Asia Market Update: China and the US to hold trade talks later in Aug, markets pare losses and the yuan rallies; Australia unemployment rate unexpectedly hits multi-year low
General Trend:
-MSCI Emerging Markets equity index trades into bear market territory, later pared decline
-Tencent declines post earnings
-Australian telecom Telstra rises over 5%, FY18 profits above ests
-South Korean chipmakers track declines in US semiconductor companies
-Australia July labor data mixed , unemployment rate unexpectedly declined
-China PBoC conducts first daily open market operation in 20 sessions
-Japan reports unexpected adj trade deficit in July, exports to the US again decline
***Headlines/Economic Data***
Australia/New Zealand
-ASX 200 opened -0.3%
- ASX 200 Resources index -2.1%, Energy -1.7%; Telecom +5.1%, Financials +0.2%
-(AU) AUSTRALIA JULY EMPLOYMENT CHANGE: -3.9K V +15.0KE; UNEMPLOYMENT RATE: 5.3% V 5.4%E (close to 6-year low)
- (AU) Australia Aug Consumer Inflation Expectation: 4.0% v 3.9% prior
- (NZ) New Zealand sells NZ$150M v NZ$150M in April 2037 bonds, bid to cover: 2.47x, avg yield: 2.8887%
China/Hong Kong
Shanghai Composite opened -1.2%, Hang Seng -1.7%
- Hang Seng Info Tech index -2.3%, Energy -1%, Industrial Goods -0.7%, Financials -0.5%; Telecom +1.2%, Consumer Goods +1%, Services +1%, Property/Construction index +0.9%
- (CN) Shanghai Composite trades below 2,681 (lowest level in ~2.5 years)
- (CN) China Commerce Ministry (MOFCOM): China Vice Commerce Min to visit the US for trade talks in late Aug, to meet with US Treasury Undersecretary Malpass
- (CN) China PBoC Open Market Operation (OMO): To inject CNY40B in 7-day reverse repos; Net: CNY40B injection
- (CN) CHINA PBOC SETS YUAN REFERENCE RATE: 6.8946 V 6.8856 PRIOR
- (CN) China NDRC: Reiterates China consumer prices to be reasonable range; Bankruptcy filings by Chinese companies are rising in 2018
- (CN) China should be cautious about the rapid rise in mortgages – Chinese Press
- (CN) China faces risk in the rising exposures of banks to the property market - Chinese Press
- (CN) China said to tell bad debt managers to resolve P2P risks - financial press
-HSBC: Said to lower HKD and Yuan deposit rates in Hong Kong - HK Press
Japan
Nikkei 225 opened -1%
- TOPIX Retail Trade index -1.2%, Iron & Steel -1.2%, Marine Transportation -1%, Electric Appliances -1%, Info & Communication -1%, Real Estate -0.9%; Securities +0.2%
-(JP) JAPAN JUL TRADE BALANCE: -¥231.2B V -¥41.2BE; ADJ TRADE BALANCE: -¥45.6B V +¥20.7BE
-(JP) Japan MOF sells ¥2.0T v ¥2.0T indicated in 0.10% 5-yr JGB: avg yield: -0.0760% v -0.107% prior, bid to cover: 3.95x x v 4.87x prior
Korea
-Kospi opened -1.1%
-(KR) Bank of Korea (BoK) sells 2-year monetary stabilization bonds (MSBs); yield 2.000%
Other
-(TW) Taiwan FSC to begin stress tests on commercial banks - Local Press
North America
-US equity markets ended lower: Dow -0.5%, S&P500 -0.8%, Nasdaq -1.2%, Russell 2000 -1.3%
-S&P500 Energy -3.5%, Materials -1.6%
-(US) DOE CRUDE: +6.8M V -2.5ME;
Europe
-(TR) IMF Official: Has not received any indication from Turkey authorities that they are considering a request for IMF financial assistance
***Levels as of 01:30ET***
- Nikkei 225, -0.1%, ASX 200 -0.1%, Hang Seng -0.4%%; Shanghai Composite flat; Kospi -0.9%
- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.4%, Dax +0.4%; FTSE100 +0.3%
- EUR 1.1391-1.1335 ; JPY 110.95-110.46 ; AUD 0.7276-0.7214 ;NZD 0.6586-0.6555
- Aug Gold -0.5% at $1,179/oz; Sept Crude Oil flat at $65.03/brl; Sept Copper +0.3% at $2.591 /lb