Mixed trading seen in Asia after recent gains, Shanghai opened higher after recent gains
|Asia Market Update: Mixed trading seen in Asia after recent gains, Shanghai opened higher after recent gains (on track for 6th straight rise); US Equity FUTs decline after rise on Mon., quiet trade for US Treasury FUTs in Asia.
General Trend:
- Shanghai Composite rose over 1% during morning session; gaining sectors included Industrials and Consumer Discretionary, property shares and financials lagged after outperformance seen on Mon.
- Nikkei lags after recent gain and the rise in the Yen seen on Monday’s session, Fast Retailing declines by over 1% (largest Nikkei component); Automakers and banks drop after gains on Monday
- Gainers in Australia include Resources and Consumer Staples companies, Financials and Energy firms lag
- Samsung Electronics reversed opening gain following Q2 prelim results (trading volume above avg)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.2%
- (AU) Victoria State Premier: Confirms Lockdown across metropolitan Melbourne; Reimposing Stage 3 stay at home restrictions for 6-weeks
- (AU) Victoria state reports 191 additional coronavirus cases v 127 prior
- (AU) Victoria State Premier considering statewide 4-week lockdown due to spike in coronavirus cases
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH TARGET RATE UNCHANGED AT 0.25% AND 3-YR BOND YIELD TARGET AT 0.25%, AS EXPECTED
- (NZ) New Zealand Q2 NZIER Business Confidence -63% v -70% prior; Capacity Utilization: 92.8% v 92.1% prior
China/Hong Kong
- Hang Seng opened +0.9%, Shanghai Composite +1.4%
- (CN) Trump administration and Chinese officials reportedly plan to discuss China's compliance with the 'Phase 1' trade deal in meeting next month – press (July 6th)
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos v Skips prior; Net drain CNY110B v Net drain CNY180B prior (7th straight skip)
- (CN) China PBOC sets Yuan reference rate: 7.0310 v 7.0663 prior (Strongest yuan fix since Apr 13th)
- Hong Kong Monetary Authority (HKMA) said to sell ~HK$7.2B to defend peg as HKD currency traded at strong end of trading band
Japan
- Nikkei 225 opened -0.3%
- (JP) Japan MoF sells ¥900B v ¥900B indicated (vs ¥700B prior) in 0.60% 30-year JGBs, avg yield 0.6120% v 0.5290% prior, bid to cover 3.9x v 2.84x prior (Highest BTC in 1 year)
- (JP) Japan May Household Spending Y/Y: -16.2% v -11.8%e (record decline, 8th straight fall)
- (JP) Japan May Labor Cash Earnings Y/Y -2.1% v -1.0%e; Real Cash Earnings Y/Y: -2.1% v -0.8%e (largest annual decline in ~5 years)
- (JP) JAPAN MAY PRELIMINARY LEADING INDEX CI: 79.3 V 79.3E; COINCIDENT INDEX: 74.6 V 74.6E
Korea
- Kospi opened +0.6%
- Samsung Electronics [005935.KR]: Reports Prelim Q2 (KRW) Op 8.10T v 6.21Te (6.6T y/y); Rev 52.0T v 50.7Te (56.1T y/y); Earnings reflect one off gain related to display unit
- (KR) South Korea reported to seek KRW84T in deficit financing bonds in 2021 v KRW97.1T y/y
- (KR) Bank of Korea (BOK) provides KRW2.54T in liquidity via weekly repo operations v KRW530B prior
- (KR) South Korea May Current Account: +$2.3B v -$3.1B prior; Balance of Goods (BOP): $2.5B v $0.8B prior
Other Asia
- (PH) Philippines Jun CPI Y/Y: 2.5% v 2.2%e; Core CPI 3.0% v 2.9% prior
- (SG) Singapore will release Q2 advance GDP data on July 14th (Tuesday)
North America
- (US) Fed Bostic (dove, non-voter in 2020): US recovery may be 'leveling off'; Concerned about data on business openings - FT Interview
- Apple [AAPL]: Says it has not received requests for HK data since the new national security law took effect last week; Assessing Hong Kong Security Law [Reminder: The comments from Apple follow an earlier released report which noted that various tech companies said they would halt the processing of requests for user data from HK law enforcement agencies, cited the new HK security law (July 6th)]
- Microsoft [MSFT]: Says it will pause replies related to Hong Kong Data requests - Spokesman [comments on the new national security law in HK]
- Vivint Solar [VSLR]: SunRun to acquire Vivint Solar for $3.2B [enterprise value] in an all stock deal; each share of Vivint Solar common stock will be exchanged for 0.55 shares of Sunrun common stock (implied value of the offer equals ~$11.74/share, ~10% premium to prior close)
Levels as of 1:20 ET
- Nikkei 225, -0.6%, ASX 200 +0.8% , Hang Seng -0.1%; Shanghai Composite +1.9% ; Kospi -0.5%
- Equity S&P500 Futures: -0.2%; Nasdaq100 flat, Dax -0.2%; FTSE100 -0.1%
- EUR 1.1332-1.1306 ; JPY 107.40-107.24 ; AUD 0.6998-0.6954 ;NZD 0.6581-0.6546
- Gold +0.1% at $1,794/oz; Crude Oil -0.4% at $40.48/brl; Copper -0.1% at $2.7837/lb
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