Equities trade mixed, the press focused on mixed US CPI and possible rate cuts

Asia market update: Equities trade mixed, the press focused on mixed US CPI and possible rate cuts; Modest rise seen in JGB yields after weaker auction demand, JP 5-year yield +3bps on session; BOJ due to buy bonds tomorrow.

General trend

- Japan sells ¥2.4t v ¥2.4t indicated in 5-year JGB bonds; AVG YIELD: 1.0560% V 0.9890% prior; bid-to-cover: 2.96X V 3.54X prior, weakest btc since Mar 2020 [the 12-month avg btc is 3.74x].

- Japan 10-year bond untraded all day for first time since March 2023 and Credit Suisse global banking panic – press [from Aug 12th].

- (US) Treasury Sec Bessent: FOMC should think about a 50bps cut in Sept - Fox Business interview.

- Not much bond market excitement seen from AU wages; Australia 3-year yield extends drop after recent RBA decision [-1.5bps]; AU Jul jobs data due on Thurs;

- Tencent reports after HK close.

-Another record high for Japan equity markets.

-Shanghai Composite trades at the highest intraday level since Dec 13th 2021.

- S&P ASX 200 erased gain amid earnings [CBA, AGL].

- China Jul banking statistics in focus.

Headlines/economic data

Australia/New Zealand

- (AU) ASX 200 opens flat at 8,847.

- Australia Q2 wage price index Q/Q: 0.8% V 0.8%E; Y/Y: 3.4% V 3.3%E; Both the private and the public sectors had lower annual wage growth compared to the June quarter 2024. Wages in the private sector grew 3.4 per cent over the previous 12 months, lower than the 4.1 per cent growth recorded in the year to June 2024. Annual public sector wage growth was at 3.7 per cent this quarter compared to 3.9 per cent at the same time last year.

- Australia sells A$1.2B v A$1.2B indicated in 4.25% Dec 2035 bonds: Avg Yield: 4.2776% v 4.3442% prior; bid-to-cover: 3.24x v 2.65 x prior.

- CBA [CBA.AU]: Announces multi-year partnership with OpenAI; As part of this arrangement, CommBank employees will progressively get access to OpenAI’s advanced AI tools including its enterprise grade AI solution, ChatGPT Enterprise. CommBank is also investing in comprehensive training and upskilling programs to increase AI capability and embed the responsible use of AI across its workforce..

- New Zealand July Total Card Spending M/M: +0.6 v -0.2% prior.

China/Hong Kong

- Hang Seng opens +0.8% at 25,176.

- Shanghai Composite opens +0.1% at 3,668.

- Evergrande [3333.HK]: Announces last day of the listing of the Evergrande shares will be on Aug 22nd; On Aug 8th, the Company received a letter from the Stock Exchange stating that the Listing Committee of the Stock Exchange has decided to cancel the Company's listing under.

- China 2025 corporate equity financing has risen by >300% thus far to >CNY830B - China Securities Journal.

- China PBOC Official: Will guide financial institutions to increase credit issuance to service consumption sector.

- China MOFCOM Official: Reiterates service consumption will help expand domestic demand and employment.

- China Vice Fin Min: To support domestic consumption to become 'major' driving force for the economy.

- China Financial Regulator Official: Lenders need to strengthen management of use of subsidy funds, prevent diversion of funds to non-consumption areas.

- China Military: Monitored and 'drove away' US warship in the waters of Scarborough shoal - Chinese media.

- China PBOC Open Market Operation (OMO): Injects CNY118.5B in 7-day reverse repos; Net drain CNY20.0B v drains CNY46B prior.

- China PBOC sets Yuan reference rate: 7.1350 v 7.1418 prior.

- HKMA purchased HK$7.1B as the HKD hit the weak end of trading range.

Japan

- Nikkei 225 opens +1% at 43,115 [record high].

- (JP Japan Chief Trade Negotiator Akazawa: 'Not bad' if US President Trump executive order comes by mid-Sept; US cannot get investment help, if promises are not kept; Japan could increase the actual US investment percentage.

- Japan begins anti-dumping probe on China and South Korea steel products.

- Japan July PPI (domestic CGPI) M/M: +0.2% v -0.2% prior; Y/Y: 2.6% v 2.9% prior [11-month low].

Korea

- Kospi opens +1.1% at 3,225.

- South Korea July Unemployment Rate: 2.5% v 2.6% prior.

Other Asia

- (IN) India PM Modi 'likely' to visit the US in Sept for UN Meeting, expected to hold talks with US President Trump - Local Press [Reminder Apr 10th: India Govt Official; Deadline to complete first segment of US trade talks remains Autumn 2025, but would want to do it quickly - financial press].

- Taiwan Semi [2330.TW]: The co's Fab 2 [6-inch] and Fab 5 [8-inch] to end production at the end of 2027; the relevant customers are expected to get assistance to switch or upgrade to the 12-inch fab - Taiwan press.

North America

- (US) Pres. Trump: Powell must lower rates now; Considering major lawsuit against him.

- President Trump to sign executive orders on Wed at 4 pm ET.

- (US) July CPI M/M: 0.2% V 0.2%E; Y/Y: 2.7% V 2.8%E; CPI (ex-food/energy) M/M: 0.3% v 0.3%e; Y/Y: 3.1% v 3.0%e (highest since Feb).

- (US) FTC Resolves Antitrust Concerns Arising from Clean Truck Partnership; Four manufacturers—Daimler Truck, International Motors, PACCAR, and Volvo Group—control up to 99% of the heavy-duty truck market in the United States. Under the Clean Truck Partnership, these four manufacturers agreed in 2023 to abide by a series of CARB regulations limiting truck sales and greenhouse gas emissions.

Levels as of 01:20 ET

- Nikkei 225 +1.2%, ASX 200 -0.5%, Hang Seng +1.9% ; Shanghai Composite +0.5%; Kospi +0.8%.

- Equity S&P500 Futures flat; Nasdaq100 +0.1%; DAX +0.5%; FTSE100 flat.

- EUR 1.1688-1.1669 ; JPY 148.17-147.70 ; AUD 0.6535-0.6516 ; NZD 0.5962-0.5945.

- Gold flat at $3,398/oz; BTC +0.5% at $119,399; Crude Oil +0.1% at $63.23/bbl; Copper flat at $4.5153/lb.