Asian equities mixed in quiet session with little macro data
|Asia market update: Asian equities mixed in quiet session with little macro data; CN PBOC ups liquidity ops; Focus on US Retail Sales.
General trend
- Asian equities were mixed amid quiet trading after the Dow set fresh record highs during US trading and the Russell small caps continued receiving the benefits of investor rotation.
- J.D. Vance, junior Senator from Ohio, was nominated by Trump and elected by RNC members to be Trump’s VP running-mate as the 4-day RNC Convention kicked off in Milwaukee, Wisconsin.
- Australia RBA rate-hike probability down to 17% today after being as high as 30% earlier in the month.
- Ping An Insurance -5.5% after the Chinese insurer issued convertible notes to the amount of $3.5B. The stock was the biggest loser on the Hang Seng.
- PBOC stepped up OMO liquidity injection to almost CNY700B [**Reminder Oct 20th 2023: China PBOC Open Market Operation (OMO): Net injected CNY733B v injects CNY182B prior [largest net OMO net injection on record]).
- Rio Tinto was the first of the Aussie miners to report Q2 production, and wile iron ore output rose, guidance for iron ore and copper disappointed with both at the lower end of target. Stock -2%
- Luxury retailers such as Hugo Boss continued to warn on profits, with many singling out poor demand in China.
- US equity FUTs +0.2% to +0.3% during Asian trading.
Looking ahead (Asian time zone)
- Tue July 16th (Tue eve DE July ZEW Econ Sentiment, Tue night US Jun Retail Sales).
- Wed July 17th RBA Simon speech (Wed eve GB Jun CPI, & ID Interest Rate Decision, Wed night CA Jun CPI).
- Thu July 18th Japan Jun Balance of Trade, AU Jun Employment (Thu night July 13th US initial jobless, ECB Rate Decision).
- Fri July 19th Japan Jun National CPI, (Fri eve GB Retail Sales).
Holidays in Asia this week
- Mon July 15th Japan.
- Wed July 17th India.
Headlines/economic data
Australia/New Zealand
- ASX 200 opens -0.1% at 8,007 (yesterday was record closing high).
- New Zealand Jun Non Resident Bond Holdings: 60.7% v 61.5% prior.
China/Hong Kong
- Hang Seng opens -0.9% at 17,845; Shanghai Composite opens -0.3% at 2,963.
- Germany Eco Min spokesman: Germany contributed to discussion on China EV duties without making a decision – press [overnight update].
- Reportedly Sweden will abstain in vote on EU tariffs on China EVs – press [overnight update].
- China PBOC sets Yuan reference rate: 7.1328 v 7.1313 prior.
- China PBOC Open Market Operation (OMO): Sells CNY676B in 7-day reverse repos; Net injects CNY674B v net injects CNY127B prior.
Japan
- Nikkei 225 opens +0.4% at 41,366 post-holiday yesterday.
- Japan May Tertiary Industry Index M/M: -0.4% v 0.1%e.
- Japan Chief Cabinet Sec Hayashi: Declines comment on FX intervention.
South Korea
- Kospi opens flat at 2,861.
- South Korea Jun Import Price Index M/M: +0.7% v -1.4% prior; Y/Y: 9.7% v 4.6% prior – update.
- Korea 10-year bond FUTs rise to highest since Aug 2022.
North America
- (US) Newly-nominated Trump VP running-mate, J.D. Vance (R-OH): VP needs to support President in enacting agenda - first comments at RNC as running-mate.
- (US) Elon Musk says he commits ~$45M a month to pro-Trump SuperPAC - WSJ.
- US Pres Biden: I will be on the ballot 'unless I get hit by a train' - interview comments.
- (US) Fed's Daly (voter): Confidence growing we're nearing 2% inflation goal; Declined to give time-based guidance on rate cuts.
- (US) Fed's Goolsbee (non-voter for 2024): Rate cuts will soon be warranted; Last week’s mild June inflation reading makes him more confident that price pressures are easing in a way that supports lowering interest rates - WSJ.
- (US) Freeport LNG export plant reportedly cancels at least four cargoes with no restart set following Hurricane Beryl - press.
- (US) Adobe Analytics estimates 2024 Prime Day expected to drive $14B online for US retailers.
- (US) July Empire Manufacturing: -6.6 V -8.0E; New orders, Employment remain negative; New Orders: -1.0 v -16.5 prior.
- (CA) Canada Q2 Overall Business Outlook Survey: -2.9 v -2.4 prior.
- (US) Reportedly President Biden to announce new proposal to cap rental costs nationwide at 5% - press.
- (US) Fed Chair Powell: Plans to stay in office until May 2026; The three readings in Q2 add confidence in inflation falling; Not going to send any signal on any particular meeting - comments at the Economic Club of Washington.
- (US) Former pres Trump selects Sen. J.D. Vance (R-OH) as VP running mate - Truth social post.
Europe
- (RU) Russia Dep PM Novak: Russia might decide by the end-July whether to reinstate a gasoline exports ban from Aug if the situation on the domestic fuel market gets tense.
- (UR) Ukraine Pres Zelenskiy: Want Russia representative to join next peace summit; Aim to have all elements of peace plan ready for second summit to take place in Nov 2024; Changes in Ukraine govt being discussed; Ukraine will receive invitation to join NATO once the war has ended.
- (EU) ECB reportedly to delay leveraged loans investigation due to push back from banks.
Levels as of 01:20 ET
- Nikkei 225 +0.4%; ASX 200 -0.1%; Hang Seng -1.5%; Shanghai Composite -0.3%; Kospi +0.4%.
- Equity S&P500 FUTs +0.2%; Nasdaq100 FUTs +0.3%, Dax -0.1%; FTSE100 -0.2%.
- EUR 1.0888-1.0899: JPY 157.99-158.80; AUD 0.6737-0.6765; NZD 0.6049-0.6180.
- Gold +0.2% at $2,434/oz; Crude Oil -0.4% at $80.52/brl; Copper +0.1% at $4.5175lb.
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