Asian Mid-session Market Update: Japan Fin Min signals caution ahead of Brexit vote; North Korea testing short-range missiles
***Economic Data***
- (AU) AUSTRALIA MAY SKILLED VACANCIES M/M: 1.0% V 0.8% PRIOR
- (AU) AUSTRALIA MAY WESTPAC LEADING INDEX M/M: 0.2% V 0.1% PRIOR; 16-month high
- (NZ) NEW ZEALAND MAY RETAIL CREDIT CARD SPENDING M/M: 0.0% V 2.4% PRIOR; Y/Y: 5.9% V 9.1% PRIOR
- (NZ) New Zealand May Net Migration: 5.5K v 5.5K prior; YTD 68.4K, record high
- (TW) Taiwan May Unemployment rate Y/Y: 4.0% v 4.0%e
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -0.7%, S&P/ASX +0.3%, Kospi +0.5%, Shanghai Composite +0.5%, Hang Seng +0.4%, Sep S&P500 +0.1% at 2,082
***Commodities/Fixed Income***
- Aug gold -0.1% at $1,271/oz, Aug crude oil +0.5% at $50.12/brl, Jul copper -0.4% at $2.12/lb
- (US) Weekly API Oil Inventories: Crude: -5.2M v +1.2M prior; largest draw since Jan 5th
- GLD: SPDR Gold Trust ETF daily holdings rise 3.5 tonnes to 912.3 tonnes; highest since Oct 2013
- SLV: iShares Silver Trust ETF daily holdings fall to 10,359 tonnes from 10,403 tonnes prior; lowest since Apr 3rd
- (CN) China MoF sells 3-year bonds at 2.558%
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.5935 V 6.5656 PRIOR
- (CN) PBOC to inject CNY150B in 7-day reverse repos
- (JP) BOJ offers to buy ¥350B in 1-3yr JGBs, ¥440B in 3-5yr JGBs, ¥450B in 5-10yr JGBs, and ¥100B in floating-rate JGBs
- (AU) Australia MoF (AOFM) sells A$900M in 4.25% 2026 bonds; avg yield 2.205% v 2.414% May 3rd; bid-to-cover 2.47x v 2.89x May 3rd
***Market Focal Points/FX***
- Asia equities are in a holding pattern ahead of Thursday's Brexit vote. Latest poll of certain voters from ORB saw a slight gain in support for Remain - 54% vs 46% for leave (prior 53% for remain, 46% for leave).
- China Premier Li echoed PBoC remarks overnight, pledging to continue prudent monetary and proactive fiscal policies, aiming to maintain reasonable growth in aggregate credit. Also in China, Moody's warns of rising risks to financial system from banks' investment in loans.
- S&P chief economist endorses recent PM Abe decision not to raise consumption tax next year; Japan Finance Ministry signals it will not conduct unilateral FX intervention on Friday even if Leave camp in Brexit vote succeeds.
- North Korea fired two short-range missile - first believed to have failed but the 2nd travelled about 400km; Japan plans to protest the launch. Bank of Korea Gov Lee cautioned that uncertainties in Korean economy - risks associated with Fed hikes and rising domestic household debt - are rising.
- In FX majors, GBP/USD was bid about 70pips toward 1.47, USD/JPY came in about 50pips below 104.40, AUD/USD ranging in 0.7440-70, NZD/USD advancing 25pips above 0.7140. PBoC Yuan fix was the weakest since Apr 15th.
***Equities***
US equities / ADRs:
- SCTY: Tesla offers to acquire SolarCity in all stock proposal with exchange ratio of 0.122-0.131 shares/shr (valued at $26.50-28.50/shr or $2.5-3.0B) - Tesla blog; +14.7% afterhours; TSLA -12.2%
- CHDN to enter S&P midcap 400 index; +4.7% afterhours
- LZB: Reports Q4 $0.45* v $0.48e, R$417M v $416Me; +3.2% afterhours
- KBH: Reports Q2 $0.17 v $0.16e, R$811M v $753Me; +1.7% afterhours
- FDX: Reports Q4 $3.30 v $3.26e, R$13.0B v $12.8Be; -1.2% afterhours
- HPQ: To make one time investment to reduce supply inventory over two quarters - printing update call; -2.9% afterhours
- QEP: Acquires additional oil properties in core of Permian Basin for $600M from several sellers; -3.5% afterhours
- ADBE: Reports Q2 $0.71 v $0.68e, R$1.40B v $1.40Be; Guides Q3 $0.69-0.75 v $0.71e, R$1.42-1.47B v 1.46Be; -4.8% afterhours
Notable movers by sector:
- Consumer discretionary: Li Ning Co 2331.HK +5.6% (Outperform at Credit Suisse)
- Financials: WesFarmers WES.AU -0.6% (impairment charge)
- Industrials: Mitsubishi Motors 7211.JP +2.1% (initial FY guidance); Suzuki Motor Corp 7269.JP +3.5% (Goldman raises to buy)
- Technology: Tencent 700.HK +2.1% (to buy Supercell)
- Materials: Saracen Mineral SAR.AU -7.9%; Regis Resources RRL.AU -4.8%; Evolution Mining EVN.AU -4.6% (gold price falls)
- Energy: Tokyo Gas 9531.JP -6.6% (acquisition)
- Telecom: P: Softbank Corp 9984.JP +3.0% (to sell Supercell stake; President to step down)