Quiet start to the week in Asia with equities slightly down

Asia market update: Quiet start to the week in Asia with equities slightly down; Global yields little changed after US yields fall Friday; BOJ Summary of July Opinions – YCC with greater flexibility and continuation of monetary easing.

General trend

- Global yields little changed in Asia after US yields fell sharply during NY Friday trading post after a slightly softer jobs report, with the UST 10-yr final level of 4.0418% reversing >50% of the prior gains of the week (Monday low of 3.9289 up to early Friday high of 4.1976).

- The Bank of Japan (BOJ) confirmed it would conduct YCC “with greater flexibility” after the increase in the 10-yr band to 1.0%, and that it will continue with monetary easing.

- In what is likely to be welcome news for the BOJ in their pursuit of a sustainable 2% inflation rate, the National Personnel Authority recommended that Japan Public Workers get their biggest salary gains in 26 years.

- The PBOC kept up Yuan support with a fix nearly 300 pips stronger than estimates.

- US equity FUTs up 0.3% to 0.5%.

Looking ahead (Asian time zone)

- Tue CN Balance of Trade.

- Wed CN CPI.

- Thu night US CPI.

- Fri night US PPI and Consumer Sentiment.

Holidays in Asia this week

- Singapore Wed Aug 9.

- Japan Fri Aug 11.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 7,323.

- Australia July ANZ Indeed Job Ads M/M: +0.4% v -2.5% prior.

- Australia to introduce legislation cracking down on tax advisers after PwC scandal (weekend update).

China/Hong Kong

- Hang Seng opens -0.3% at 19,474.

- Shanghai Composite opens -0.3% at 3,276.

- Nanjing announced subsidies for newly built homes, also mentioned the implementation of housing vouchers related to collective land and property expropriation.

- China Jul Loan growth expected to rise y/y; cites analysts - China Securities Journal.

- China PBOC sets Yuan reference rate: 7.1380 v 7.1418 prior.

- China PBOC Open Market Operation (OMO): Sells CNY3B in 7-day reverse repo; Net drains CNY28B v net drains CNY63B prior (fifth consecutive net drain).

Japan

- Nikkei 225 opens -0.8% at 31,921.

- Bank of Japan (BOJ) July meeting summary of opinions: While conducting YCC with greater flexibility to assist market functioning the bank should maintain its basic stance that it will continue with monetary easing.

- Japan July Foreign Reserves $1.25T v $1.25T prior.

- Japan MOF: Total amount of foreign exchange intervention operations for the period from April through June 2023: ¥0.

- Japan Public Workers may get biggest salary gains in 26 years - National Personnel Authority recommendation.

- Former Japan MOF official Sakakibara ('Mr Yen') does not expect Yen currency intervention.

- Foreign buying of Japanese equities has exceeded that of Chinese equities for the first time since 2017 - Goldman Sachs.

- Japan to start Fukushima water release as soon as late August.

- Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 100bps; Opens window to buy unlimited amount of 10-year JGBs at 1.00%.

South Korea

- Kospi opens -0.4% at 2,591.

Other Asia

- Taiwan’s Foxconn (2317.TW) Said to become the first Taiwan co. to receive AI orders from Apple; plans to assemble AI servers for Apple in Vietnam.

- Thailand July CPI M/M: 0.0% v 0.2%e; Y/Y: 0.4% v 0.6%e [3rd straight month with annual pace below the target range].

- Thailand Ministry of Commerce: August inflation to "remain low" on the high base of last year; expects inflation to remain below 1% for the rest of 2023.

- Indonesia July Foreign Reserves: $137.7B v $137.5B prior.

- Indonesia Q2 GDP Q/Q: 3.9% v 3.7%e; Y/Y: 5.2% v 5.0%e.

- Indonesia plans super grid to link power across islands.

North America

- (US) July change in Nonfarm Payrolls: +187K V +200KE (2nd straight miss of consensus); Birth-Death Adjustment (unadj): +280K v +26K prior (Friday night update).

- (US) July unemployment rate: 3.5% V 3.6%E (Friday night update).

- (US) July average hourly earnings M/M: 0.4% V 0.3%E; Y/Y: 4.4% V 4.2%E (Friday night update).

- Fed's Bowman (voter): More US rate hikes likely will be needed (weekend update).

- Cyberattack has disrupted hospital computer systems in several states, forcing some emergency rooms to close and ambulances to be diverted (weekend update).

- US and China are opening new lines of communication to tackle contentious issues – FT (weekend update).

Europe

- European companies' Russian units see €100B hit from Ukraine war – FT.

- Ukraine says sea drone with 450kg of TNT hit Russian tanker carrying fuel for Russian troops late Friday night (weekend update).

Levels as of 01:20 ET

- Nikkei 225 +0.2%, ASX 200 -0.3% , Hang Seng -0.4%; Shanghai Composite -0.8% ; Kospi -0.1%.

- Equity S&P500 Futures: +0.3%; Nasdaq100 +0.5%, Dax +0.3%; FTSE100 +0.5%.

- EUR 1.0991-1.1020 ; JPY 141.52-142.30 ; AUD 0.6565-0.6593; NZD 0.6087-0.6114.

- Gold -0.2% at $1,972/oz; Crude Oil -0.1% at $82.77/brl; Copper -0.2% at $3.8418/lb.