Asia Market Update: Equity markets trade generally higher; Taiex rallies as Pelosi’s Asia trip nears its conclusion; US jobs data due later on Fri.

General trend

- Chinese military drills continue (as expected); Taiwan’s Defense Ministry issued statement.

- RBI hiked by more than expected.

- Hang Seng lags after results from Alibaba.

- Nikkei 225 rebounded from the opening decline.

- Japanese companies expected to report earnings include Isuzu, Sharp, Suzuki Motor, Yamaha Motor, Mitsubishi Estate, NTT Data; Insurers to also report.

- China Jul Trade data in focus [Aug 6-7th].

Headlines/Economic data

Australia/New Zealand

-ASX 200 opened flat.

- (AU) RESERVE BANK OF AUSTRALIA (RBA) STATEMENT ON MONETARY POLICY (SOMP): Downgrades outlook for economic growth, revises inflation forecasts higher.

- (AU) Australia July AIG Services Index: 51.7 v 48.8 prior (1st expansion in 3 months).

- (AU) Australia sells A$700M v A$700M indicated in 4.75% Apr 2027 bonds: Avg Yield: 2.8527%; bid-to-cover 3.14x.


-Nikkei 225 opened -0.1%.

- (JP) Japan PM Kishida: Demanded China immediately stop military drills, lodged a protest over missiles in EEZ.

- (JP) Japan Jun Labor Cash Earnings Y/Y: 2.2% v 1.9%e; Real Cash Earnings Y/Y: -0.4% v -1.3%e.

- (JP) Japan Jun Household Spending Y/Y: 3.5% v 1.5%e.

- (JP) Japan July FX Reserves $1.32T v $1.31T prior.

- (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: To continue to look to Australia for a stable LNG supply despite announced export restrictions.

- (JP) Japan Chief Cabinet Sec Matsuno: China calling off the foreign minister meeting is regrettable.

- (JP) Japan Fin Min Suzuki: Need to closely scrutinize spending in FY23 budget; Responsible economic and fiscal policy is important.

- (JP) Japan Jun Preliminary Leading Index CI: 100.6 v 101.2 prior; Coincident Index: 99.0 v 94.9 prior.


-Kospi opened +0.3%.

- (KR) South Korea Jun Current Account (BOP): $5.6B v $3.9B prior; Balance of Goods (BOP): $3.6B v $2.7B prior.

- (KR) South Korea President Yoon approval falls to 24% from 28% prior - Gallup.

- (KR) South Korea Foreign Min Park to visit China Aug 8-10th.

China/Hong Kong

-Hang Seng opened +0.5%; Shanghai Composite opened +0.2%.

- (CN) China PBOC sets Yuan reference rate: 6.7405 v 6.7636 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY2.0B in 7-day reverse repos v CNY2.0B prior; Net CNY0B v Net CNY0B prior.

- (CN) China Premier Li Keqiang: Keeping unemployment rate below 5.5% and inflation under 3.5% could allow to tolerate a slightly lower growth rate - financial press.

- (CN) Certain cities in China said to have tightened rules related to the escrow accounts of property cos. - Chinese press.

- (CN) Henan Province Financial Regulators: To begin next round of rural bank repayments starting Aug 8th; to repay scam victims with deposits of up to CNY250K.

- (CN) Follow Up: Bengbu Financial regulators announce repayments to bank clients who were victims of bank scams starting Aug 8th.

- (CN) China Ministry of Finance (MOF) Sells 3-month and 6-month bills.

- (HK) China Zuhai province restricts entry into area from Macau for those who have recovered from Coronavirus.


- (TW) Taiwan Defense Ministry: China actions are arbitrarily destroying world most frequently used waterways.

- Pegatron (4938.TW) Shipments to factory in China said to have been disrupted after CEO met with US House Speaker Pelosi.

- (TW) Taiwan Defense Ministry:: Multiple China ships and aircraft crossed the median line on Aug 5th.


- (IN) India Central Bank (RBI) Gov Das: Domestic economy impacted by global situation; fundamentals are strong and resilient - pre-rate decision press conference.

North America

- (US) House Speaker Pelosi: Have said from the beginning that representation is not on changing status quo in Indo Pacific or Taiwan, we had positive meetings in Taiwan on security and governance.

- TSLA Results of shareholder vote: Approve 1:3 stock split, Vote Against proposals that require annual reports on anti-harassment and discrimination efforts by company.

- CEO Musk: Expects Tesla will ultimately have 10-12 gigafactories; Interested in acquiring companies in manufacturing tech and AI; Share buyback possible depending on future cash flow - annual meeting.

- (US) Said that US Democrats are considering adding a stock buyback to the budget proposal - Press; (US) Follow Up: Senate Democrats add a stock buyback tax to the budget bill.

- (US) Senator Sinema (D-AZ) Agrees to remove the carried interest tax provision, to move forward subject to review by senate Parliamentarian.

- (US) Statement from President Biden on the Inflation Reduction Act: Look forward to the Senate taking up this legislation and passing it as soon as possible.


- (EU) Foreign Policy Chief Borrell: China and Russia will be part of a final Iran deal.

Levels as of 01:20 ET

- Nikkei 225, +0.8%, ASX 200 +0.5% , Hang Seng -0.2%; Shanghai Composite +0.1% ; Kospi +0.8%.

- Equity S&P500 Futures: +0.2%; Nasdaq100 +0.3%, Dax +0.2%; FTSE100 +0.1% - EUR 1.0230-1.0252 ; JPY 132.64-133.48 ; AUD 0.6953-0.6974 ;NZD 0.6284-0.6306.

- Gold +0.1% at $1,808/oz; Crude Oil +0.6% at $89.03/brl; Copper +1.1% at $3.5127/lb.

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