Asian stocks down on US markets; China Jun inflation eased

Asian Market Update: Asian stocks down on US markets; China Jun inflation eased; Alcoa beats forecasts to kickoff start of earnings

Notable Economic Data

- (CN) CHINA JUN CPI Y/Y: 2.3% V 2.4%E

- (CN) CHINA JUN PPI Y/Y: -1.1% V -1.0%E (28th month of decline; smallest decline in 8 months)

- (AU) AUSTRALIA JUL WESTPAC CONSUMER CONFERENCE INDEX: 94.9 V 93.2 PRIOR; M/M: 1.9% V 0.2% PRIOR

- (KR) SOUTH KOREA MAY MONEY SUPPLY L M/M: 1.2% V 0.5% PRIOR; M2 M/M: 0.5% V 0.4% PRIOR

- (KR) SOUTH KOREA JUN BANK LENDING TO HOUSEHOLD (KRW): 488.9T V 485.3T PRIOR (record high)

- (JP) JAPAN JUN MONEY STOCK M2 Y/Y: 3.0% V 3.0%E; M3 Y/Y: 2.4% V 2.5%E

- (NZ) NEW ZEALAND JUN RETAIL CARD SPENDING M/M: 0.0% V 0.2%E; TOTAL CARD SPENDING M/M: 0.5% V +1.8% PRIOR

- (UK) UK JUN BRC SHOP PRICE INDEX Y/Y: -1.8% V -1.4% PRIOR (14th month of decline)

- (US) API PETROLEUM INVENTORIES: CRUDE: -1.7M v -2Me, GASOLINE: +0.1M v -0.5Me, DISTILLATE:-0.5M v +1.5Me

Index Snapshot (as of 02:30 GMT)

- Nikkei225 -0.4%, S&P/ASX -1.0%, Kospi -0.5%, Shanghai Composite

-0.2%, Hang Seng -1.3%, Sept S&P500 flat at 1,961

Commodities/Fixed Income/Currencies

Aug gold +0.3% at $1,320, Aug crude oil flat at $103.39/brl, Sept copper -0.1% at $3.25/lb

- (CN) PBoC sets yuan mid-point at 6.1565 v 6.1626 prior (strongest yuan setting since Jul 1st)

- (CN) PBoC gauges demand for 14-day reverse repos, 14-day and 28-day repos as well as 91-day bill sales

- (JP) BOJ offers to buy ¥110B in JGB with maturity lower than 1-yr, ¥400B in 5-10yr JGB

- (CN) China Ministry of Finance (MOF) sells 1-yr bonds, avg yield 3.54% v 4.04% in Jan - US financial press

- (AU) Australia MoF (AOFM) sells A$700M in 2.75% bonds due 2024; Avg yield: 3.5370%; Bid-to-cover: 3.1x

Market Focal Points/Key Themes

- The Asian bourses fell once again as Wall Street continued to selloff on concerns of overvaluation while Chinese inflation eased to 2.3% down from the prior month's reading of 2.5%. The June inflation data was less than the expected 2.4% and well short of the 3.5% percent annual target set by the government.

- Also out of China, US Treasurer Lew and Sec Kerry attended the 6th round of US-China Strategic and Economic Dialogue where both nations addressed the importance for a bilateral relationship. The US continued to urge exchange rate reform. However, expectations are seen to be modest as there is little hope for progress on key areas such as territorial concerns and cyber issues.

- The consumer sentiment in Australia continued to recover, but remained weaker than average as the Westpac Confidence Index rose 1.9% to 94.9. Westpac's chief economist Bill Evans said, 'This is another disappointing result for the Index. We had expected a stronger bounce back in the Index following its 7% tumble in the aftermath of the Commonwealth Budget in May.'

Equities

US markets:

- AA: Reports Q2 $0.18 v $0.13e, R$5.84B v $5.63Be; +1.1% afterhours

- IP: Board approves $1.5B buyback program (7% of market cap); flat afterhours

- SIMG: Lowers rev guidance; Q2 R$58.5-60.5M v $73.5Me (prior R$71-76M); -13.8% afterhours

Notable movers by sector:

- Consumer Discretionary: Tian Ge Interactive 1980.HK +5.5% (IPO starts trading); Navitas NVT.AU -31.9% (extends partnership)

- Financials: GF Securities 000776.CN +0.2% (H1 guidance)

- Materials: Jiangxi Wannianqing Cement 000789.CN +2.1% (H1 guidance); Northern Star Resources NST.AU +8.3% (Jun gold production results)

- Industrials: Qingdao TGOOD Electric 300001.CN +10.0% (H1 guidance); Hangzhou Xingyuan Filter Technology 300266.CN +3.5% (awarded order)

- Technology: Tencent Holdings 700.HK -2.8% (tech companies listed in US traded lower earlier today); Netposa Technologies 300367.CN +6.8% (H1 guidance)