Summer trading light and choppy ahead of Nvidia Q2 tomorrow – AU inflation still sticky

General trend

- Asian equities soft-to-flat ahead of highly anticipated Nvidia Q2 earnings early tomorrow morning Asia time.

- Australian inflation, unlike the rest of the developed world economies, is still sticky. CPI for July slightly above estimates although 0.3% less than prior. It was noted by officials that electricity rebates led to a -6.4% fall for the month of that component. Excluding the rebates, Electricity prices would have instead risen +.9% in July. Aussie dollar and bonds did not move on the CPI data.

- Australia Q2 construction work came in significantly less than expected.

- Aussie earnings continued; Miner Fortescue initially +1.5% to a one-month high on affirmed guidance and larger div than expected (stock had lost -36% YTD). However stock later lost gains to be -1.7%; Supermarket retailer Woolworths +2.5% despite statutory profits down heavily on significant items, Adjusted earnings were inline with EBIT slightly beating estimates. CEO said customers are looking for ‘value for money’.

- In the ongoing ‘bond war’ between investors searching for stability and PBOC wanting higher rates above current levels, (HK) Offshore Yuan (CNH) one-year HIBOR at 2.30909% falls to lowest level since data was available.

- Bitcoin collapsed from $62K to $57K handle during early Asian trading, on no particular news.

- US equity FUTs flat to -0.1% during Asian trading.

Looking ahead (Asian time zone)

- Wed Aug 28th (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 -0.1% at 8,061.

- Australia July CPI Y/Y: 3.5% V 3.4%E.

- Australia Q2 Construction Work Done: 0.1% v 0.7%e.

- Australia Treasurer Chalmers: Inflation data is a promising result, but we are not complacent [follows Jul CPI data].

- Australia sells A$800M vs. A$800M indicated in 3.50% Dec 2034 bonds; Avg Yield: 3.9148% v 3.9818% prior; bid-to-cover: 2.31x v 2.74x prior (Aug 14th, 2024, local time).

- New Zealand July Filled Jobs M/M: -0.1% v -0.3% prior.

China/Hong Kong

- Hang Seng opens -0.2% at 17,847; Shanghai Composite opens -0.2% at 2,844.

- Country Garden (2007.HK) Reportedly mulls further delays to Chinese yuan (CNY) bond payments – press [overnight update].

- China Commerce Ministry (MOFCOM): Canada tariff move will disrupt stability of global supply chains; Strongly opposes tariffs and urges Canada to immediately correct its wrongdoing; [overnight update].

- China PBOC sets Yuan reference rate: 7.1216 v 7.1249 prior.

- China PBOC Open Market Operation (OMO): Sells CNY277B in 7-day reverse repos; Net injects CNY19B v net injects CNY323B prior.

Japan

- Nikkei 225 opens -0.2% at 38,221.

- Bank of Japan (BOJ) Dep Gov Himino: To adjust degree of easing if certainty rises - speech in Yamanashi prefecture with local leaders.

- Japan Chief Cabinet Sec Hayashi: To hold ministerial meeting on nuclear power next week - financial press.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: For 3-5 Years; 5-10 Years, 10-25 Years and >25 Years (Inline with prior purchases).

South Korea

- Kospi opens flat at 2,690.

- Follow up: Korea Finance Chief: Reiterates South Korea to help boost consumer spending - financial press.

Other Asia

- (HK) Offshore Yuan (CNH) one-year HIBOR at 2.30909% falls to lowest level since data was available.

- Thailand Central Bank (BOT) Gov Sethaput: Economic recovery momentum likely to taper off in H2 v H1.

- Thailand Dep Fin Min: Mulling economic stimulus measures, including ~$13B digital handout scheme - financial press.

- Taiwan July Monitoring Leading Indicator: 35 v 38 prior [overnight update].

- Indonesia Central Bank (BI) Gov Warjiyo: Exports will still contribute to GDP growth in 2025, though smaller than 2024 [overnight update].

North America

- (US) Jun S&P corelogic house price index (20-CITY) M/M: 0.42% V 0.30%E; Y/Y: 6.47% V 6.14%E.

- (US) Jun FHFA house price index M/M: -0.1% V 0.1%E; Q/Q: +0.9% V 1.1% prior.

- (US) Aug Richmond Fed Manufacturing index: -19 V -14E (lowest since May 2020); New orders -26 v -23 prior (lowest since May 2023).

- (US) Aug consumer confidence: 103.3 V 100.7E.

- (US) Aug Dallas Fed Services Activity: -7.7 v -0.1 prior.

- (US) Treasury $69B 2-year note auction draws 3.874% V 4.434% prior; bid-to-cover ratio: 2.68 V 2.81 prior and 2.65 over the last 12.

- (US) Fed Discount Minutes: Chicago, NY directors favored a cut.

Europe

- (UK) Aug CBI Retailing Reported Sales: -27 v -10e.

- (EU) ECB’s Knot (Netherlands): Will wait for data for view on Sept rate cut.

- (EU) ECB’s Centeno (Portugal, dove): Path for interest rates seems to be relatively clear - podcast.

- (RU) Ukrainian Pres Zelenskiy: Ukraine has successfully run test of its first ballistic missile; War will end through dialogue, but Ukraine must be in a powerful position.

- (IT) PM Meloni: Seeking budget cuts to fill €12B budget gap.

- (HU) Hungary central bank (MNB) leaves base rate unchanged at 6.75%; as expected.

Levels as of 01:20 ET

- Nikkei 225 flat; ASX 200 -0.2%; Hang Seng -1.1%; Shanghai Composite -0.5%; Kospi flat.

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

- EUR 1.1145-1.1186: JPY 143.69-144.54; AUD 0.6783-0.6813; NZD 0.6237-0.6253.

- Gold -0.4% at $2,544/oz; Crude Oil flat at $75.50/brl; Copper -0.9% at $4.2637/lb.