Markets pare some of losses amid action from Turkey

Asia Market Update: Lira and emerging market currencies remain under pressure: Markets pare some of losses amid action from Turkey

General Trend:

- Asian equity markets trade generally lower amid continued declines in the Turkish Lira (TRY)

- Shanghai Composite Property index drops over 1%

- Yen (JPY) trades broadly firmer as equities decline

- South African Rand (ZAR) hits 2-year low, EM and Asian currencies trade broadly weaker

- Emerging market bond yields rise

- China PBoC continues to elect not to drain liquidity, skips open market operation for 17th straight session

- Singapore revised Q2 GDP growth lower

 

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened -0.2%

- ASX 200 Resources index -1%, REIT -0.9%, Consumer Discretionary -0.7%, Financials -0.5%

- (AU) Australia sells A$400M v A$400M indicated in 2037 bonds, avg yield 2.867%, bid to cover 2.2x

- (NZ) New Zealand Jul Performance of Services Index: 55.1 v 52.8 prior

China/Hong Kong

- Shanghai Composite opened -0.9%, Hang Seng -1.4%

- Hang Seng Services index -3.7%, Materials -3%, Property/Construction -2.6%, Industrial Goods -2.6%, Info Tech -2.6%, Energy -2.2%, Telecom -1.9%, Financials -1.7%

- (CN) China July New Yuan Loans (CNY): 1.45T v 1.225Te

- (CN) CHINA PBOC SETS YUAN REFERENCE RATE: 6.8629 V 6.8395 PRIOR (weakest CNY fix since May 2017)

- (CN) China PBoC Open Market Operation (OMO): Skips open market operation (17th straight skip)

- (CN) China PBOC Q2 monetary policy report: reiterates PBOC has maintained a 'prudent' and 'neutral' monetary policy (released on Aug 10th)

Japan

- Nikkei 225 opened -0.8%

- TOPIX Marine Transportation index -3.4%, Electric Appliances -2.5%, Iron & Steel -2.4%, Securities -2.2%, Info & Communications -1.6%, Real Estate -1.3%, Retail Trade -1%

- Automakers trade broadly lower as yen strengthens

- Megabanks track recent declines in European financials

- (JP) Japan confirmed plan to raise the minimum wage by ¥26 to ¥874/hour, approx. 3% increase; cites labor shortage – Japanese Press

Korea

- Kospi opened -0.7%

- (KR) South Korea End-July Foreign Net Investment in Local Bonds (KRW): +1.44T v +2.1T m/m

- (KR) Bank of Korea (BoK) sells KRW1.22T in 1-year monetary stabilization bonds (MSBs); yield 1.83%

Other

- (SG) SINGAPORE Q2 FINAL GDP Q/Q: 0.6% V 1.4%E; Y/Y: 3.9% V 4.0%E

- Moody’s: July Asia Liquidity Stress Indicator: 32.7% v 30.9% m/m

North America

-Nielsen [NLSN]: Elliott said to acquire over 8% stake - US financial press

Europe

- (TR) TURKEY CENTRAL BANK (CBRT) CUTS RESERVE REQUIREMENT RATIO (RRR) BY 250BPS FOR ALL MATURITIES

- (TR) Turkey Finance Min Berat Albayrak said government has ‘action plan’ on currency – Local Media

- (TR) Turkey Banking Regulator: Limits swap transactions

- (TR) Turkey Presidency Communication Head: Reiterates President Erdogan did not talk about potential foreign FX deposits seizure

- (RU) On Sunday, Russia Fin Min Siluanov said Russia will further cut its holdings of US securities in response to new sanctions; has no plans to shut down US companies – RIA

- (GR) Fitch raises Greece sovereign rating two notches to BB- from B; outlook Stable (from Aug 10th)

 

Levels as of 01:30ET

- Nikkei 225, -1.5%, ASX 200 -0.4%, Hang Seng -1.4%; Shanghai Composite -1.3%; Kospi -1.4%

- Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.7%; FTSE100 -0.5%

- EUR 1.1412-1.1365 ; JPY 110.76-110.10 ; AUD 0.7301-0.7262 ;NZD 0.6595-0.6562

- Aug Gold -0.3% at $1,215/oz; Sept Crude Oil flat at $67.62/brl; Sept Copper -0.5% at $2.732/lb