Another quiet day in Asia with no significant Delta – Focus on US July ISM Services

General trend

- Today saw little untoward data or news to stop Asian stocks recovering some recent losses, shadowing a better start to the week for US equities overnight. {Kospi outperformed +1.3% with all major indices well in the green).

- Little trade news, for a change. Japan trade rep Akazawa did say he was heading back to the US from Tuesday, with the goal of getting some written confirmation out of the US side, at minimum a "fact sheet" (from PM Ishiba). [Note: The never-ending cultural chasm between US generality and Japanese specificity looks like it will continue forward with the trade deal].

- PMI Services figures out of Australia and Japan confirmed 18 and 9 months of expansion, respectively.

- Meanwhile, China July PMI Services was two Big Figures better than expected. [Note: Comes as the sponsor of the data series changed from Caixin to S&P.].

- Japan BOJ OIS probabilities of a BOJ rate hike in October continued to fall steeply, down to 36% (from 49.5% on Friday), and for a December hike fell to 57% (from 68.5% on Friday).

- JP 10-yr auction went off without a hitch, though with a higher tail than the prior month (14bps vs 3bps prior). 10-yr yields continued falling along with the rest of the yield curve, to as much as -4bps after the auction.

- Bank of Japan Minutes for June (two meetings ago) did not release any new information, but added to the view that the Bank would likely move on from its current wait-and-see approach and consider resuming the process of policy interest rate hikes, if trade friction was expected to progress without escalation.

- Australia weekly Consumer Confidence index rose to a three year high, north of 90.

- US equity FUTs +0.2% to +0.3% during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Tue Aug 5th (Tue night US July ISM Services).

- Wed Aug 6th NZ Q2 jobs, IN RBI rate decision.

- Thu Aug 7th AU Jun Trade Balance, PH Q2 GDP, CN July Trade Balance (Thu eve UK BOE rate decision).

- Fri Aug 8th JP Jun Household Spending, BOJ Summary of Opinions.

- Sat Aug 9th CN July CPI/PPI.

Holidays in Asia this week

- N/A.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.8% at 8,734.

- Australia Jun Household Spending M/M: 0.5% v 1.0% prior; Y/Y: 4.8% v 4.4% prior.

- Australia July ANZ-Indeed Job Advertisements M/M: -1.0% v +1.6% prior.

- Australia July Final PMI Services: 54.1 v 53.8 prelim (confirms 18th month of expansion).

- Australia Resources Min King: Considering price floor to support critical mineral projects - financial press.

- Mitsubishi Heavy: Australia to select Japan proposal for next generation frigates; Details yet to be finalized with Mitsubishi Heavy and other Japan firms – Nikkei.

- Australia sells A$300M vs. A$300M indicated in 4.25% Jun 2034 bonds; Avg Yield: 4.0889% v 4.2162% prior; bid-to-cover: 4.93x v 5.16x prior.

- New Zealand July ANZ Commodity Price M/M: -1.8% v -2.4% prior.

China/Hong Kong

- Hang Seng opens flat at 24,746; Shanghai Composite opens +0.2% at 3,588.

- CHINA JULY S&P PMI SERVICES: 52.6 V 50.4E (30th month of expansion).

- Hong Kong July PMI (whole economy): 49.2 v 47.8 prior.

- China PBOC has been urged to balance growth and risks in monetary easing, notes banks' NIMs have declined to record lows; cites analysts - Shanghai Securities News.

- China Agriculture Ministry: Autumn grain production facing significant risks due to overlapping floods and droughts.

- China Preliminary July NEV Sales Y/Y: +25% v +29.7% prior – PCA.

- China PBOC sets Yuan reference rate: 7.1366 v 7.1395 prior.

- China PBOC Open Market Operation (OMO): Injects CNY161B in 7-day reverse repos; Net drains CNY289B v injects CNY49B prior.

Japan

- Nikkei 225 opens +0.6% at 40,507.

- Japan July Final PMI Services: 53.6 v 53.5 prelim (confirms 9th month of expansion and highest in five months).

- Bank of Japan (BOJ) June Monetary Policy Meeting Minutes (2 decisions ago): As for the future conduct of monetary policy, members shared the view that, if the baseline scenario of the outlook for economic activity and prices was realized, the Bank would, in accordance with improvement in economic activity and prices, continue to raise the policy interest rate and adjust the degree of monetary accommodation.

- Japan sells ¥2.6T VS. ¥2.6T indicated in 10-year JGB bonds; AVG YIELD: 1.4620% V 1.4420% prior; bid-to-cover: 3.06X V 3.51X (below 12 month average of ~3.2x).

