US Dollar Index continues to rise

Asia Market Update: Asia trades mixed; 10-yr gov’t bond yields generally track recent drop in UST yield; NZD and AUD reverse gains, USD index continues to rise.

General Trend

- Financials drop after declines in the US amid lower 10-yr yields.

- Miners trade generally lower after dropping in commodity prices.

- Nikkei pared opening gain [Large component Softbank Group declines; Topix Banks index drops over 1.5%].

- Shanghai Composite ended morning trading lower (-0.5%) [Materials, Financial and Consumer Staples indices declined].

- Hang Seng has remained higher [TECH index tracks rise in Nasdaq].

- S&P ASX 200 has risen after the lower open [Consumer Discretionary and REIT indices rise; Resources, Energy and Financial indices drop].

- Metals see a modest rise in Asia after prior decline; US Soybean FUTs rebound by over 3.5%.

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened -0.2%.

- (AU) Westpac analyst: Sees RBA beginning rate hikes in early 2023.

- AIR.NZ Domestic capacity has reached about 90% of pre-Covid levels; Guides FY21 Pretax loss not greater than NZ$450M, targeting capital raise before the end of Sept.

- ALU.AU Guides FY21 Rev at the lower end of the guided range of $190-195M; EBITDA margins lower end of prior guided 37-39% - investor slides.

- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$262.8B v A$261.0B prior (fresh record high).

- (AU) Australia sells A$1.0B v A$1.0B indicated in 1.75% Nov 2032 bonds, avg yield 1.6914%, bid to cover 2.58x.

- (NZ) Reserve Bank of New Zealand (RBNZ) offers to buy a total of NZ$200M in government bonds next week under the QE program v NZ$220M prior.

Japan

-Nikkei 225 opened +0.4%.

- (JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; extends pandemic-relief program (as speculated) until Mar 2022.

- (JP) JAPAN MAY NATIONAL CPI Y/Y: -0.1% V -0.2%E; CPI EX-FRESH FOOD (CORE) Y/Y: 0.1% V 0.0%E.

- (JP) Japan PM Suga confirms to remove virus State of Emergency restrictions in Tokyo on Sun, Jun 20th.

- 3382.JP Reportedly to sell off part of its stake in Tokyo-based home decor chain Francfranc to focus on convenience store sector – Nikkei.

- 4523.JP Eisai and Bristol Myers Squibb Enter Into Global Strategic Collaboration for Eisai’s MORAb-202 Antibody Drug Conjugate, with milestones worth up to $2.45B.

Korea

-Kospi opened at 0.0%.

- (KR) North Korea Leader Kim: We are ready for both dialogue and confrontation.

- (KR) South Korea's new COVID cases remain in 5002 for the second day, ~33% of residents have gotten the first COVID vaccine - Yonhap.

China/Hong Kong

-Hang Seng opened +0.1%; Shanghai Composite opened -0.1%.

- (US) National Security Adviser Sullivan: Pres Biden-Pres Xi meeting to be planned ‘soon’.

- (CN) Biden executive order reportedly could force certain Chinese apps to improve measures to protect private information if they seek to remain in US market – press.

- (CN) China Yuan (CNY) volatility may rise in H2 2021; two-way yuan fluctuation in FX market will be further amplified; notes market expectations related to US Fed monetary policy - China Securities Times Front-page Commentary.

- (CN) FCC votes 4-0 to approve restrictions on equipment purchases from Chinese technology firms that are deemed to be national security risks (US session).

- (CN) China Association of Automobile Manufacturers (CAAM): Expects China's new energy vehicle (NEV) sales to grow >40% each year in the next 5 years; Guides China 2021 NEV sales of 1.9M units and 2.7M units for 2022.

- (CN) Former China Minister for Ministry and Information Technology (MIIT) Miao Wei says China should extend the NEV purchase tax exemption; the country should develop a unified and open-source smart car operating system (OS) - financial press.

- (CN) China to develop a 5-year plan related to the display sector; the plan is expected to cover various areas (including flexible display, microdisplay, and ultra-high-definition display technologies) - Chinese press.

- (CN) China PBOC to issue CNY5.0B in 6-month bills in Hong Kong on June 24th (Thurs).

- (CN) China Ministry of Finance (MOF) sells 50-year bonds: avg yield 3.8097% v 3.76% prior [from Mar 19th].

- USD/CNY (CN) China PBOC sets Yuan reference rate: 6.4361 v 6.4298 prior.

- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net CNY0B prior.

- (HK) Hong Kong Finance Sec to hold a briefing on consumption vouchers at 3 pm local time (7 GMT).

- 9858. HK IPO opens for trade at HK$6.28/shr v HK$6.98/shr pricing.

Other

- 2330.TW Said to consider new fab facility in Germany - Taiwan press.

North America

- FOXA Authorizes $2B incremental stock buyback (9.5% of market cap).

- (US) INITIAL JOBLESS CLAIMS: 412K V 360KE; CONTINUING CLAIMS: 3.52M V 3.43ME.

Europe

- ANA.ES Renewable energy IPO seen with a valuation of €9.8B – press.

- (DE) ECB's Weidmann (Germany): calls for end of PEPP program soon, must end when the pandemic is over - German press (overnight).

Levels as of 01:20 ET

- Nikkei 225, flat, ASX 200 +0.5% , Hang Seng +0.5%; Shanghai Composite -0.5% ; Kospi +0.1%.

- Equity S&P500 Futures: +0.1%; Nasdaq100 +0.2%, Dax -0.1%; FTSE100 -1.1%.

- EUR 1.1925-1.1904 ; JPY 110.33-110.15 ; AUD 0.7562-0.7541 ;NZD 0.7019-0.6996.

- Gold +0.6% at $1,785/oz; Crude Oil -0.7% at $70.53/brl; Copper +0.8% at $4.2045/lb.