VP Harris gets needed delegates for DNC Pres nomination

Asia market update: VP Harris gets needed delegates for DNC Pres Nomination; CN inserts itself into Palestine-Israel conflict; BOJ split for July 31st?

General trend

- US VP Kamala Harris gained the required number of pledged delegates for the Democratic Presidential Nomination, although delegate support will not be made official by the DNC until early Aug.

- Unexpected geopolitical news out of China, where state media suddenly reported that 14 Palestinian factions (incl. Fatah and Hamas leaders) had gathered in Beijing since Sunday with Foreign Min Wang Yi for a three-day "reconciliation dialogue" on July 21-23rd. Fatah, Hamas and the other factions signed a "Beijing Declaration" today. Among the commitments are establishing an independent Palestinian state with Jerusalem as its capital.

- With this development, China appears to have inserted itself directly into the ongoing affairs of the Middle East, and on the opposing side to Israel/US and other western nations supporting Israel.

- Press reports late yesterday from Japan said that the BOJ board was split ahead of next week’s decision, with some members reportedly wanting more time and more data, while others said to be concerned about the risks of missing a chance to hike. The apparent hesitation helped pause the Yen rally which seemed to be picking up steam again earlier during yesterday’s Asian session. Yen strength returned as the day progressed to again test yesterday's highs approaching 156.

- Korea June PPI came in slightly hotter than expected.

- Singapore June CPI slowed more than expected, with Core CPI slowing to its lowest since 2022.

- US equity FUTs -0.2% to -0.3% during Asian trading.

Looking ahead (Asian time zone)

- Wed 24th KR July Consumer Conf, AU + JP + IN July Flash PMI, (Wed eve DE Aug Consumer Conf + July Flash PMI, Wed night CA BOC Rate Decision).

- Thu 25th KR Adv Q2 GDP, (Thu eve DE July Business Climate, Fri night US Q2 Adv GDP).

- Fri 26th (Fri night *US Jun Core PCE).

Holidays in Asia this week

.- Mon July 22nd Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,942

- Australia Fed govt announces new offshore gas exploration permits for domestic east and west coast producers - financial press.

- AOFM [Australia debt agency]: Announces formal launch of the new December 2035 Treasury Bond through syndication; Initial price guidance for the issue is a spread of 4.5 to 6.5bps to the implied bid yield for the primary ten-year Treasury Bond futures contract; Issue is expected to be priced on Wednesday, 24 July 2024.

- Australia sells total A$100M vs. A$100M indicated in indexed Sep 2030 bonds.

China/Hong Kong

- Hang Seng opens +0.3% at 17,679; Shanghai Composite opens -0.1% at 2,960.

- Tesla China extends zero-interest loans for some Model 3 and Y cars until end-Aug - financial press.

- China Resources Ministry: Added 6.98M urban new jobs in H1; reiterates employment situation is generally stable.

- China said to extend refinancing support for LGFV debt until mid-2027 - financial press [overnight update].

- China State Council: Revised Guarding State Secrets law to take effect on Sept 1st 2024 [overnight update].

- China to extend tariff exemptions for imports of some US products until Feb 28th, 2025 [overnight update].

- China Jan-June Fiscal Rev: -2.8% y/y; Fiscal Expenditures +2.0% y/y [overnight update].

- China PBOC sets Yuan reference rate: 7.1334 v 7.1335 prior.

- China PBOC Open Market Operation (OMO): Sells CNY267.3B in 7-day reverse repos; Net drains CNY408.7B v net drains CNY70.8B prior.

Japan

- Nikkei 225 opens +0.7% at 39,864.

- Japan considers raising minimum wage to at least ¥1,050/hr - Japanese press.

- Follow up: Japan says China has lifted anti-dumping duties on stainless steel - Japanese press.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: For 1-3 Years; 3-5 Years and 5-10 Years (lnline with prior purchases).

