Equity Markets Generally Rebound, NZD Pares Loss Amid RBNZ

General trend

• Nikkei has risen after the flat open [Topix Information Communication index outperforms, Marine Transportation index lags].
• Shanghai Composite ended morning trading higher [Financials rise on Huarong news].
• Hang Seng has extended modest gains [Financials trade generally higher]; Geely reported earnings; Tencent is due to report after the HK close.
• S&P ASX 200 reversed opening decline [Financial, Energy and Consumer Staples indices rise; BHP and OZ Minerals weigh on Resources index].

Headlines/Economic data

Australia/New Zealand

• ASX 200 opened -0.4%.
• (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 0.25%; NOT EXPECTED.
• (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Keeping rates at 0.25% for now; Employment ‘at or above’ maximum sustainable level ; Clear direction is to lift the cash rate, Neutral OCR at 2.0% – post rate decision press conference.
• (NZ) New Zealand Fin Min Robertson: Clear RBNZ has a direction of travel on rates; Will make no assumptions on what RBNZ will do.
• (AU) Australia PM Morrison: Expectation is that economy will recover strongly.
• BHP.AU Reports FY21 Underlying Net $17.1B v $9.1B y/y, Underlying EBITDA $37.4B v $22.1B y/y, Rev $60.8B v $42.9B y/y; Confirms to intend unifying dual listing structure with primary listing on ASX (yesterday after the close).
• WPL.AU Reports H1 Underlying Net $354M v $303M y/y, Net $317M v -$4.07B y/y; Rev $2.50B v $1.91B y/y, Cuts FY production guidance.
• Reports FY21 (A$) Net (cont ops, non-IFRS) 1.01B v 951M y/y; Rev (non-IFRS) 38.9B v 37.4B y/y.
• (NZ) New Zealand reports 7 COVID cases (up from 1 yesterday).
• (AU) AUSTRALIA Q2 WAGE PRICE INDEX Q/Q: 0.4% V 0.6%E; Y/Y: 1.7% V 1.9%E.

Japan

• Nikkei 225 opened 0.0%.
• (JP) JAPAN JUN CORE MACHINE ORDERS M/M: -1.5% V -2.8%E; Y/Y: 18.6% V 15.6%E.
• 7203.JP Reportedly Toyota to increase global production plan by 5% for 2021 – press.
• (JP) Speculation that Japan PM Suga will not dissolve lower house in early Sept as planned due to extended lockdown, talk that election could be pushed to after party presidential vote on Sept 30th – Japan press.
• (JP) Japan July Trade Balance: ¥441.0B v ¥196.4Be; Adj Trade Balance: ¥52.7B v +¥125.1Be.

Korea

• Kospi opened -0.0%.
• (KR) South Korea FX Authority: Cautiously watching possible overshoot in USD/KRW.
• (KR) South Korea Democratic Party (ruling party) said to be discussing 2022 budget based on expansionary stance – financial press.
• (KR) According to Korea Economic Research Institute (KERI), South Korea’s potential growth rate has been on a steady decline for more than 2 decades due to decreased labor productivity, capital stock and working hours – Yonhap.

China/Hong Kong

• Hang Seng opened +0.2%; Shanghai Composite opened +0.1%.
• (CN) China PBOC sets Yuan reference rate: 6.4915 v 6.4765 prior.
• (CN) Shenzhen branch of PBOC said to have ordered clean up of certain 11 companies that are said to be linked to cryptocurrency.
• (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 Daily: PBOC May be cautious on cutting rates, cites analysts.
• (CN) Alashankou Port said to be ‘completely shut down’ due to COVID cases [timing uncertain] – Chinese press.
• (CN) China said to be seeking to increase rural consumption up to CNY10T – press.

North America

• (US) Fed’s Kashkari (dove, non-voter): Last jobs report was very strong report – PNWER Annual Summit.
• (US) Fed’s Rosengren: Massive Bond purchases ill-suited for US; Would support beginning tapering in Sept – FT.
• (US) Weekly API Crude Oil Inventories: -1.2M v -0.8M prior.
• A Reports Q3 $1.10 v $0.99e, Rev $1.59B v $1.53Be; Raises guidance – + momentum in all markets & regions.
• (US) Fed Chair Powell: Covid is still with us and will likely be for a while; Not clear yet if the Delta strain will have important effects on the economy.

Europe

• (UK) Cabinet ministers are advising PM Johnson to temporarily change the long held tradition of 7% increase to state pensions, as currently would not be affordable – UK press.

Levels as of 01:15ET

• Hang Seng +0.9%; Shanghai Composite +1.0%; Kospi +0.9%; Nikkei225 +0.7%; ASX 200 +0.1%.
• Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.4%; FTSE100 +0.4%.
• EUR 1.1723-1.1702; JPY 109.68-109.47; AUD 0.7270-0.7239; NZD 0.6951-0.6870.
• Commodity Futures: Gold +0.2% at $1,791/oz; Crude Oil +0.4% at $66.58/brl; Copper +0.5% at $4.24/lb.