AUD/USD Trades Modestly Weaker

Jul 05 21, 06:36 GMT

General Trend

Quiet session for Crude Oil amid focus on OPEC+.
Chinese markets are mixed after underperformance on Fri.
PBOC continues to drain liquidity.
Hang Seng has pared the opening decline [TECH index declines over 1.5% on regulatory news related to Didi].
Shanghai Composite traded modestly higher during the morning session [IT index rose over 1%; Financials lagged].
Nikkei 225 has remained lower during the session [TOPIX Information & Communication index lags, Softbank Group tracks decline in HK-listed TECH names; Banks and Iron & Steel indices also drop; Transports rise].
S&P ASX 200 has moved higher after opening flat [Energy index outperforms; Financials decline ahead of RBA].
Australian M&A in focus ahead of RBA decision.
US starts an investigation into a large ransomware attack impacting 200+ companies, suspected to come from Russia.

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened 0.0%.
(AU) AUSTRALIA MAY BUILDING APPROVALS M/M: -7.1% V -5.0%E; Private Sector Houses Approvals M/M: -10.3% v 5.9% prior (biggest decline since 2000).
TAH.AU To demerge Lotteries business and Keno business at a A$225-275M separation cost, will create 2 listed ASX companies.
SYD.AU Receives unsolicited, nonbinding and conditional proposals valuing the company at A$8.25/shr in cash.
(AU) Australia Jun Final PMI Services: 56.8 v 56.0 prelim (confirms 10th month of expansion).
SGP.AU Confirms it is currently in exclusive negotiations in relation to Halcyon Group’s land lease communities business; no agreement has been reached at this time.
(AU) Australia said to be reviewing GST (Goods and Services Tax) on low-value imports.
(NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$110M in government bonds in QE auction v NZ$110M sought.
(AU) Australia Jun ANZ Job Advertisements M/M: 3.0% v 6.8% prior.

Japan

Nikkei 225 opened -0.3%.
(JP) Japan PM Suga confirms LDP failed to win a majority in Tokyo elections, will analyze results and prepare for next time.
(JP) Japan Jun Final PMI Services: 48.0 v 47.2 prelim (confirms 17th month of contraction).
(JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates will closely monitor the impact of COVID and will not hesitate to take additional easing measures if necessary, expect short and long term policy interest rates to remain at their present or lower levels – branch managers meeting.
6502.JP Tokyo Exchange President: Toshiba incident has not caused a downgrade of Japan corp governance by foreign investors.

Korea

Kospi opened +0.1%.
(KR) US and South Korea agree to hold Joint military drills during August – Press.
(KR) North Korea leader Kim made an appearance this weekend, looking significantly skinnier; unclear what exactly is going on – press.
(KR) Bank of Korea (BOK) Sells KRW110B v KRW300B indicated in 6-month Monetary Stabilization Bonds (MSB): Avg yield 0.70% v 0.51% prior.

China/Hong Kong

Hang Seng opened -0.8%; Shanghai Composite opened -0.1%.
(CN) CHINA JUN CAIXIN PMI SERVICES: 50.3 V 54.9E (14th consecutive expansion and lowest since Apr 2020); PMI Composite: 50.6 v 53.8 prior (14th consecutive expansion, lowest since Apr 2020).
(CN) Tangshan (largest steel-making city in China) said to have started to implement production cut equal to 30%; the production cut is expected to remain until the end of 2021 – financial press.
DIDI China Cyberspace Administration reportedly ordered smartphone app stores to remove the Didi app citing concerns on Didi’s illegal collection of personal user data – press.
DIDI Notes China taking the app down may have a negative impact on Rev in China.
(CN) According to data from the China Ministry of Finance, cities, and provinces has sold ~CNY1.9T in “refinancing bonds” from Jan-Jun, which indicates they have doubled bond sales to roll over maturities – press.
(CN) China President Xi to address the summit of CPC and certain other parties on July 6th – Xinhua.
(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: 6.4695 v 6.4712 prior.
(CN) China begins internet security probes into 3 different companies; Begins cybersecurity review into cargo and hiring platforms.

North America

US market closed Monday in observance of the 4th of July.
(US) US White House to begin assistance to the ~200 companies hit by cyberattacks and ransomware attacks.
(US) Follow Up on Friday Ransomware attack: Hackers are demanding $70M to release data – press.

Europe

MRW.UK Confirms to be acquired by Fortress Investment consortium (backed by Softbank) in a £9.5B deal.
(CN) China President Xi, German Chancellor Merkel, and French President Macron are expected to hold a video call this week; unclear on agenda – press.
(UK) Housing Min Jenrick: referring to covid, “the data we are seeing is very positive”; Will move to a period of no legal restrictions; mask-wearing will be a personal choice.
(EU) ECB chief Lagarde: Recovery is still fragile, we agreed to maintain (PEPP) until at least March 2022, and in any case, until we judge that the coronavirus crisis phase is overpressed.

Levels as of 01:00ET

Hang Seng -0.2%; Shanghai Composite +0.2%; Kospi +0.5%; Nikkei225 -0.5%; ASX 200 +0.1%.
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 0.0%.
EUR 1.1869-1.1851; JPY 111.19-110.97; AUD 0.7530-0.7509; NZD 0.7035-0.7509.
Commodity Futures: Gold +0.3% at $1,788/oz; Crude Oil -0.1% at $75.09/brl; Copper +1.0% at $4.28/lb.