Asia Market Update: Cautious and mixed trading seen before US Fed decision [Jul 27th]; Walmart’s guidance weighs on US retailers; AUD rises ahead of Wed CPI release.

General trend

- Quiet session seen for AU bonds ahead of inflation data.

- KRW rises following GDP beat.

- CN and HK markets outperform.

- Chinese property developers extend gains after the recent gov’t support talk; Iron Ore FUTs also continue to rise.

- HK TECH index supported by Alibaba listing news.

- Japanese equities traded mixed during the morning session.

- Canon Inc. to report results after the Tokyo close.

- US equity FUTs trade modestly lower after Walmart news.

- Logitech continues to cut guidance.

- Hynix due to report results on Wed [Jul 27th].

- Companies due to report during the NY morning include Coca-Cola, McDonald’s, UPS, Raytheon Technologies, MMM, GE, Moody’s, General Motors, Kimberly-Clark, Archer-Daniels Midland, MSCI, Corning, PulteGroup, Yandex, Polaris Industries, Xerox.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.2%.

- MLD.AU Receives A$1.025/shr Takeover offer from Thiess, Board unanimously recommends offer absent superior bid.

- (NZ) New Zealand Treasury has started payments to the Reserve Bank of New Zealand (RBNZ) for losses on bonds purchased during quantitative easing.

- (NZ) NZ National Party [opposition] wants public inquiry related to how the Reserve Bank of of New Zealand (RBNZ) responded to the pandemic; Former RBNZ Gov Wheeler said central banks are to blame for inflation - press.

- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr responds to Former RBNZ Govt Wheeler's criticism of monetary policy, saying central banks were responsible for inflation.

Japan

- Nikkei 225 opened -0.1%.

- (JP) Bank of Japan (BOJ) Jun Minutes (two decisions ago): Members shared view BOJ must support economy, which is under pressure from rising commodity prices.

- (JP) Japan Jun PPI Services Y/Y: 2.0% v 2.0%e.

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].

- (JP) Japan Fin Min Suzuki returns to duties today, after 2 negative covid tests.

- 4324.JP Prosecutors said to have searched headquarters on payments to a board member relating to the 2020 Olympics - Japan Press.

- (JP) Japan MoF sells ¥700B v ¥700B indicated in % 40-year JGBs, Yield at lowest accepted price: 1.3450% v 1.0700% prior; bid-to-cover: 2.70x v 2.42x prior.

- (JP) Bank of Japan (BOJ) Board member Takata: Able to maintain easy monetary policy but facing challenges (yesterday after the close).

Korea

- Kospi opened -0.3%.

- (KR) South Korea Q2 preliminary GDP Q/Q: 0.7% V 0.4%E; Y/Y: 2.9% V 2.6%E.

- (KR) South Korea Fin Min Choo: Inflation to peak in either Sept or Oct (yesterday after the close).

China/Hong Kong

- Hang Seng opened +0.6%; Shanghai Composite opened +0.1%.

- (HK) Hong Kong Fin Sec Chan: May need to cut 2022 GDP outlook for the second time in 3 months due to the latest 5th wave of covid – SCMP.

- (CN) Shanghai adds 10 additional high and medium risk areas to lockdown.

- (HK) Hong Kong Fin Min: Hong Kong will not decouple the HKD from the USD.

- (HK) Hong Kong Monetary Authority (HKMA): CNY10B intra day fund quota used up as of 03:00 GMT (2nd consecutive day).

- (CN) China PBOC sets Yuan reference rate: 6.7483 v 6.7543 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY5.0B in 7-day reverse repos v CNY5.0B prior; Net drain CNY2.0B v Net drain CNY7.0B prior.

- (CN) China Sec Daily: China PBOC has a bigger focus on rates than sizes of Open Market Operations (OMO).

- 9988.HK Seeking primary listing on the HKEX, will be dual primary listed on NYSE; Expects completion by end of 2022 [currently has a secondary listing on the HK Exchange].

- (CN) China fashion e-commerce co, Shein, said that shareholders are looking at bids for their stakes at ~30% discount to $100B valuation given in April, speculation could delay an IPO - SCMP.

- (CN) China NDRC initiating interministerial meeting mechanism will allow top officials from 20 govt bodies to communicate about their policies on the digital economy; Seen as a sign that the govt will focus on support and development and not further crackdowns - press.

Other

- (PH) Philippines Central Bank (BSP) Gov Medalla: This year will not return to 2-4% inflation target; Monetary policy still supportive of growth.

North America

- WMT Cuts Q2 and FY23 guidance; Primarily due to pricing actions aimed to improve inventory levels at Walmart and Sam’s Club in the US and mix of sales.

- (US) Pres Biden: Expects to speak with China Pres Xi this week.

- PKG Reports Q2 $3.23 v $2.87e, Rev $2.24B v $2.13Be; Raising paper product prices by an added $60/ton.

Europe

- UBSG.CH Reports Q2 Net $2.11B v $2.0B y/y, Adj PBT $2.61B v $2.6B y/y, Rev $8.92B v $8.98B y/y; to continue buyback as planned.

- AMZN To raise Amazon Prime subscription prices by 20% or more in Europe effective Sept 15th.

Levels as of 01:15ET

- Hang Seng +1.6%; Shanghai Composite +0.8%; Kospi +0.4%; Nikkei225 -0.1%; ASX 200 +0.3%.

- Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.1%; FTSE100 -0.0%.

- EUR 1.0250-1.0216; JPY 136.70-136.29; AUD 0.6983-0.6949; NZD 0.6281-0.6255.

- Commodity Futures: Gold +0.1% at $1,720/oz; Crude Oil +1.3% at $97.96/brl; Copper +1.6% at $4.42/lb.

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