) Hong Kong National Security Police arrest 5 Apple daily executives including including Next Digital CEO Cheung Kim-hung and Apple Daily Editor-in-Chief Ryan Law – local press.
(HK) Hong Kong Chief Exec Lam: HKEX has contributed significantly to Hong Kong’s status as a premier fund-raising center and an international financial capital – Xinhua.
(CN) CHINA MAY NEW HOMES PRICES M/M: 0.5% V 0.5% PRIOR; Y/Y: 4.9% V 4.8% PRIOR.
(CN) China PBOC sets Yuan reference rate: 6.4298 v 6.4078 prior (weakest setting since May 24th).
(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 drain CNY10B prior.
410.HK Confirms to be acquired by Blackstone for HK$5.00/shr valued at HK$23.7B.
Yesterday after the close:
(CN) CHINA MAY RETAIL SALES Y/Y: 12.4% V 14.0%E.
(CN) CHINA MAY INDUSTRIAL PRODUCTION Y/Y: 8.8% V 9.2%E.
(CN) CHINA MAY YTD PROPERTY INVESTMENT: 18.3% V 19.5%E.
(CN) CHINA MAY YTD FIXED URBAN ASSETS Y/Y: 15.4% V 17.0%E.
(CN) China May Surveyed Jobless Rate: 5.0% v 5.1%e.

Other

(SG) SINGAPORE MAY NON-OIL DOMESTIC EXPORTS M/M: -0.1% V +4.5%E; Y/Y: 8.8% V 16.0%E, Electronic Exports Y/Y: 11.0% v 10.9% prior.

North America

(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25% (AS EXPECTED); IOER RAISED TO 0.15% V 0.10%E; MOVES UP TIMETABLE FOR POTENTIAL HIKES TO 2023; FOMC PROJECTIONS SHOW TWO HIKES BY END OF 2023.
(US) Fed Chair Powell: Possibility inflation could turn out to be higher and more persistent than we expect; Bottleneck effects have been larger than anticipated – post rate decision press conference.
(CA) Bank of Canada (BOC) Gov Macklem: Economic recovery making big progress; Complete recovery will still take some time, 3rd wave of coronavirus is a setback.

Europe

(UK) Chancellor of the Exchequer Sunak (Fin Min): inflation expectations are quite well anchored, but inflation remains one of many risks, targeting to reduce deficit.
(CH) Switzerland SNB Financial Stability Report: Economic and financial conditions have improved but pandemic continues to weigh on economy.

Levels as of 01:15ET

Hang Seng -0.7%; Shanghai Composite -1.1%; Kospi -0.5%; Nikkei225 -0.5%; ASX 200 -0.3%.
Equity Futures: S&P500 -0.4%; Nasdaq100 -0.6%, Dax -0.3%; FTSE100 -0.3%.
EUR 1.1999-1.1987; JPY 110.81-110.61; AUD 0.7622-0.7607; NZD 0.7077-0.7051.
Commodity Futures: Gold -2.3% at $1,819/oz; Crude Oil -0.9% at $71.53/brl; Copper +0.5% at $4.29/lb.