Equity Markets Trade Generally Lower After Mixed US Session

General trend

• Nikkei has remained modestly lower; Mitsubishi UFJ declined after earnings report; Companies due to report earnings include Nippon Steel, Japan Airlines; Fast Retailing is due to report Jul sales.
• S&P ASX 200 traded modestly lower ahead of the RBA decision [Resources, Energy and Financial indices declined].
• Hang Seng and HK TECH indices have moved lower; Tencent dropped over 10%; Financials traded generally weaker ahead of Standard Chartered’s earnings; Alibaba and SJM are expected to report after the market close.
• Shanghai Composite pared decline during morning session.
• Companies due to report during the NY morning include Blue Apron, Arconic, Allegheny Technologies, Alibaba, Franklin Resources, Bausch Health, Clorox, Cummins, ConocoPhillips, Corsair Gaming, DowDuPont, Discovery Inc, Eaton Corp, Henry Schein, International Game Technology, Ingredion, IPG Photonics, KKR, L3Harris Technology, Eli Lilly, Louisiana Pacific, Marriott International, Nikola, Owens & Minor, Pitney Bowes, Phillips 66, Ralph Lauren, Sabre Corp, Echostar, Sealed Air, Sunoco, SolarWinds, Under Armour, Westlake Chemical, Willis Towers Watson, Warner Music, Zimmer Biomet, Zebra Technologies.
• New Zealand dollar and 2-yr yield rise on possible mortgage curbs.
• New Zealand Q2 labor market data is due on Wed (Aug 4th).

Headlines/Economic data

Australia/New Zealand

• ASX 200 opened 0.0%.
• (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%; AS EXPECTED, maintains plans to taper bond buying in Sept, but will continue to watch markets.
• CCP.AU Reports FY21 (A$) Net 88.1M v 79.6M y/y, Rev 374.8M v 313.4M y/y.
• (NZ) New Zealand PM Ardern getting COVID tested after becoming sick (follow up: tested negative).
• (AU) Australia Jun Home Loans Value M/M: -1.6% v 2.0%e; Investment lending M/M: 0.7% v 8.0%e.
• (AU) AUSTRALIA JUN BUILDING APPROVALS M/M: -6.7% V -4.0%E.
• (NZ) Reserve Bank of New Zealand (RBNZ) may restrict high leverage mortgages to 10% of lending, effective Oct 1st.
• (AU) Australia PM Morrison: Delta variant is creating a fierce battle for Australia.

Japan

• Nikkei 225 opened -0.7%.
• (JP) JAPAN JULY TOKYO CPI Y/Y: -0.1% V +0.1%E; CPI (EX-FRESH FOOD) Y/Y: 0.1% V 0.0%E; CPI (ex-fresh food/energy) Y/Y: 0.0% v 0.0%e.
• (JP) Japan Fin Min Aso: It is true that Japan Fiscal situation is deteriorating, should return to normal once vaccinations proceed; Not considering additional extra budget at this point.
• (JP) Japan Econ Min Nishimura: Hospital Bed situation has become severe, Shifting to home care for milder cases.
• (JP) Japan Government Pension Fund (GPIF) said to have cut its US government bonds and bills from 47% to 35% of its foreign holdings – financial press.
• 8002.JP Reprots Q1 Net ¥112.1B v ¥58.1B y/y; Op ¥69.2B v ¥52.0B y/y; Rev ¥2.13T v ¥1.59T y/y.
• (JP) Japan MoF sells ¥2.6T v ¥2.6T indicated in 0.1% 10-year JGBs; avg yield 0.0090% v 0.0580% prior; bid to cover: 3.33x v 3.54x prior.

Korea

• Kospi opened -0.1%.
• (KR) SOUTH KOREA JULY CPI M/M: 0.2% V 0.0%E; Y/Y: 2.6% V 2.4%E (annual CPI matches the fastest pace since Apr 2012, above target for 4th straight month).
• (KR) South Korea Govt: No unusual signs in health of North Korea Leader Kim – Yonhap.

China/Hong Kong

• Hang Seng opened +0.2%; Shanghai Composite opened -0.5%.
• (CN) China Gold Association: H1 Gold Production 152.8T, -10.2% y/y; Consumption 547.1T,+69.2% y/y.
• (CN) Reportedly China set new ‘buy Chinese’ targets for state run companies – press.
• (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: 6.4610 v 6.4660 prior.
• (CN) China Securities Times front-page: China should boost domestic economy with Monetary and fiscal policies; sees room to step up monetary and fiscal policies; China may further loosen monetary and fiscal policies.
• (CN) China State Council requires students to reasonably use electronic products and prevent online game addiction (gaming names down on the announcement).

North America

• TBIO Sanofi reportedly made offer to acquire Translate Bio; Translate’s board to meet later today to consider bid – press.
• NXPI Reports Q2 $1.46 v $2.32e, Rev $2.60B v $2.58Be; Guides Q3 Rev well above ests.
• MOS Reports Q2 $1.17 v $1.01e, Rev $2.80B v $2.93Be.
• (US) Fed’s Waller (hawk, voter): Personal opinion is that Fed could make an announcement on taper in Sept; If we get 800K to 1M new jobs in next two jobs reports we will have regained 85% of jobs lost, which is ‘significant further progress’ – CNBC.

Europe

• MAERSK.DK Reports prelim Q2 EBITDA $5.1B v $4.7Be, Rev $14.2B v $13.8Be; Raises guidance.
• (UK) PM Johnson said to have cancelled plans for an “amber” COVID watch list after Cabinet was vehemently against and worried about cancelled vacations to the UK as a result – UK press.

Levels as of 01:15ET

• Hang Seng -0.1%; Shanghai Composite -0.4%; Kospi +0.2%; Nikkei225 -0.7%; ASX 200 -0.4%.
• Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax +0.4%; FTSE100 -0.1%.
• EUR 1.1883-1.1868; JPY 109.35-109.14; AUD 0.7408-0.7358; NZD 0.7014-0.6964.
• Commodity Futures: Gold -0.5% at $1,813/oz; Crude Oil +0.0% at $71.28/brl; Copper +0.1% at $4.44/lb.