CN property market and growth concerns remain in focus

Asia Market Update: Chinese property and bank indices extend declines; CN property market and growth concerns remain in focus; China data was mixed.

General trend

- China traded metals move sharply lower on growth and property market worries.

- USD trades mixed ahead of upcoming US data [including retail sales].

- Equity markets trade mixed; Chinese and Australian indices lag.

- Financials decline amid US bank earnings, China concerns.

- Shanghai Property index drops over 4% amid mortgage payment boycott concerns; China’s new home prices also continue to fall.

- Chinese Consumer indices supported by better retail sales.

- Hang Seng Tech index again weighed down by regulatory concerns [Alibaba].

- Nikkei 225 outperforms after results from Fast Retailing.

- Australian Resources index drops on China concerns; Rio Tinto declines after issuing quarterly production update.

- US equity FUTs rise.

- Taiwan Semi and Fast Retailing rise following earnings reports.

- Companies due to report during the NY morning include UnitedHealth, Wells Fargo, BlackRock, Citigroup, Bank of NY.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened -0.4%.

- (NZ) New Zealand Jun Manufacturing PMI: 49.7 v 52.6 prior (1st contraction in 10 months).

- (AU) Australia sells A$700M v A$700M indicated in 4.75% Apr 2027 bonds; Avg Yield: 3.1454% v 2.9758% prior; bid-to-cover: 3.99x v 3.29x prior [from May 20th].

Japan

- Nikkei 225 opened +0.3%.

- Toyota Motors 7203.JP Said to have delayed launch of Crown Sedan due to parts shortages - Nikkei.

- (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 Industry Minister: Aiming to have 9 nuclear reactors ready by winter due to adjusting construction and inspection time frames.

Korea

- Kospi opened +0.3%.

- Hynix 000660.KR Said to consider cutting CAPEX by up to 25% to KRW16.0T for 2023; notes slower demand for electronics - Press.

- (KR) South Korea President Yoon: Calling for pre emptive measures against spreading financial risks.

- (KR) South Korea President Yoon approval rating 32% v 37% prior - Gallup poll.

China/Hong Kong

- Hang Seng opened -1.1%; Shanghai Composite opened -0.6%.

- (CN) China Q2 GDP Q/Q: -2.6% V -2.0%E (Slowest since Q1 2020); Y/Y: 0.4% V 1.2%E.

- (CN) China Jun YTD Residential Property Sales Y/Y: -31.8% v -34.5% prior.

- (CN) China Jun industrial production Y/Y: 3.9% V 4.1%E; YTD Y/Y: 3.4% V 3.5%E.

- (CN) China Jun Surveyed Jobless Rate: 5.5% v 5.7%e.

- (CN) China Jun Retail Sales Y/Y: 3.1% V 0.3%E; YTD Y/Y: -0.7% V -1.2%E.

- (CN) China Jun YTD property investment Y/Y: -5.4% V -4.2%E.

- (CN) China Jun fixed urban assets YTD Y/Y: 6.1% V 6.0%E.

- (CN) China June electricty consumption 745.1B KWh, +4.7% y/y; Production 709.0B KWh, +1.5% y/y.

- (CN) China Securities Daily expects foreign purchases of A-shares to increase during H2; notes economic recovery in China, market liquidity conditions - China Press.

- (CN) China National Bureau of Statistics (NBS): Downward pressure on the domestic economy rose substantially during Q2; Foundation for sustained economic recovery is 'not solid'; Challenges in achieving full year GDP target.

- (CN) China conducts CNY100B VS. CNY100B maturing in 1-year medium-term lending facility (MLF) AT 2.85% VS. 2.85% prior.

- (CN) China Jun NEW HOME PRICES M/M: -0.1% V -0.2% PRIOR (10TH STRAIGHT DECLINE); Y/Y: -0.5% V -0.1% PRIOR.

- (CN) Shanghai reports 45 coronavirus cases v 47 prior, 0 outside of quarantine; Adds 30 high to Mid risk areas to lockdown.

- (HK) Hong Kong buys HK$5.3B to defend currency peg.

- (CN) China PBOC sets Yuan reference rate: 6.7503 v 6.7265 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY3.0B in 7-day reverse repos v CNY3.0B prior; Net CNY0B v Net CNY0B prior.

- (CN) China Foreign Min Wang Yi: Relations with Australia face challenges and opportunities, China willing to re calibrate relations in spirit of mutual respect.

- (CN) Zhuhai has halted quarantine hotel bookings for visitors from Macau - Press.

North America

- (US) Senator Manchin (D-WV): Will not support any new climate spending or tax increases - WaPo.

- Amazon [AMZN]: Said to be considering closing private label business due to regulatory and weak sales reasons - Financial Press.

Europe

- (EU) Reportedly EU readying to raise Ukraine weapons financing to €2.5B - press.

- (IT) Italy president rejects PM Draghi's resignation; Asks Draghi to address parliament to 'gauge political situation' - Italian press.

- *(IT) Italy PM Draghi to resign; Five Star Party's non-participation in confidence vote 'was very significant from a political point of view' - statement.

Levels as of 01:20 ET

- Nikkei 225, +0.6%, ASX 200 -0.8% , Hang Seng -1.7%; Shanghai Composite -0.5% ; Kospi +0.1%.

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

- EUR 1.0041-1.0011 ; JPY 139.12-138.76 ; AUD 0.6765-0.6726 ;NZD 0.6144-0.6083.

- Gold +0.1% at $1,706/oz; Crude Oil +0.5% at $96.25/brl; Copper -1.5% at $3.1795/lb.