Asia Market Update: Asian markets trade mixed after lack of direction from US stocks; PBoC utilizes 28-day reverse repo ( 1st time since Jan), KRW weakens on gov’t comments


General Trend:

- Hang Seng underperforms amid focus on extradition bill protests

- Chinese equities decline in early trading, markets rose over 2.5% on Tuesday on expectations of more infrastructure spending

- Nikkei trades generally flat; TOPIX Machinery index rises on better than expected machine orders data

- Softbank weighed down by regulatory concerns about Sprint/T-Mobile merger

- Tesla rose in afterhours trading as it held its annual shareholders meeting

- Oil prices decline over 1% during Asian trading amid API oil inventories and comments from UAE Oil Min

- China CPI accelerates on higher fruit and pork prices; Analysts note core inflation remains ‘low’

- PBoC uses 28-day reverse repo amid focus on China’s interbank market, prior gov’t takeover of Baoshang Bank

- HKD and HK money market rates rise amid protests, nothing seen regarding any currency intervention; Some have noted possible cash hoarding by banks ahead of quarter end

- KRW declines after comments from BoK Gov Lee, Lee later asked reporters not to over-interpret his remarks

- Australia consumer confidence declines despite easing by RBA, deepening economic concerns noted

- Aussie declines ahead of upcoming key data out of Australia and China

- Aussie May labor market data due on Thursday

- Japan Economy Min Motegi and USTR Ligthizer are expected to meet on Thursday (June 13th)

- China’s key May data (including industrial production) due for release on Friday


Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.2%

- (NZ) New Zealand May Total Card Spending M/M: 0.2% v 0.4% prior; Retail Card Spending M/M: -0.5% v 0.5%e

- (AU) Reserve Bank of Australia (RBA) Assist Gov Kent makes no comments on monetary policy at the Australian Renminbi Forum Melbourne

- (AU) Australia Jun Westpac Consumer Confidence Index: 100.7 v 101.3 prior; m/m: -0.6% v +0.6% prior (first decline since March)

- (AU) Australia Regulator APRA: to revise some proposals related to bank capital requirements; covers credit cards, personal car loans, and mortgages


- Nikkei 225 opened -0.4%

- (JP) In a Nikkei Op Ed analysts speculate that a "Cold War 2.0" between China and the US could end Japan's economic stagnation and deflation

- 7201.JP Two leading proxy advisory firms,Glass Lewis and Institutional Shareholder Service, urge shareholders to vote against reappointment of CEO Saikawa at AGM June 25th – Nikkei

- (JP) JAPAN APR CORE MACHINE ORDERS M/M: +5.2% V -0.9%E; Y/Y: +2.5% V -5.3%E

- (JP) Japan May PPI (CGPI) M/M: -0.1% v 0.0%e Y/Y: 0.7% v 0.7%e

- (JP) Japan PM Abe: Will exchange options with Iran leaders to ease tensions - comments ahead of trip June 12-14


- Kospi opened flat

- (KR) US President Trump: received a "beautiful" and "very warm" letter Monday from North Korean leader Kim

- (KR) Bank of Korea (BOK) Gov Lee: Will make appropriate policy response to economic changes; BOK needs to prepare various policy scenarios for timely response - prepared statement to mark the central bank’s 69th anniversary

- (KR) South Korea Fin Min Hong: BOK Gov Lee remark hints at policy easing

- (KR) South Korea May Unemployment Rate: 4.0% v 4.1%e v 4.1% prior

China/Hong Kong

- Hang Seng opened -0.7%; Shanghai Composite opened -0.3%

- (CN) CHINA MAY CPI M/M: 0.0% V 0.0%E; Y/Y: 2.7% V 2.7%E (y/y fastest pace since early 2018); Food price CPI y/y: 7.7% v 6.1% prior

- (CN) Pres Trump: reiterates that China wants to make a trade deal 'very badly', will not do China deal unless it's a great deal

- (CN) China National Development and Reform Commission (NDRC), Industry Ministry and the natural resources ministry launch survey of rare earth in seven regions - Xinhua

- (CN) China May retail vehicle sales 1.61M, -12.5% y/y (12th consecutive decline)

- (HK) Hundreds of demonstrators said to storm road near government offices amid protests about extradition bill – financial press

- (CN) China PBoC Open Market Operation (OMO): Injects combined CNY35B in 7-day and 28-day reverse repos v CNY10B in 7-day prior; Net CNY25B drain v CNY50B drain prior

- (CN) China PBoC sets yuan reference rate: 6.8932 v 6.8930 prior

- (HK) Hong Kong legislature to reschedule today's meeting (was supposed to vote on extradition to China bill)

Other Asia

- (IN) In India there are so many unsold cars in India now that 7 of the 10 automakers in India are taking forced holidays - press

- (SG) Singapore Central Bank (MAS) June Economist Survey: Cut 2019 GDP outlook to 2.1% (prior 2.5%); sees 2020 GDP at 2.3%

- (SG) Singapore Apr Retail Sales M/M: 0.5% 1.8%e; Y/Y: -1.8% v -0.2%e

North America

- TSLA CEO Musk: There is a good shot for a record quarter; Model 3 is outselling competitors, no issues with demand; expect to reach volume product by the end of the year - annual meeting comments

- (US) Weekly API Oil Inventories: Crude: +4.9M v +3.5M prior

- UAE Energy Min (OPEC president) Mazrouei: OPEC+ is very close to an agreement extension; it's 'not a challenge' to reach a deal

- (MX) Mexico Foreign Min Ebrard: Have 45 days to show safe third country deal not needed; US wants third country deal discussed if measures fail; reiterates there is no secret agreement


- (CH) EU's Juncker: Swiss framework agreement will NOT be renegotiated

- (UK) UK Brexit Minister Barclay says he supports Boris Johnson in the PM leadership race - UK Press


Levels as of 1:20 ET

- Nikkei 225, -0.2%, ASX 200 +0.1%, Hang Seng -1.8%; Shanghai Composite -0.6%; Kospi -0.2%

- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.4%; FTSE100 -0.3%

- EUR 1.1335-1.1325 ; JPY 108.58-108.43 ; AUD 0.6964-0.6948 ;NZD 0.6589-0.6568

- Gold +0.4% at $1,336/oz; Crude Oil -1.5% at $52.46/brl; Copper -0.1% at $2.666/lb

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