Sprint ends T-Mobile takeover process

Asian Market Update: Sprint ends T-Mobile takeover process; NZD hits 2-month lows after another price decline in dairy auction and soft wage growth

Economic Data

- (NZ) NEW ZEALAND Q2 UNEMPLOYMENT RATE: 5.6% V 5.8%E; EMPLOYMENT CHANGE Q/Q: 0.4% V 0.7%E; Y/Y: 3.7% V 4.0%E

- (NZ) NEW ZEALAND Q2 AVERAGE HOURLY EARNINGS Q/Q: 0.5% V 0.6%E; PRIVATE WAGES EX-OVERTIME Q/Q: 0.6% V 0.5%E; PRIVATE WAGES INCL OVERTIME Q/Q: 0.6% V 0.5%E

- (UK) UK JULY BRC SHOP PRICE INDEX Y/Y: -1.9% V -1.6%E

Index Snapshot (as of 02:30 GMT)

- Nikkei225 -0.9%, S&P/ASX -0.3%, Kospi -0.2%, Shanghai Composite -1.2%, Hang Seng -1.0%, Sept S&P500 flat at 1,913

Commodities/Fixed Income/Currencies

- Dec gold +0.4% at $1,291, Sept crude oil +0.3% at $97.65/brl, Sept Copper flat at $3.20/lb

- (JP) BOJ offers to buy ¥400B in 5-10yr JGB, ¥100B in 10-25yr JGB and ¥30B in JGB with maturity over 25-yr

- (AU) Australia MoF (AOFM) sells A$700M in 2026 bonds; avg yield 3.6292%; bid-to-cover: 2.71x

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1681 v 6.1655 prior setting (1st weaker setting in three sessions, matches weakest Yuan setting since Jun 5th)

- (US) API PETROLEUM INVENTORIES: CRUDE: -5.5M (6th consecutive draw; largest draw since June 17th) v -1.5Me, GASOLINE: -3.6M v 0e, DISTILLATE: -0.5M v +0.5Me

- (NZ) Fonterra Global Dairy Trade auction: Dairy Trade price index: -8.4% from prior auction

Market Focal Points/Key Themes

- T-Mobile and Sprint are down 9% and 15% respectively in the extended session after a press report that the latter is suspending its takeover process due to anticipated regulatory obstacles. CNBC's Faber also tweeted he can confirm the formal announcement of ended negotiations will arrive tomorrow, along with the appointment of a new Sprint CEO. Recall the recent press reports have been skeptical of the deal, suggesting it could take 1-2 years for DOJ/FCC to decide on approving the merger. There is little indication on whether the end of talks will trigger the payment of break-up fees.

- UN Security Council held an emergency session on continued deterioration in east Ukraine after earlier reports from a Polish official suggested as many as 40K Russian troops amassed at the border. The conflict appears to be coming to a head with more shelling of the rebel stronghold of Donetsk, and observers suggest Russia may be very close to intervening under the guise of managing the humanitarian toll inflicted by war within a densely populated area. Russia's ambassador to UN Churkin reiterated Moscow is willing to work with all humanitarian groups, and that he hopes today's UN discussion will lead to greater international cooperation.

- Kiwi dollar is back in focus among the majors, falling to 2-month lows against the greenback in the wake of dairy auction and Q2 employment figures. Fonterra Global Dairy Trade results saw prices fall another 8.4% from prior event to the lowest levels since Oct of 2012. New Zealand unemployment rate fell and participation rate rose, however NZD sold off further as growth of employed was below expectations. NZD/USD is down 40pips below $0.8430, NZD/JPY down 45pips at ¥86.40, and AUD/NZD cross is at a 1-week high above NZ$1.1030.

Equities

US markets:

- DRYS: Reports Q2 -$0.01 v -$0.05e, R$527.7M v $434Me; +7.0% afterhours

- ZEN: Reports Q2 -$0.16 v -$0.26e, R$29.5M v $16.4M y/y; +7.0% afterhours

- ATVI: Reports Q2 $0.06 v $0.02e, R$658M v $607Me; Raises outlook; +4.2% afterhours

- CERN: Cerner to Acquire Siemens Health Services for $1.3B in cash; more than $0.15 accretive to Cerner's 2015 adj EPS; +3.1% afterhours

- JAZZ: Reports Q2 $2.05 v $1.93e, R$291.2M v $275Me; +3.1% afterhours

- ADP: Announces 30M share buyback plan (6% of shares outstanding); +1.1% afterhours

- DIS: Reports Q3 $1.28 v $1.17e, R$12.47B v $12.2Be; +0.6% afterhours

- FEYE: Reports Q2 -$0.55 v -$0.60e, R$94.5M v $89.3Me; -2.1% afterhours

- Z: Reports Q2 -$0.05 v -$0.05e, R$78.7M v $76.4Me; -2.2% afterhours

- PZZA: Reports Q2 $0.40 v $0.41e, R$380.9M v $389Me; -3.1% afterhours

- CHUY: Reports Q2 $0.21 v $0.22e, R$63.3M v $64.2Me; -3.9% afterhours

- TTWO: Reports Q1 -$0.14 v -$0.26e, R$151.6M v $136Me; -4.5% afterhours

- FSLR: Reports Q2 $0.04 (GAAP) v $0.33e, R$544.3M v $789Me; -4.8% afterhours

- TMUS: Sprint said to abandon pursuit of T-Mobile acquisition - financial press; -8.9% afterhours (**S: -15.1% afterhours)

- TWX: 21st Century Fox Withdraws Its Proposal to Acquire Time Warner Inc; Board authorized a $6B share repurchase program (13.5% of market cap); -10.6% afterhours

- GRPN: Reports Q2 $0.01 v $0.01e, R$751.6M v $761Me, Guides Q3 $0.00-0.02 v $0.03e, R$720-770MM v $755Me, lowers FY14 adj EBITDA; -16.8% afterhours

- CYTX: ATHENA and ATHENA II trials placed on clinical hold; -22.4% afterhours

Notable movers by sector:

- Consumer Discretionary: Skymark Airlines 9204.JP -4.2% (to withdraw flight services from Narita Airport); Suntory Beverage & Food 2587.JP +5.7% (H1 results); Namco Bandai Holdings 7832.JP +14.5% (Q1 results); Ourgame 6899.HK +3.8% (H1 guidance); MGM China 2282.HK -0.2% (H1 results)

- Financials: Guotai Junan International 1788.HK +1.0% (H1 results)

- Energy: Showa Shell 5002.JP -6.5% (H1 results)

- Industrials: Daikin Industries 6367.JP -4.7% (Q1 results); Kubota Corp 6326.JP +10.0% (Q1 results)

- Technology: Dainippon Screen Manufacturing 7735.JP +10.3% (Q1 results)

- Healthcare: Santen Pharmaceutical 4536.JP -6.0% (Q1 results); Techno Medica 6678.JP -7.7% (Q1 results)