Equities trade mixed, Chinese markets lag despite the PBOC’s surprise easing move
|Asia Market Update: Equities trade mixed; Chinese markets lag despite the PBOC’s surprise easing move; CN July data missed ests; China gov’t bond FUTs rally, CNH drops.
General trend
- Japan and China data below ests.
- Commodity currencies decline amid today’s focus on China; Copper also drops.
- RBA Minutes due on Tues. [Aug 16th].
- Chinese banks decline after bank lending data and MLF rate cut, property sector has also remained a focal point.
- US delistings weigh on CN firms [China Life, CHALCO, PetroChina, Sinopec].
- Japanese equities outperform.
- Australian corporate earnings in focus [Bluescope Steel, Beach Energy].
- US equity FUTs trade slightly lower after prior rise.
- South Korea closed for holiday.
Headlines/economic data
Australia/New Zealand
- ASX 200 opened flat.
- (NZ) New Zealand July Performance Service Index (PSI): 51.2 v 54.7 prior.
- (NZ) NZIER RBNZ Shadow Board: majority view was that a 50 basis points OCR increase in the August meeting [Aug 17th (Wed)] is warranted [in line with the consensus], with only two members recommending a different quantum of tightening (25 basis points and 75 basis points each).
Japan
- Nikkei 225 opened +0.3%.
- (JP) Japan Q2 preliminary GDP Q/Q: 0.5% V 0.7%E; GDP annualized Q/Q: 2.2% V 2.6%E.
- (JP) Cashless apps in Japan to enable remittance to banks - Japanese press.
- (JP) Japan reports 2 China ships entered into territorial waters.
- (JP) Japan PM Kishida: Has instructed Agricultural Min to maintain imported wheat prices starting in Oct, Will draw up ideas for plans in Oct to prevent food price increases.
- (JP) Japan Econ Min Yamagiwa: Need to pay attention to uncertainties that can hamper economic growth such as inflation, global economic slowdown, and resurgence of coronavirus.
- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].
- (JP) Japan Jun Final Industrial Production M/M: 9.2% v 8.9% prelim; Y/Y: -2.8% v -3.1% prelim.
Korea
- Kospi closed for holiday.
- (KR) Russia President Putin told North Korea leader Kim Jong Un that the two countries will expand their bilateral relations - North Korea media.
- (KR) South Korea President Yoon: Japan is a partner with South Korea, both countries face similar problems; Must quickly improve relations between countries.
China/Hong Kong
- Hang Seng opened -0.7%; Shanghai Composite opened -0.3%.
- (CN) China conducts CNY400B VS. CNY600B maturing in 1-year medium-term lending facility (MLF) AT 2.75% VS. 2.85% prior.
- (CN) China PBOC sets Yuan reference rate: 6.7410 v 6.7413 prior.
- (CN) China PLA Eastern Theater Command likely to conduct strong & powerful military operations in the waters & airspaces around the island of Taiwan as countermeasures to latest US lawmakers' visit to the island - Global Times.
- (CN) China July new yuan loans (CNY): 679.0B V 1.125TE.
- (UK) Reportedly BoE Gov Bailey would be open to a review of the BoE's mandate, following UK PM candidate Liz Truss's criticism of its approach to inflation - UK press.
- (CN) China PBOC cuts 7-day reverse repo rate to 2.00% FROM 2.10%.
- (CN) China PBOC cuts 1-year MLF rate by 10BPS (1ST cut since January).
- (CN) China National Bureau of Statistics (NBS): Global stagflation risks have risen; to stabilize employment and consumer prices; Momentum of domestic economic recovery slowed in Jul.
- (CN) China July new home prices M/M: -0.1% V -0.1%E (11TH straight decline); Y/Y: -0.9% V -0.5% PRIOR.
- (CN) China July industrial production Y/Y: 3.8% V 4.3%E; YTD Y/Y: 3.5% V 3.5%E.
- (CN) China Jun Surveyed Jobless Rate: 5.4% v 5.5%e.
- (CN) China July YTD property investment Y/Y: -6.4% V -5.7%E.
- (CN) China July YTD Residential Property Sales Y/Y: -31.4% v -31.8% prior.
- (CN) China July fixed urban assetsYTD Y/Y: 5.7% V 6.2%E.
- (CN) China July Retail Sales Y/Y: 2.7% V 4.9%E; YTD Y/Y: -0.2% V +0.1%E.
- (CN) Economic Daily: US delisting does not mean China is pushing for decoupling.
North America
- TSLA CEO Musk said to have contributed a column for the China Cyberspace Administration's official publication -US financial press.
- (US) US Congress delegation, led by Senator Markey, arrived in Taiwan on a two-day visit.
Europe
- (IE) Ireland July Construction PMI: 41.8 v 46.4 prior.
- (UK) Aug Rightmove House Prices M/M: -1.3% v +0.4% prior; Y/Y: 8.2% v 9.3% prior.
- (UK) UK energy firms ScottishPower and E.ON said to be calling for the creation of a special fund that would allow the industry to freeze customers’ bills for two years and spread the cost of the gas-price crisis over a decade or more - UK press.
- (RU) US Wall street said to have restarted Russian bond trading after receiving approval - Press.
Levels as of 01:10 ET
- Nikkei 225, +1.1%, ASX 200 +0.5% , Hang Seng flat; Shanghai Composite flat ; Kospi closed.
- Equity S&P500 Futures: -0.2%; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 -0.1%.
- EUR 1.0268-1.0239 ; JPY 133.59-132.91 ; AUD 0.7128-0.7089 ;NZD 0.6457-0.6418.
- Gold -0.3% at $1,809/oz; Crude Oil -1% at $91.17/brl; Copper -1.5% at $3.6235/lb.
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