BOJ minutes mostly reiterating comments on CPI

General trend

- Risk on as the markets kick off a new week in the green heading into quarterly close, US futures also higher.

- China starts reopening indoor dining in, Shanghai, schools to open in Beijing and Dandong reopens after week long lockdown.

- On the negative side Macau noted rising covid cases, which is leading to extended restrictions, and requirements to enter casinos (though casino names continue to trade strong). A heatwave across the region weighs on energy grids.

- Currencies mixed USD stronger against the commodity currencies, while Yen rose to 135.23. EUR/USD held little changed.

- Russia fails to meet Sunday deadline to pay foreign debt (after a 30 day grace period), leading to its first default since 1917. Russia however, claims it is not really a default, it has the funds but due to sanctions can’t get them to where it needs.

- Japan heatwave brining the Govt to offering incentives for people to cut their power usage.

- WTI crude futures declined at the start of the session before reversing and rising as high as $108.34, continued to bounce around heading into mid-session.

- BOJ minutes mostly reiterating comments on CPI.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.4%.

- EVN.AU Cuts FY22 gold production ~640K oz (prior~650K oz); Raises AISC to A$1,250 (prior A$1,135-1,195/oz); Gives FY23/24 outlook.

- MTS.AU Reports FY22 (A$) Underlying Net 299.6M v 252.7M y/y; Rev 15.2B v 14.3B y/y (+5%).

- LNK.AU Dye and Durham cuts offer 22% to A$4.30/shr (prior A$5.50/shr), does not intend any additional amendments or alterations.

- IMU.AU Presents Final HER-Vaxx Overall Survival Results in Randomized Phase 2 Trial in Advanced Gastric Cancer (+15%).

- (AU) Australia sells A$600M v A$600M indicated in 1.75% Jun 2051 bonds; Avg Yield: 3.835% v 3.7995% prior; bid-to-cover: 1.55x v 2.56x prior.

Japan

- Nikkei 225 opened +0.9%.

- (JP) Japan farmers under pressure as weakening yen making importing corn to feed animals more expensive – press.

- 4503.JP FDA puts on hold the FORTIS Clinical Trial of AT845 in Adults with Late-Onset Pompe Disease.

- (JP) Bank of Japan (BOJ) Q1 JGB ownership: 48.2% v 48.0% prior; Foreign investors held 13.6% of JGBs including bills v 14.4% prior; BOJ govt bond holdings including bills was 43.3% v 43.4% prior.

- (JP) Bank of Japan (BOJ) June Summary of Opinions: CPI y/y change has been ~2.0% due to food and energy changes; Upward pressure on yields likely to stay.

- (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 Dep Chief Cabinet Sec Isozaki: Ask for people to cut back on energy use while being mindful of the heat; Planning to provide ¥2.0K point incentive to households that cut energy use.

Korea

- Kospi opened +0.7%.

- (KR) South Korea, Japan and US finalize plans for summit on sidelines of NATO on June 29th – Yonhap.

- (KR) North Korea condemned "aggressive moves" by the US and South Korea and vowed to take revenge during its marked the 72nd anniversary of Korean War (update Jun 25).

China/Hong Kong

- Hang Seng opened +1.2%; Shanghai Composite opened +0.4%.

- (HK) Macau to extend the suspension of public sector activities, except for emergency services, until at least July 1; negative covid tests required to enter casinos; 3rd round of mass testing to take place.

- (CN) Shanghai, China finds 4 new covid cases June 26th (2 outside of quarantine), but will gradually resume indoor dining; Beijing 4 new cases and is reopening schools for the first time since May; Dandong city began opening from a week long lockdown.

- (CN) China PBOC signs an agreement with the Bank for International Settlements (BIS) to establish a Renminbi Liquidity Arrangement (RMBLA) - financial press.

- (CN) China PBOC sets Yuan reference rate: 6.6850 v 6.7000 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY100B in 7-day reverse repos v CNY60B prior; Net inject CNY90B v Net inject CNY50B prior.

- (CN) China May Industrial Profits Y/Y: -6.5% v -8.5% prior (2nd consecutive decline); NBS: Industrial companies still facing rising cost pressures.

- (CN) China has requested that banks make preparations for longer trading hours for the CNY; Onshore CNY trading may extend until 3AM Local time following day - press.

Other

- (EC) Ecuador Energy Ministry: Oil production could stop in 48 hours amid escalating protests; Ecuador President Lasso: To use army and police to restore peace.

- 2330.TW To sell NT$13.9B in 4 tranche bond offering.

Europe

- (RU) Russia defaults on foreign debt for the first time since the 1917 Bolshevik Revolution, (grace period ended Jun 26th).

- (IE) Ireland Jun Economic Pulse: 78.8 v 82.7 prior.

- (EU) EU Commission President Von der Leyen:Europe must give developing nations alternative to funds from China, announces launch of counter to Belt and Road project from China – press.

- (G7) This week at G7,leaders’ summit, are expected to ban gold imports from Russia, pledge indefinite support to Ukraine, talk about a price cap on crude from Russia; will also discuss forced labor in China and intellectual property theft, and funding alternative to Belt & Road - press.

Levels as of 01:00EST

- Hang Seng +2.8%; Shanghai Composite +1.0%; Kospi +2.1%; Nikkei225 +1.6%; ASX 200 +2.0%.

- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.6%, Dax +0.3%; FTSE100 +0.1%.

- EUR 1.0575-1.0550; JPY 135.23-134.52; AUD 0.6959-0.6907; NZD 0.6327-0.6298.

- Commodity Futures: Gold +0.4% at $1,837/oz; Crude Oil -0.1% at $107.56/brl; Copper +1.3% at $3.79/lb.