Definitive EU leaders meeting on Greece set for Sunday

Asian Mid-session Update: Definitive EU leaders meeting on Greece set for Sunday; Shanghai Composite opens down another 7% at 4-month lows despite more efforts to curb panic selling

Economic Data

- (JP) JAPAN JUN BANK LENDING (INCL TRUSTS): 2.5% (4-month low) V 2.6% PRIOR; BANK LENDING (EX- TRUSTS): 2.6% V 2.5%E

- (JP) JAPAN MAY BOP CURRENT ACCOUNT BALANCE: ¥1.9T V ¥1.6TE; BOP ADJUSTED CURRENT ACCOUNT ¥1.6T V ¥1.4TE; TRADE BALANCE BOP BASIS: -¥47.3B V -¥284BE

- (KR) South Korea Jun Bank Lending to Households (KRW): 526.7T v 537.2T prior

- (KR) South Korea May "L" Money Supply M/M: +1.1% v +0.8% prior; M2 Money Supply M/M: 1.0% v 1.0% prior

- (UK) UK JUN BRC SHOP PRICE INDEX Y/Y: -1.3% V -1.9%E; smallest decline in 5 months

Index Snapshot (as of 02:30 GMT)

- Nikkei225 -1.5%, S&P/ASX -1.8%, Kospi -0.9%, Shanghai Composite -4.7%, Hang Seng -4.3%, Sept S&P500 -0.7% at 2,058

Commodities/Fixed Income

- Aug gold -0.1% at $1,151/oz, Aug crude oil -0.5% at $52.09/brl, Sept copper -0.6% at $2.43/lb

- (US) API Petroleum Inventories: Crude -0.96M v -1Me

- (CN) NDRC: to cut gasoline price by CNY95/ton and diesel price by CNY90/ton (as speculated, 5th cut this year)

- USD/CNY: PBoC sets yuan mid point at 6.1175 v 6.1166 prior setting (weakest yuan setting since June 9th)

- (JP) BOJ offers to buy ¥375B in 1-3yr JGBs, ¥425B in 3-5yr JGBs, and ¥400B in 5-10yr JGBs

Market Focal Points/FX

- Greek PM Tsipras perceived the Sunday referendum vote to allow his govt to take a resounding anti-austerity stance, however his ability to compromise will be a more practical skill going into the weekend negotiations. The message that followed today's meeting of European officials was rather hardline, and the weekend deadline for a more lasting agreement appears to be final and definitive. Most telling comments came from Germany's Merkel who ruled out debt haircuts or bridge financing, but rather pressed Athens for a detailed proposal on fiscal reform. EU's Juncker added the Grexit scenario has already been prepared in detail, while EU's Tusk said the worst outcome cannot be excluded. Even the most optimistic French leader remarked the creditors need to consider the possibility of failure to reach a deal at this juncture, even though consequences would be dire. Greek PM Tsipras had a more positive spin on today's proceedings, noting discussions were positive, but also referring to the referendum as a "strong weapon" toward achieving a socially just and economically viable agreement.

- Shanghai Composite opened down some 7% and extended those losses beyond 8% in the first few minutes before paring some declines to enter midday break down nearly 4%. Widespread trading halts continued, with reports of over 50% of total listed companies suspending trading on extreme market volatility. Today's measures to arrest the decline included announcement by CSRC that CSF would continue stabilizing blue chips and increase buying of SME stocks. CIRC also loosened requirements for insurers to allow for more equity investment. In addition, PBoC reiterated intentions to support the stability of the stock market. Also of note, US S&P futures shed 10 handles on the sharply lower open of the China market.

- Risk-off flows played out resoundingly in FX space. AUD/USD fell 60pips to 6-year lows below 0.74 and USD/JPY was down over 60pips as low as 121.90. EUR/USD traded in a 40pip range around the 1.10 handle. NZD was a notable outperformer after 11-month budget showed a surplus of NZ$1.18B - fell above NZ$193ME - supporting the currency about $0.6620.

Equities

US equities/ADRs:

- SYMC: Nearing deal to sell Veritas unit for $7-8B to Carlyle - financial press; +2.6% afterhours

Notable movers by sector:

- Consumer discretionary: Oriental Land Co. 4661.JP -1.5% (Q1 speculation)

- Financials: Guotai Junan 601211.CN -10.0%; CITIC Securities 600030.CN -5.3%, Huatai Securities 601688.CN -6.3%; Ping An Insurance 601318.CN -8.2%, ICBC 601398.CN -4.0% (market momentum)

- Energy: PetroChina 601857.CN -2.8%, Sinopec 600028.CN -4.6% (market momentum)

- Industrials: NTN Corp 6472.JP -2.7% (To raise Europe production capacity); CRRC 1766.HK -8.6% (market momentum)

- Technology: Toshiba 6502.JP -0.8% (speculation to seek credit lines)