Fog of war obscures political developments in Iraq and Ukraine

Economic Data

- (SI) SINGAPORE Q2 FINAL GDP Q/Q: +0.1% V -0.3%E; Y/Y: 2.4% V 2.3%E

- (AU) AUSTRALIA JUL NAB BUSINESS CONFIDENCE: 11 (2 1/2-year high) V 8 PRIOR; NAB BUSINESS CONDITIONS: 8 (4-year high) V 2 PRIOR

- (AU) AUSTRALIA Q2 HOUSE PRICE INDEX Q/Q: 1.8% V 1.0%E; Y/Y: 10.1% V 9.3%E

- (AU) AUSTRALIA JUN CREDIT CARD BALANCES (A$): 49.9B V 49.7B PRIOR; CREDIT CARD PURCHASES: 23.1B V 22.9B PRIOR

- (AU) Australia ANZ Roy Morgan Weekly W/W: 108.5 v 115.0 prior

- (NZ) NEW ZEALAND REINZ JULY HOUSE PRICE INDEX: 3,885 V 3,913 PRIOR; M/M: -0.7% V -0.3%; HOUSE SALES Y/Y: -13.0% V -6.1% PRIOR

- (NZ) NEW ZEALAND JUL ANZ TRUCKOMETER HEAVY M/M: +2.6% V -0.7% PRIOR (first increase in 3 months)

- (JP) JAPAN JUL PPI M/M: 0.3% V 0.4%E; Y/Y: 4.3% V 4.4%E

- (UK) UK JULY BRC SALES LFL Y/Y: -0.3% V +0.9%E (2nd consecutive decline)

Index Snapshot (as of 02:30 GMT)

- Nikkei225 +0.4%, S&P/ASX +1.1%, Kospi +0.3%, Shanghai Composite -0.6%, Hang Seng -0.2%, Sept S&P500 +0.1% at 1,934

Commodities/Fixed Income/Currencies

- Dec gold -0.2% at $1,308, Sept crude oil -0.2%, Sept Copper -0.4% at $3.16/lb

- (US) PIMCO: Lowers Total Return Fund's holding of US Treasuries to 45% in July from 47% in June - financial press

- JGB: (JP) Japan MoF sells ¥547B in 1.7% (1.7% prior) 30-yr notes; Avg yield: 1.676% v 1.703% prior; Bid to cover: 4.06x v 3.12x prior

- (CN) PBoC to drain CNY20B in 14-day repos (5th consecutive drain)

- (AU) Australia MoF (AOFM) sells A$100M in 3.0% 2025 indexed Bonds; avg yield: 1.1056%; bid-to-cover: 5.47x

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1517 v 6.1522 prior setting (4th consecutive firmer setting; Strongest setting since July 14th)

Market Focal Points/Key Themes

- Easing of tensions on the Russia/Ukraine border continues to prop up risk assets, even as the situation on the ground remains highly fluid. Russian Foreign Ministry had reportedly secured an agreement with Ukraine govt to participate in a humanitarian mission to provide aid to displaced locals in a joint effort with representatives from the US and EU. This could potentially lead to a more lasting ceasefire and de-escalation in violence that is estimated to have killed over 1K people since April. Subsequent reports however also indicate that US Pres Obama's conversation with Ukraine's Poroshenko insist that any Russian help must require full consent from Kiev, which remains extremely suspicious of Moscow sending additional personnel into the country and has accused Russia of still amassing 45K troops near the border. Obama is also pushing for the Ukraine military to be restrained in military operations to avoid further civilian casualties.

- In Iraq, the problem of political vacuum continues to play out in the botched transition in the post of prime minister. Iraq's Maliki maintains the nomination of Al-Abadi by the new Pres Masoum has no legal basis, solidifying his claim to the 3rd term as PM with support of his State of Law party. Pres Obama held a press conference, reiterating that US supports the new Iraqi President Masoum and the newly-named PM Al-Abadi. Obama also said US airstrikes have prevented ISIS from making further advances on Erbil, but it will be easier for Iraqi army to mobilize once the govt transition is sorted out.

- Australia dominated economic calendar ahead of more notable releases of Japan GDP and more China July figures later this week. Improvement in NAB business sentiment was particularly impressive, hitting 10-quarter high on Confidence and 4-year high on Conditions components. NAB chief economist said "stronger sales and profits are driving the trend, but the recovery continues to be relatively jobless with the employment index seeing more moderate gains." AUD/USD bounced about 20pips on the release toward $0.9270. NZD/USD is testing 2-month lows below $0.8420, with losses accelerating after a bigger slide in New Zealand house prices.

Equities

US markets:

- ICPT: Reports Q2 -$0.79 v $1.26e, R$0.4M v $0.4Me (2 est); updates clinical trials for its lead product candidate in cirrhosis and NASH; +57.7% afterhours

- TRAK: Reports Q2 $0.41 v $0.37e, R$225M v $213Me; +13.3% afterhours

- DTSI: Reports Q2 $0.47 v $0.13e, R$36.2M v $28.4Me; +11.8% afterhours

- RAX: Reports Q2 $0.16 v $0.16e, R$441.1M v $437Me, guides Q3 R$454-461M v $455Me; -1.5% afterhours

- MTZ: Reports Q2 $0.40 v $0.41e, R$1.10B v $1.11Be; -3.6% afterhours

- CZR: Reports Q2 -$3.24 v -$1.24e, R$2.19B v $2.21Be; -4.8% afterhours

- CALL: Reports Q2 $0.31 v $0.32e, R$29.5M v $31.6Me (only 1 est.); -8.7% afterhours

- NUAN: Reports Q3 $0.27 v $0.27e, R$475.5M v $499Me, Guides Q4 $0.24-0.29 v $0.35e, R$500-520M v $541Me, Cuts FY14 guidance; -9.9% afterhours

- INTX: Reports Q2 -$0.11 v $0.08 y/y, R$64.3M v $80.7M y/y; to restructure; -15.9% afterhours

- NIHD: Reports Q2 -$3.65 v -$2.38, R$968.8M v $877Me, liquidity position not sufficient to support business; -58.8% afterhours

Notable movers by sector:

- Consumer Discretionary: Slater & Gordon Ltd SGH.AU +5.1% (FY14 results); Domino's Pizza Enterprises DMP.AU +8.0% (FY14 results)

- Consumer staples: Yonghui Superstores Co Ltd 601933.CN +10.0% (Dairy Farm acquires stake); Henan Shuanghui Investment & Development 000895.CN -1.6% (H1 results)

- Financials: Poly Property Group 119.HK -2.2% (July operating results); Mitsubishi UFJ Financial Group 8306.JP +1.6% (planning to work with client on risk assets)

- Materials: Ishihara Sangyo Kaisha 4028.JP -2.2% (Q1 results)

- Industrials: Toyo Tanso 5310.JP -3.5% (H1 results); Bradken Ltd BKN.AU +4.9% (FY14 results)

- Technology: Tencent Holdings 700.HK +0.8% (may bid for Sinopec's retail business); Anhui USTC iFlytek 002230.CN +3.3% (H1 results)

- Utilities: Ebara Corp 6361.JP -3.6% (Q1 results)