General trend
- Energy firms trade generally higher, OPEC remains in focus.
- US equity FUTs trade mixed ahead of data; 10-yr UST yield declines.
- Shanghai Composite opened lower and continued to drop during morning session [Healthcare, Financials and Consumer indices drop over 2%].
- Hang Seng opened slightly higher (+0.1%) following holiday, the index later dropped by over 1.5% [TECH index drops over 3%; Property and Financial firms also trade generally weaker].
- Nikkei has seen modest rise after opening flat; Fast Retailing to report Jun sales after the market close.
- S&P ASX 200 has gained during session [Energy index rises over 1.5%; Consumer Discretionary index also rises].
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened flat.
- (AU) Australia PM Morrison: Agreed to a new pathway out of coronavirus, plan will switch from virus suppression to the prevention of serious illness; To cut international arrival caps by 50%; caps on arrivals expected to last until 2022.
- (AU) Queensland Premier Palaszczuk: To remove lockdown for certain areas during July 2nd; Brisbane to remain in lockdown until at least July 3rd; Calls for 50% reduction in international arrivals.
- (AU) Australia Northern Territory Chief Min Gunner: To remove lockdown measures at 23:00EST.
- (AU) Australia May Home Loans Value M/M: 4.9% v 1.8%e; Investment lending M/M: 13.3% v 6.0%e.
- (AU) Australia AOFM (debt agency) issues Program Update: Has no new maturities planned for H1 in FY22; Planning Nov 2032 indexed bond sale via syndication.
- (AU) Australia sells A$1.0B v A$1.0B indicated in 0.25% Nov 2025 bonds, avg yield 0.6217% v 0.6191% prior , bid to cover 4.17x v 3.52x prior.
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$314.4B v A$316.5B prior.
- (NZ) Reserve Bank of New Zealand (RBNZ) offers to buy a total of NZ$200M in government bonds next week under QE program v NZ$200M prior.
- (NZ) ANZ Bank: Reserve Bank of New Zealand (RBNZ) may scale back QE/ end purchases as soon as August or September 2021.
- (NZ) New Zealand Jun ANZ Consumer Confidence Index: 114.1 v 114.0 prior; M/M: +0.1% v -1.2% prior.
- (NZ) New Zealand Stats Agency to include additional Australian airfare prices in Q2 CPI calculations.
- (NZ) New Zealand Tourism Association (TIA): To increase air tourism tax (BPL) to NZ$63 from NZ$20.11; effective Dec 1 2021.
China/Hong Kong
- Hang Seng opened +0.1%, Shanghai Composite -0.5%.
- (HK) Hang Seng Indices to announce Q2 review on Aug 20th.
- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net drain CNY20B v Net drain CNY20B prior.
- (CN) China PBOC sets Yuan reference rate: 6.4712 v 6.4709 prior.
Japan
- Nikkei 225 opened flat.
- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Cuts purchases of 1-3 year by ¥25B, and 10-25 year by ¥50B (as expected).
- (JP) Japan said to consider extending “quasi” state of emergency in Tokyo by 1-month – Press prior speculation 2-4 weeks).
- (JP) Japan Health Min: Government ‘not hesitant at all’ about extending emergency curbs in Tokyo but need to make sure they are effective.
- (JP) Japan Chief Cabinet Sec Kato: Govt will consider options for olympics including no spectators depending on decision on quasi state of emergency after Jul 11th (Sun).
- (JP) Japan May Monetary Base Y/Y: 19.1% v 22.4% prior.
Korea
- Kospi opened flat.
- (KR) SOUTH KOREA JUN CPI M/M: -0.1% V 0.0%E; Y/Y: 2.4% V 2.5%E [y/y above 2% target for 3rd straight month].
- (KR) South Korea Fin Min Hong and Bank of Korea (BOK) Gov Lee issue joint statement following meeting related to viewpoints on the policy mix for the economy: Monetary policy needs to help curb financial imbalance.
- (KR) Said that South Korea President Moon and North Korea Leader Kim have exchanged letters in May – Press.
- (KR) South Korea confirms 826 additional coronavirus cases, highest since Jan.
Other Asia
- (TW) Taipei (capital of Taiwan) has shut down a certain wholesale food market for 3 days (through Monday) due to coronavirus.
North America
- (US) Republican Senators said to have asked US Treasury for updated information on Debt limit.
- (US) US wins support from 130 countries, including all G20 members, for global minimum corporate tax rate; OECD says an agreement will be finalized in Oct – press.
- J&J [JNJ]: Announces positive New Data for Single-Shot COVID-19 Vaccine on Activity Against Delta Variant and Long-lasting Durability of Response.
Europe
- OPEC+ JMMC meeting makes no recommendations; Further consultation might be needed; Said to be considering extending talks by one day; UAE, Iraq and Kazakhstan have asked for a new cuts baseline in the OPEC+ deal – Energy Intel.
- Saudi Arabia and Russia said to have reached preliminary agreement on raising oil production; size seen under 500K bpd under Dec 2021 – press.
- (US) Treasury Sec Yellen to meet with Germany Fin Min Scholz on July 2nd (Friday).
Levels as of 01:20 ET
- Nikkei 225, +0.2%, ASX 200 +0.5% , Hang Seng -1.6%; Shanghai Composite -1.7% ; Kospi flat.
- Equity S&P500 Futures: flat; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 +0.3%.
- EUR 1.1852-1.1840 ; JPY 111.65-111.51 ; AUD 0.7476-0.7459 ;NZD 0.6981-0.6958.
- Gold +0.1% at $1,778/oz; Crude Oil -0.2% at $75.12/brl; Copper +0.1% at $4.2470/lb.