- BoJ said to see weak consumption complicating rate decision next week; some BoJ officials reportedly want more time to view data, others said to see risks of missing hike chance – Press [overnight update].

- Japan LDP Ruling Party Sec Gen Motegi: Bank of Japan (BOJ) should more clearly indicate its policy normalization path, including chance of several-staged rate hikes [overnight update].

South Korea

- Kospi opens +0.9% at 2,788.

- South Korea July Consumer Confidence: 2.5% v 2.3% prior.

- South Korea Fin Min Choi: Prices may rise in Jul on unusual weather; stabilization may occur after Aug.

Other Asia

- Singapore Jun CPI M/M: -0.2% v 0.0%e; Y/Y: 2.4% v 2.7%e.

- Vietnam Central Bank (SBV) Dep Gov: Bad debt seen to be rising; Interest rates stable in H1 to keep inflation under control - financial press.

- Philippines Fin Min Recto: Hopes Q2 GDP will grow at 6%; Open to a rate cut as early as Aug - press.

- Hong Kong Jun CPI Composite Y/Y: 1.5% v 1.2%e [overnight update].

- TAIWAN JUN EXPORT ORDERS Y/Y: 3.1% V 12.3%E; Notes weak demand from China; Sees July export orders -2.6% to +1.6% y/y [*Note: could be first drop since Feb] [overnight update].

North America

- GOOGL Talks to acquire Wiz said to fall apart; Wiz said to reject the offer, plans to instead pursue an IPO and focus on ARR of $1.0B – WSJ.

- (US) VP Harris: I look forward to formally accepting the (Democratic Party) Nomination; Have secured enough pledged delegates - Press.

- (US) VP Harris has enough pledged delegates for Democratic Presidential nomination; delegate support will not be official until Aug - Press.

- (US) GOP Presidential candidate Trump and VP-pick Vance: I (Trump) picked Vance because we 'always had good chemistry' - Joint interview on Fox (pre-recorded).

- (US) VP Harris Presidential Campaign said to raise $81M (record sum for the 2024 election cycle); Said to claim over half of needed delegates - Nikkei Asia.

- (US) US Pres Biden to return to White House on Tuesday afternoon - White House statement.

- (US) Democratic National Convention Chair Harrison: If only one candidate reaches 300 delegate threshold, virtual voting could happen as early as Aug 1st; Democratic Party will deliver a Presidential Nominee by Aug 7th - US press.

- (US) Reportedly key US regulator Office of the Comptroller of the Currency privately found 11 of the 22 large banks it supervises have “insufficient” or “weak” management of so-called operational risk - press.

- (US) June Chicago Fed National Activity Index: +0.05 v -0.09e.

- (US) Former House Speaker Pelosi endorses Harris for President - Punchbowl X post.

- (US) Harris Campaign aims to have enough delegates to secure Dem nomination by end of Wednesday - press.

Europe

- (IL) 14 Palestinian groups incl. Fatah and Hamas leaders holding "reconciliation dialogue" in Beijing, July 21-23rd; Hamas signs consensus document ("Beijing Declaration") with other Palestinian factions - China state media.

- (UK) New leader of UK Conservative Party to be announced on Nov 2nd - UK press.

- (IL) Israel Central Bank (BOI) July Minutes: Vote to keep policy steady was unanimous (5-0).

Levels as of 01:20 ET

- Nikkei 225 +0.2%; ASX 200 +0.6%; Hang Seng -0.2%; Shanghai Composite -0.6%; Kospi +0.6%.

- Equity S&P500 FUTs -0.1%; Nasdaq100 FUTs -0.3%, Dax +0.2%; FTSE100 -0.3%.

- EUR 1.0887-1.0897: JPY 156.20-157.11; AUD 0.6629-0.6646; NZD 0.5965-0.5982.

- Gold flat at $2,395/oz; Crude Oil -0.1% at $78.37/brl; Copper -0.4% at $4.1825/lb.