- Nikkei: DRAM prices 'soar', prices for standard DRAM said to remain 'high' after doubling in just 1 month.

- Japan Economy Min/Trade Negotiator Akazawa: To build supply chains that benefit Japan, US - financial press.

- Japan PM Ishiba: Reiterates US trade deal has 'no point' without efficient implementation; Must also be swift - financial press.

- Japan Fin Min Kato: Important to maintain trust in public finances - financial press.

- Japan and UK defense chiefs are expected to hold talks at the end of Aug - Japanese press.

- Reportedly Japan's PM Ishiba plans to shift rice policy with a focus on production increase - Nikkei.

- Fast Retailing: Reports July Uniqlo Japan SSS +2.4% y/y v +6.4% prior [overnight update].

Korea

- Kospi opens +1.3% at 3,187.

- South Korea July CPI M/M: 0.2% V 0.2%E; Y/Y: 2.1% V 2.1%E.

- South Korea July Foreign Reserves: $411.3B v $410.2B prior (update).

- South Korea Presidential Spokesperson Kang: Not easy to rethink policy based on market swings; notes still the Presidential office to listen to various voices - comments on capital gains tax.

- Bank of Korea (BOK): August inflation may slow on mobile phone charges and significantly lower due to temporary factors - comments on July CPI.

- South Korea Fin Ministry may project 2025 GDP growth at a higher than estimated 1% level, as early as next week - Korean press.

Other Asia

- Indonesia Q2 GDP Q/Q: 4.0% v 3.7%e; Y/Y: 5.1% v 4.8%e.

- Philippines July CPI M/M: 0.3% v 0.3%e; Y/Y: 0.9% v 1.1%e.

- Singapore July PMI (whole economy): 52.7 v 51.0 prior.

- (IN) India Foreign Min Jaiswal: India began importing Russian oil because traditional supplies were diverted to Europe following the Ukraine war conflict; Will take necessary measures to safeguard interests.

- (IN) Pres Trump: To 'substantially' raising tariff paid by India to the US due to purchases of Russian oil - Truth Social post.

North America

- (US) CFTC to allow trading of spot crypto markets via CFTC futures exchanges - CFTC Acting Chair statement (update).

- (US) White House said to be preparing Exec Order targeting "political discrimination" via debanking carried out by big banks as soon as this week - financial press.

- US posts guidance on reciprocal tariffs in effect August 7th.

- (US) DOJ said to consign grand jury to re-investigate 2016 Trump-Russia probe - WSJ.

- (US) Transportation Sec Duffy (Interim NASA Administrator) to announce a nuclear reactor project on the Moon - Politico.

- (US) Pres Trump: Last week’s Job’s Report was RIGGED, just like the numbers prior to the Presidential Election were Rigged.

- (BR) Brazil Labor Min Marinho: Govt to announce US tariff response from Aug 6th.

- (BR) Brazil Fin Min Haddad: May speak with US Treasury Sec Bessent this week; Regarding countermeasures, we've not agreed on a specific date.

- (US) Doubleline's Gundlach: Up for debate whether the Fed should have cut rates last week, Will cut 2 or 3x this year; Powell was hawkish at press conference – CNBC.

- (US) Jun final Durable Goods Orders: -9.4% V -9.3%E; durables (ex-transportation): 0.2% v 0.2%E.

- (US) Jun factory orders: -4.8% V -4.8%E.

Europe

- (CH) Swiss govt: Not planning trade countermeasures at this time; Determined to make a more attractive offer to the US.

- (EU) Reportedly EU to suspend trade countermeasures against US by 6 mos - press.

- (DE) Germany Fin Min Klingbeil: We need a quick solution for the trade conflict, security is improtant for German companies.

- (IL) Israel PM Netanyahu said leaning towards expanding Gaza offensive and seizing entirety of Gaza strip - Israeli press.

- EURO ZONE AUG SENTIX INVESTOR CONFIDENCE: -3.7 V +6.9E (1st negative print since May).

Levels as of 01:20 ET

- Nikkei 225 +0.6%, ASX 200 1.2%, Hang Seng +0.5%; Shanghai Composite +0.7%; Kospi +1.3%.

- Equity S&P500 Futures +0.2%; Nasdaq100 +0.3%; DAX +0.4%; FTSE100 flat.

- EUR 1.1551-1.1588; JPY 146.62-147.26; AUD 0.6454-0.6480; NZD 0.5891-5922.

- Gold -0.1% at $3,424/oz; BTC -0.1% at $114,470; Crude Oil -0.4% at $66.06/bbl; Copper -0.2% at $4.4483/lb.