sia Market Update: China PBOC cuts RRR 50bps, releasing more liquidity than expected
Mon, 25 Jun 2018 1:30 AM EST
General Trend:
- Asian equities trade generally lower, US said to consider additional trade actions on China
- Shanghai Composite pares gains as PBoC cut the RRR following recent market speculation
- HK IPOs in focus, money market rates hit 10-year high: Xiaomi set maximum offering price for floatation, Meituan files for ~$6.0B IPO
- BoJ June Meeting Summary of Opinions: Not appropriate to adopt policy that would ‘forcibly’ push up demand in short period of time, reason for sluggishness in prices is not likely to be merely shortage of demand
- Turkish Lira (TRY) rises over 1.5%, country’s election board said Erdogan received a ‘simple majority’ (97.2% of the votes counted); Currency later pares gains
- Yen (JPY) trades broadly firmer in the face of general equity weakness and focus on trade; AUD/JPY drops over 0.5%; yuan (CNY) declines over 0.5%
- Brent Crude futures decline over 1.5% as OPEC+ agreed to raise production
-Offshore yuan falls to lowest level this year and its longest consecutive decline in 2-yrs
- Japan auto makers under pressure, expected to be caught up in US trade wars
-US President Trump said to plan new restrictions on technology exports to China and Chinese investment; announcement expected by the end of the week
***Headlines/Economic Data***
Japan
-Nikkei 225 opened +0.1%
- TOPIX Retail trade index -1%, Information & Communication -1%, Real Estate -0.9% Electric Appliances -0.5%; Securities +0.8%, Marine Transportation +0.6%
- (JP) Japan ruling Liberal Democratic Party (LDP) lawmaker Shigeru Ishiba said to consider announcing candidacy for LDP leader - Japanese Press
- (JP) According to NHK survey, economist see headline BOJ large manufacturers' business conditions for June at 20-23 v 24 in March, would mark second consecutive decline - NHK
- Toshiba, 6502.JP US SEC has completed accounting investigation of unit; did not receive any warning nor fine
-(JP) Japan PM Abe reiterates will keep requesting US tariff exemptions for Japan companies
Korea
-Kospi opened -0.2%
-Lotte, LOTZ.KR Chairman Shin Dong-bin raised stake ~10.5% v ~8.6% prior - Japanese Press
- (KR) Three South Korean vehicle brands, all belonging to Hyundai Motor Group, surpassed their Japanese and German rivals in a United States quality ranking - Korean press
- (KR) According to analysts South Korean shares are expected to remain in a relatively tight range this week as investors take to the sidelines amid global trade tensions - Korean press
- (KR) South Korea sells KRW700B in 20-yr bonds, avg yield 2.60% v 2.76% prior
China/Hong Kong
-Hang Seng opened 0.0%, Shanghai Composite +0.5%
- Hang Seng Materials index -1.9%, Services -1.8%, Industrial Goods -1.1%, Property/Construction -1%, Info Tech -0.7%, Consumer Goods -0.6%, Financials -0.4%; Energy +1.5%, Utilities +0.5%
- (CN) China cuts Reserve Ratio Requirement (RRR) for some banks by 50bps, effective July 5th; (3rd cut this year) as a result releasing CNY700B v CNY400Be in liquidity
- Aluminum Corporation of China Limited, 2600.HK Controlling shareholder Chinalco to increase shareholding in company for not less than CNY400M and no more than CNY1.0B within 12-months
- (HK) Certain banks in Hong Kong said to reduce commissions at mortgage brokerage units - Local Press
- (US) US President Trump said to plan new restrictions on technology exports to China and Chinese investment; announcement expected by the end of the week - US financial press
- (CN) China PBoC Open Market Operation (OMO): Skips OMO operations v CNY70B injected in 7 and 14 day reverse repos prior: Net: injection CNY10B v CNY20B injection prior
- (CN) China PBoC sets yuan reference rate at 6.4893 v 6.4804 prior
-(CN) China Vice Premier Liu He and EU agree to resolutely oppose trade protectionism, defend multilateral system - speaking after summit with EU
Australia/New Zealand
-ASX 200 opened +0.2%
- ASX 200 Financials index -1.2%, Telecom -0.4%, REIT -0.4%; Energy +1.7%, Resources +1.4%, Utilities +0.6%
- Gateway, GTY.AU Hometown raises indicative bid to A$2.35/share (prior A$2.10 prior)
- CBA.AU To demerge wealth management and mortgage broking units; to undertake strategic review of general insurance business including a possible sale
- HT1.AU Confirms to sell Adshel business to oOh!media for A$570M; to conduct A$275M capital raise; fully franked special dividend worth A$220M
North America
- Xerium [XRM]: To be acquired by Andritz for $13.50/shr cash in a $833M deal, includes $590M liabilities
- GE [GE]: Follow Up: Said to be near agreement to sell industrial-engines unit to Advent; sale speculated to raise at least $3.0B – US financial press
Europe
- Erytech, ERYP.FR To discontinue development program for acute lymphoblastic leukemia; announces refocusing of development activities
- (TR) Turkey Elections Board: With 97.2% of votes counted, Erdogan has simple majority
***Levels as of 01:30ET***
- Hang Seng -0.8%; Shanghai Composite -0.1%; Kospi -0.1%; Nikkei225 -0.5%; ASX 200 -0.3%
- Equity Futures: S&P500 -0.4%; Nasdaq100 -0.4%, Dax -0.4%; FTSE100 -0.4%
- EUR 1.1646-1.1673; JPY 109.40-110.03; AUD 0.7417-0.7442;NZD 0.6896-0.6922
- Aug Gold -0.2% at $1,268/oz; Aug Crude Oil -0.2% at $68.44/brl; Jul Copper +0.1% at $3.05/lb