BOE rate decision due later today

Asia Market Update: Directionless equity trading in Asia after similar US session; Korea 3-yr yield rises on BOK comment; BOE rate decision due later today.

General Trend

- Nikkei 225 has moved flat after the lower open [Automakers trade generally higher with USD/JPY near 15-month high; Topix Air Transportation index lags].

- S&P ASX 200 has extended decline [Energy and Financial indices continue to move lower; Consumer Staples and Resources indices rise]; Woolworths declines as Endeavour spin-off started trading.

- Shanghai Composite ended morning trading modestly lower (-0.2%) [Decliners included IT and Consumer indices; Property and Industrial indices rose].

- Hang Seng has pared the opening gain.

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened flat.

-(AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$273Bv A$267.3B prior (record high).

-(AU) NAB still sees 2024 RBA rate hike as more likely; says there is a probability of the RBA hiking in late 2023 - US financial press.

-(NZ) New Zealand sells NZ$300M v NZ$300M indicated in 2026, 2031, and 2033 nominal bonds.

China/Hong Kong

-Hang Seng opened +0.2%, Shanghai Composite +0.1%.

-(CN) China PBOC Open Market Operation (OMO): Injects CNY30B in 7-day reverse repos v CNY10B in 7-day reverse repos prior [first increase in reverse repo injection since Mar 2021]; Net inject CNY20B v Net CNY0B prior.

- (CN) China Banking and Insurance Regulatory Commission (CBIRC): Expects Monthly PPI to hit 10% in June, which will add pressure to consumption.

- (CN) US will reportedly ban some solar goods from Xinjiang, China - press (as earlier reported).

-(CN) China PBOC sets Yuan reference rate: 6.4824 v 6.4621 prior.

-(CN) China PBOC sells CNY5B in 6-month bills in Hong Kong, coupon: 2.54% v 2.70% prior.

- Evergrande Real Estate [3333.HK]: Arranged HK$13.6B ($1.75B) in funds to repay bonds due June 28th (Monday); No further bond repayments until Mar 2022.

Japan

-Nikkei 225 opened -0.2%.

-(JP) Japan May PPI Services Y/Y: 1.5% v 1.5%e.

-(JP) Japan said to have not spent ~40% (~¥30T) of extra budget compiled since beginning of coronavirus pandemic - Nikkei.

-(JP) Japan said to be appointing Koji Yano as Vice Fin Min - Nikkei.

- (JP) Japan MoF sells ¥1.2T v ¥1.2T indicated in 0.500% 20-year JGBs, avg yield: 0.4330% v 0.4450% prior, bid to cover 3.62x v 3.48x prior.

Korea

-Kospi opened +0.2%

- (KR) Bank of Korea (BOK) Gov Lee: CPI expected within 2.0% during 2022; Has said normalization should begin this year (2021); Rate hike and normalization is not tightening; BOK clearly said orderly normalization will begin this year.

-(KR) South Korea Jun Consumer Confidence: 110.3 v 105.2 prior.

Other Asia

-Taiwan Semi: Said to raise prices for 8-inch and 12-inch wafers by as much as 20% next year (2022); cites strong demand -press.

North America

- (US) Fed's Bostic (FOMC voter, hawk): Fed is close to meeting the standard for bond-buying tapering; it is fully appropriate to debate taper prospects; tapering decision could be in 3 to 4 months; Sees two additional rate hikes in 2023; has moved forward expectation of the first-rate hike to late 2022.

- (US) Fed's Bowman (voter): high inflation may take 'some time' to ease; will monitor inflation closely and adjust policy views as needed; There is more to the recent rise in inflation than just measurement issues.

- (US) US Senate Infrastructure framework said to have been revised to $559B in new spending; Lawmakers are expected to meet with President Biden on Thurs.(Jun 24th) - US financial press.

- (US) Senator Manchin (D-WV): Bipartisan group and White House have agreed on a framework for bipartisan infrastructure investment plan; Plan will be financed with a long list of measures to offset costs.

- (US) Senator Collins (R-ME): There are still details of the infrastructure framework to resolve.

- (US) Senator Portman (R-Ohio): IRS enforcement on new infrastructure bill underpay for discussion being worked out.

Levels as of 01:20 ET

- Nikkei 225, -0.1%, ASX 200 -0.4% , Hang Seng +0.1%; Shanghai Composite -0.2% ; Kospi +0.2%.

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

- EUR 1.1933-1.1919 ; JPY 111.11-110.94 ; AUD 0.7581-0.7566 ;NZD 0.7056-0.7029.

- Gold -0.5% at $1,775/oz; Crude Oil +0.1% at $73.14/brl; Copper -0.8% at $4.2823/lb.