Economic Data
- (JP) JAPAN JUN JOBLESS RATE: 3.7% V 3.5%E (5-month high, first increase since Aug 2013) ; JOB-TO-APPLICANT RATIO: 1.10 (highest rate since June 1992) V 1.09E; Labor Force Participation Rate m/m: 59.9% v 59.9% prior
- (JP) JAPAN JUN RETAIL SALES M/M: 0.4% V 0.8%E; RETAIL TRADE Y/Y: -0.6% V -0.5%E (3rd consecutive decline)
- (JP) JAPAN JUN OVERALL HOUSEHOLD SPENDING Y/Y: -3.0% (3rd consecutive decline) V -4.0%E
- (AU) AUSTRALIA JUN HIA NEW HOME SALES M/M: +1.2% V -4.3% PRIOR
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index W/W: 116.2 v 113.5 prior
- (KR) SOUTH KOREA JUNE CURRENT ACCOUNT BALANCE: $7.9B V $9.1B PRIOR (28th consecutive surplus); GOODS BALANCE: $6.6B V $9.1B PRIOR
Index Snapshot (as of 02:30 GMT)
- Nikkei225 +0.4%, S&P/ASX -0.1%, Kospi +0.6%, Shanghai Composite -0.1%, Hang Seng +0.2%, Sept S&P500 -0.1% at 1,972
Commodities/Fixed Income/Currencies
- Aug gold +0.1% at $1,305,Sept crude oil -0.3% at $101.38/brl, Sept Copper flat at $3.24/lb
- (CN) PBoC to drain CNY15B in 28-day repos (1st drain after 2 consecutive halts)
- (AU) Australia MoF (AOFM) sells A$100M in 1.25% indexed bonds due 2022; Avg yield: 0.8620%; Bid-to-cover: 6.62x
- JGB: (JP) Japan MoF sells ¥2.47T in 0.1% 2-yr notes, Avg Yield: 0.066% v 0.084% prior; bid to cover: 5.94x v 4.83x prior
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1615 v 6.1622 prior setting (first stronger Yuan setting in 5 sessions)
- USD majors are once again contained to narrow ranges in Asian trading hours. AUD/USD is the most notable mover with a 25pip dip below $0.94. USD/JPY pair also remains bid with a 10pip rise above ¥101.90, testing a 3-week high.
Market Focal Points/Key Themes
- Japan economic data for June has been consistently disappointing, with soft retail trade and labor figures released today tracking worse than expected exports, CPI, and manufacturing. Jobless rate rose for the first time in nearly a year, jumping to 5-month high of 3.7% against expectations of holding steady at 3.5%. Higher unemployment is particularly troublesome given the 22 year high in job-to-applicant ratio, indicating there are plenty of openings for qualified applicants. Retail trade growth was also below expectations, suggesting the higher consumption tax continues to constrain spending. BOJ board member Ishida was still rather optimistic, calling economic recovery moderate and remaining confident in achieving 2% inflation target, but also reiterating BOJ would adjust policy if necessary after examining risks. An earlier press report warned the central bank may have to reassess its outlook on exports at the upcoming policy meeting.
- Australia HIA new home sales recovered from their first decline in 5 months in May, rising 1.2% m/m in June. For the quarter, detached house prices were up 2.6% even though the sub-component fell in the final month. Weekly Roy-Morgan consumer confidence index also bounced, as ANZ economist noted the headwind from the tough budget appears to be temporary with more enduring positive features of the economy driving consumer toward spending. In Australia earnings, QBE was down over 10% after posting a near-20% drop in earnings on higher Latin America claim reserve.
- In China, the PBoC has resumed its open market operations, draining liquidity after a week-long hiatus last week. Yuan midpoint setting was also set firmer for the first time in a week. Also of note, CBRC is reportedly allowing 5 municipal govts to set up asset-management companies to buy bad loans from financial institutions. In terms of China property space, the Academy of Social Sciences (CASS) said housing prices will fall further in the short term but will not post a significant drop.
Equities
US markets:
- CGNX: Reports Q2 $0.29 v $0.23e, R$108.8M v $103Me; +16.4% afterhours
- HLS: Reports Q2 $0.81 v $0.48e, R$604.4M v $588Me; +8.9% afterhours
- AMKR: Reports Q2 $0.13 v $0.14e, R$767M v $762Me, positive forward looking comments, guides FY14 capex higher; +7.1% afterhours
- DRI: Announces leadership succession plans; CEO Otis stepping down as Chairman; +3.6% afterhours
- EMN: Reports Q2 $1.92 v $1.84e, R$2.46B v $2.52Be; flat afterhours
- HLF: Reports Q2 $1.55 (adj) v $1.57e, R$1.31B v $1.36Be; lowers Rev outlook; -11.8% afterhours
- TRGT: To Discontinue TC-5214 Overactive Bladder Program; -24.0% afterhours
Notable movers by sector:
- Consumer Discretionary: Maruetsu 8178.JP +2.0% (press speculation on H1 results; raises H1 guidance); Skymark Airlines 9204.JP -6.6% (previously higher by over 11% on Airbus order cancelation); Sanrio 8136.JP +3.2% (speculation on Q1 results); Suning Appliance 002024.CN -1.4% (Tencent denies speculation on enchanced cooperation with Suning) - Financials: QBE Insurance Group QBE.AU -11.0% (H1 results); Bank of Communication 3328.HK +1.0% (comments on mixed ownership speculations)
- Materials: Mincor Resources MCR.AU -3.7% (Q4 production results, lowers FY14 production guidance); Resolute Mining RSG.AU +2.4% (Q4 production results); China National Materials 1893.HK +8.4% (H1 guidance)
- Industrials: Nissan Motor 7201.JP +1.7% (Q1 results, reaffirms FY14/15 guidance)
- Technology: Chinasoft International 600536.CN +5.9%, Kingsoft 3888.HK +0.8% (China authority visited Microsoft China on monopoly); BOE Technology 000725.CN +1.8% (shares repurchase plan)
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