US tech weakness bleeds into Asia, RBNZ dovish cut, JP exports fall, Focus on UK CPI

General trend

- US tech stocks traded lower and the sentiment continued through to Asia, -Nvidia -3.5%, Advantest -3.5%. Following yesterday’s -3% fall, SoftBank Group fell another -9% as the market continues to baulk at the $2B Intel investment announced yesterday. Nikkei underperformed -1.6%.

- Aussie builder materials James Hardie plunged 30% at the ASX open after Adj Net Op profit fell 29%, with lower EBIT margin and Revenues. FY26 EBITDA guidance also 21% below estimates. AZEK acquisition integration also weighing along with US housing market weakness.

- Japanese July trade balance unexpectedly recorded a deficit, as exports fell to all major trading partners, with US exports -10% particularly severe. Still not clear if this was due to end of front-loading or US tariffs beginning to impact for the longer-term. July trade surplus with the US narrowed to ¥585B.

- Japan Core Machine orders for June were significantly stronger than expected, perhaps supporting the front-loading thesis up through end-June.

- China PBOC left the monthly LPR rate unchanged, as expected.

- New Zealand’s RBNZ for the first time had a 4-2 decision, cutting by 25bps as expected, but implying that two members voted for a 50bps cut, as the only discussion was whether to cut by 25 or 50bps. NZ 2-year yields -12bps, with AUD/NZD +0.7% and USD/NZD +1.2% , Kiwi hit a four-month low at 0.5820. In the press conference, RBNZ indicated there is still room for more cuts, and several banks now forecast the OCR to be cut a further 50bps to 2.50% before end-2025.

- Bitcoin continued its squeeze down from recent fresh all-time highs, falling into the $112K handle, along with ETH and other Alt coins.

- US now seen to expand Intel plan to other US chipmakers to convert prior CHIPS Act funding into equity for the USA.

- US equity FUTs -0.3% to -0.5% during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Wed 20th (Tue eve UK July CPI, ID Rate Decision, Tue night US FOMC Minutes).

- Thu Aug 21st NZ Trade Balance, Global Flash PMIs, (Thu night EU Aug Consumer Confidence, US July Home Sales).

- Fri Aug 22nd JP July CPI, (Fri eve UK July Retail Sales, US Fed Chair Jackson Hole speech).

Holidays in Asia this week

- Thu Aug 21st Philippines.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.3% at 8,867.

- Australia sells A$1.5B v A$1.5B indicated in 1.25% May 2032 bonds; Avg Yield: 3.924% v 4.2349% prior; bid-to-cover: 2.93x v 4.45x prior.

- Follow up: China said to have purchased the first cargo of canola (rapeseed) from Australia since 2020 - financial press [update].

- NEW ZEALAND CENTRAL BANK (RBNZ) CUTS OFFICIAL CASH RATE (OCR) BY 25BPS TO 3.00%; AS EXPECTED.

- RBNZ Acting Gov Hawkesby: Economy stalled in Q2; Next two meetings are live, no decisions have been made - post-rate decision press conference.

- Fonterra Global Dairy Trade Auction Dairy Trade price index: -0.3% v +0.7% prior.

China/Hong Kong

- Hang Seng opens -0.6% at 24,968; Shanghai Composite opens -0.3% at 3,716.

- CHINA PBOC MONTHLY LOAN PRIME RATE (LPR) SETTING: LEAVES RATES UNCHANGED (AS EXPECTED).

- HKMA: China MOF to issue CNY12.5B in Sovereign Bonds in Hong Kong on Aug 27th.

- China [Jul] rare earth magnet exports to the US 'surge' to 6-month high [timeframe uncertain].

- China local governments promote M&A activity with aim to drive industrial upgrades - Securities Daily.

- (UR) Russia Pres Putin reportedly requested that China act as a guarantor of any Russia agreement with US and EU – Axios [overnight update].

- US DHS designates new sectors including steel, copper and lithium as 'high priority' under Uyghur Forced Labor Prevention Act [overnight update].

- China Industry Ministry holds meeting seeking to curb disorderly competition [overnight update].

- China MOFCOM: To implement policy to boost consumption [overnight update].

- China PBOC sets Yuan reference rate: 7.1384 v 7.1359 prior.

- China PBOC Open Market Operation (OMO): Injects CNY616B in 7-day reverse repos; Net injects CNY498B v injects CNY466B prior.

Japan

- Nikkei 225 opens -0.4% at 43,368.

- JAPAN JULY TRADE BALANCE: -¥117.5B V +¥198.5BE; Adjusted Trade Balance: -¥303.0B v -¥67.2Be. Machine Orders M/M: +3.0% v -0.5%e; Y/Y: 7.6% v 4.7%e.

- Japan to launch anti-dumping probe on South Korea Bisphenol; to also review the expiration of dipotassium carbonate anti-dumping duty - financial press.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: 1-3 Years; 3-5 Years and 5-10 Years; (Purchase amounts unchanged).

Korea

- Kospi opens -1.0% at 3,121.

Other Asia

- Thailand Central Bank (BOT): Bad loans seen gradually rising but manageable [overnight update].

- India Foreign Ministry: Confirms will restart direct flights with mainland China at the earliest [overnight update].

North America

- US reportedly considers equity stakes in chipmakers in exchange for CHIPS Act funding similar to Intel's plan - press.

- US Treasury Sec Bessent: We've had good talks with China; China is the biggest revenue line in terms of tariff income; Status quo is working well on China.

- (US) President Trump: Thought resolving Russia-Ukraine war would be 'easier'; if need I'll go to the Putin-Zelenskiy meeting and 'close it'.

- (US) Fed's Bowman (voter, dovish dissenter): Fed staff should be allowed to hold small amounts of crypto assets; Limits on Fed staff investment activities may hinder recruiting and retention of experts.

- (US) Pres Trump: Confirms Putin agreed to meet with Zelenskiy during Monday's call; Putin and Zelenskiy getting along a little bit better; We will let them meet first in bilateral - TV comments.

- (US) Treasury Sec Bessent: Last thing we want to see is a China belt and road scenario where they are selling Huawai chips to the rest of the world.

- (US) JULY HOUSING STARTS: 1.428M V 1.297ME (highest since Feb); BUILDING PERMITS: 1.354M V 1.386ME.

- (CA) CANADA JULY CPI M/M: 0.3% V 0.3%E; Y/Y: 1.7% V 1.8%E.

- (US) Commerce Sec Lutnick: Weeks away from seeing any official documents on Japan or Korea trade deals; Trump thinks we should get equity stake for money being put up for Intel under chips act.

- (US) Fed's Bowman (voter, dovish dissenter): Debanking is a problem in financial system; Will address debanking if more cases arise - TV interview.

- (US) CMS launches national effort to remove ineligible Medicaid enrollees and uphold citizenship requirements.

Europe

- (EU) European Commission said to have sent draft trade joint statement back to US - press.

- (PT) Portugal July PPI M/M: 0.1% v 0.9% prior; Y/Y: -3.7% v -3.0% prior.

Levels as of 01:20 ET

- Nikkei 225 -1.5%, ASX 200 +0.1%, Hang Seng -0.6%; Shanghai Composite flat; Kospi -0.9%.

- Equity S&P500 Futures -0.3%; Nasdaq100 -0.5%; DAX -0.7%; FTSE100 -0.1%.

- EUR 1.1623-1.1693; JPY 147.42-147.82; AUD 0.6429-0.6464; NZD 0.5821-5899.

- Gold +0.1% at $3,361/oz; BTC -1.2% at $113,820; Crude Oil +0.4% at $62.03/bbl; Copper -0.2% at $4.4217/lb.