Markets ponder direction ahead of Nvidia Q2 – Focus on AU July CPI tomorrow

General trend

- Quiet day in Asia as market continue to ponder the impact of US inflation and rates outlook amid a dearth of key data. Nvidia Q2 earnings during early Asia morning on Thurs 29th August likely to be the next potential catalyst.

- Nikkei was the only positive index in Asia, +0.5% in subdued trading throughout the region.

- Currencies overall up against USD, with the notable exception of the Yen, -0.3%, nearly touching 145.

- Australia FY24 earnings in full swing. BHP +2% on better than expected EBITDA and Revenues and the CEO highlighting “a lot of attractive growth ahead in copper”. Retailer Coles also +2% to a 2-year high on better than expected profits; Woodside Energy up nearly 4% despite lower revenues as the company announced positive progress on the Trion and Sangomar projects.

- ASX 200 Resources index +1.4%; Energy +2.5%, Consumer Discretionary -0.9% while Financials -1.0%.

- South Korea Finance Ministry guides 2025 bond sales to be more than 20% higher than last year. Sovereign 10-yrs +9bps to be back over 3%, while 3-yr corporate bond yields +3bps to 3.444%.

- China govt follows through on autonomous driving promises by issuing 16K test license plates and opening up 32K km of public test roads for testing purposes.

- US equity FUTs flat to slightly up during Asian trading.

Looking ahead (Asian time zone)

- Wed Aug 28th AU July CPI (Wed eve DE GfK Consumer Conf).

- Thu Aug 29th (Thu night DE prelim Aug CPI, US Q2 GDP 2nd est).

- Friday Aug 30th, JP July Industrial Production & Retail Sales, AU Retail Sales, JP Aug Consumer Conf (Friday eve various European prelim Aug CPI, Fri night India Q2 GDP, CA Q2 GDP, US Core PCE, Michigan Consumer Sentiment).

- Sat Aug 31st CN Aug National PMIs.

Holidays in Asia this week

- Mon Aug 26th Philippines.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.2% at 8,096.

- Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 82.6 v 83.0 prior.

- Australia sells A$100M v A$100M indicated in 0.25% Nov 2032 Indexed Bonds: Avg Yield 1.5120% v 1.8195%: bid-to-cover: 3.74x v 4.60x prior (Jun 24th, 2024).

- New Zealand RBNZ: Outlook for commercial property market remains weak - financial press.

China/Hong Kong

- Hang Seng opens -0.8% at 17,663; Shanghai Composite opens -0.2% at 2,850.

- China July Industrial Profits Y/Y: 4.1% v 3.6% prior.

- China govt said to have issued 16K test license plates and opened up 32K km of public test roads for autonomous vehicles - China state media.

- China PBOC-Paper: Recent moves [MLF operation] aimed a reasonably ample liquidity.

- (CA) Canada to impose 25% new tariffs on Chinese EVs, steel and aluminium – press [overnight update].

- (US) Reportedly White House this week expected to announce final implementation plans for tariff increases on certain Chinese imports, announced in May – press [overnight update].

- China's President Xi Jinping will attend the BRICS summit in Russia's Kazan in October - financial press [overnight update].

- China PBOC sets Yuan reference rate: 7.1249 v 7.1339 prior.

- China PBOC Open Market Operation (OMO): Sells CNY473B in 7-day reverse repos; Net injects CNY323B v net injects CNY419B prior.

Japan

- Nikkei 225 opens -0.1% at 38,066.

- Japan July PPI services Y/Y: 2.8% V 2.9%E.

- Japan Fin Min Suzuki: Reiterates FX is determined by various factors including rate differentials and geopolitical risks.

- Japan PM Kishida to visit South Korea on Sept 6th - financial press.

- (CN) Chinese surveillance plane breaches Japanese airspace for first time – Nikkei [overnight update].

South Korea

- Kospi opens flat at 2,696.

- South Korea July Retail Sales Y/Y: 6.3% v 11.1% prior.

- South Korea Finance Ministry guides 2025 bond sales at KRW201.3T v KRW158.4T y/y.

- South Korea Industry Ministry seeks to raise power prices - South Korea press.

- Korea Central Bank (BOK) Gov Rhee: Aug 22nd decision (to hold rates at 3.50%) meant as warning on household debt - financial press.

North America

- (IL) US General C.Q. Brown says immediate risk of war in Middle East has 'eased somewhat' after Israel-Hezbollah clash - financial press.

- (US) Pres Biden: US to send surging energy equipment to Ukraine to fix energy grid - White House statement.

- (US) Fed’s Barkin (voter for 2024; non-voter for 2025): Still see upside risks for inflation, though support dialing down interest rates in the face of a cooling labor market.

- (US) July preliminary Durable Goods Orders: 9.9% V 4.9%E; durables (ex-transportation): -0.2% V 0.0%E; Capital Goods Shipments (non-defense/ex-aircraft): -0.4% v +0.2%e.

- (CA) Canada to restrict companies' access to low wage foreign workers; Firms may hire 10% of staff under low-wage temporary foreign worker (TFW) program.

- (BR) Brazil Labor Min Luiz Marinho: The data being released this week will be 'strong'.

Europe

- (UK) Aug BRC Shop Price Index Y/Y: -0.3% v 0.2% prior.

- (LY) Libya's Tobruk-based government says will stop all oil production and exports; Waha Oil Co. says will gradually start cutting output.

- (BE) Belgium Aug Business Confidence: -12.6 v -12.7e.

Levels as of 01:20 ET

- Nikkei 225 +0.5%; ASX 200 -0.2%; Hang Seng +0.1%; Shanghai Composite -0.3%; Kospi -0.4%.

- Equity S&P500 FUTs flat; Nasdaq100 FUTs +0.1%, Dax +0.2%; FTSE100 +0.5%.

- EUR 1.1159-1.1172: JPY 144.24-144.98; AUD 0.6762-0.6790; NZD 0.6194-0.6126.

- Gold -0.4% at $2,544/oz; Crude Oil -0.3% at $77.23/brl; Copper +0.4% at $4.2558/lb.