Equities trade generally lower after weaker US session

Asia Market Update: Equities trade generally lower after weaker US session; HSI outperforms after lagging on Thurs, HK TECH index remains volatile; TSM expected to report Jun/Q2 sales.

General trend

- US equity FUTs have remained modestly lower.

- Financials trade generally lower amid decline in 10-year gov’t bond yields.

- Nikkei 225 is off of the session lows, index had declined by over 2.4% [Export sensitive cos. decline after recent drop in USD/JPY; Softbank weighs on the Topix Information and Communication index; Marine Transportation index drops >4%].

- Shanghai Composite declined during the morning session [Consumer Staples and Liquor names underperform; Other decliners included Financials, Industrials and IT; Materials index supported by guidance from Wanhua Chemical].

- Hang Seng has moved between gains and losses [TECH index has remained volatile].

- S&P ASX 200 has dropped over 1.4% [Financials decline; Consumer indices drop amid more strict virus measures in Sydney].

- Nanya Technology may report earnings later today.

- UST yields rise in Asia after prior decline.

- AUD and NZD extend declines amid lower yields and drop in equities.

- Companies due to report during the NY morning include Greenbrier.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened flat.

- (AU) New South Wales Premier: Sydney has imposed stricter coronavirus measures in already locked down areas.

- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$329.7B v A$328.1B prior (record high).

- (NZ) New Zealand Jun ANZ Truckometer Heavy M/M: +1.2% v -6.2% prior.

- (NZ) Reserve Bank of New Zealand (RBNZ) offers to buy a total of NZ$200M in government bonds next week under QE program v NZ$200M prior.

China/Hong Kong

- Hang Seng opened -0.1%, Shanghai Composite -0.4%.

-*(CN) CHINA JUN CPI M/M: -0.4% V 0.0%E; Y/Y: 1.1% V 1.3%E; PPI Y/Y: 8.8% v 8.8%e.

- (CN) Said that the US is set to add additional China companies to Blacklist due to human rights issues in Xinjiang and use of surveillance, could make announcement on July 9th (Fri); at least 10 additional cos. could be added to the list [no specific cos. were mentioned] - financial press.

- (CN) China Ministry of Commerce (MOFCOM): Expects retail sales during 5-year plan to increase ~5.0% per year; Trade and goods ~2.0%/year; To explore setting up trade friction comprehensive pilot zone; To improve unreliable entity list system.

- (CN) China's Cyberspace Administration which reports directly to Chinese President Xi Jinping, will be in charge of policing overseas listings going forward – WSJ.

- (CN) China Banking Regulator (CBIRC) says internet fees are leading to higher financing costs - Chinese press.

- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net CNY0B prior.

- (CN) China PBOC sets Yuan reference rate: 6.4755 v 6.4705 prior.

- (CN) China Ministry of Finance (MOF) Sells 3-month bills and 30-year bonds: Sells 30-year bonds: avg yield 3.5736% v 3.55%e.

Japan

- Nikkei 225 opened -1.4%.

 - (JP) Nikkei 225 Jul Options to settle at 27,726.

- (JP) Japan Jun M2 Money Supply Y/Y: 5.9% v 6.0%e; M3 Money Supply Y/Y: 5.2% v 6.8% prior.

- (JP) BOJ seen cutting its FY21/22 (current year) GDP growth forecast at its upcoming quarterly update [due on Fri Jul 16th] - financial press.

- (JP) Japan PM Suga confirms new State of Emergency for Tokyo area; effective from July 12th thru Aug 22nd; always have economic stimulus in mind [from Jul 8th].

Korea

- Kospi opened -0.2%.

- (KR) South Korea reports 1,316 additional coronvirus cases (record high).

- (KR) South Korea said to be increasing social distancing in Capital Seoul to highest level [level 4] starting July 12th; the measures will be effective for 2 weeks - Press (In line).

- (KR) South Korea sells 50-year bonds: Avg yield 2.060% v 2.165% prior.

North America

- (US) NY Fed: Announces termination of commercial paper funding facility (CPFF).

Europe

- (UK) UK Treasury said to have insisted that Brexit settlement has remained within previous range of £35-39B - FT.

Levels as of 01:20 ET

- Nikkei 225, -0.7%, ASX 200 -1.4% , Hang Seng +1%; Shanghai Composite -0.3% ; Kospi -1.3%.

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

- EUR 1.1850-1.1834 ; JPY 109.96-110.08 ; AUD 0.7444-0.7409 ;NZD 0.6975-0.6922.

- Gold +0.2% at $1,802/oz; Crude Oil +0.1% at $73.00/brl; Copper +0.5% at $4.2893/lb.