Asian Mid-session Update: Equities rally into the weekend as Greece confirms banks will reopen
***Economic Data***
- (NZ) NEW ZEALAND JUN ANZ JOB ADVERTISEMENTS M/M: -0.6% V -0.6% PRIOR
- (AU) Australia May Conference Board Leading index m/m: +0.2% v -0.3% prior
- (KR) South Korea Jun PPI Y/Y: -3.6% v -3.5% prior; 11th month of decline
- (US) MAY NET LONG-TERM TIC FLOWS: $93B V $30.0BE; TOTAL NET TIC FLOWS: $115B V $106.6B PRIOR
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +0.2%, S&P/ASX flat, Kospi -0.7%, Shanghai Composite +1.7%, Hang Seng +1.0%, Sept S&P500 flat at 2,116
***Commodities/Fixed Income***
- Aug gold flat at $1,143/oz, Aug crude oil +0.4% at $51.13/brl, Sept copper flat at $2.52/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 1.2 tonnes to 707.9 tonnes
- (JP) BOJ offers to buy ¥375B in 1-3yr JGBs, ¥425B in 3-5yr JGBs, ¥240B in 10-25yr JGBs, and ¥140B in 25yr+ JGBs
- (AU) Australia MoF (AOFM) sells A$800M in 1.75% 2020 Bonds; avg yield: 2.3636%; bid-to-cover: 3.95x
- USD/CNY: PBoC sets yuan mid point at 6.1192 v 6.1173 prior setting; weakest Yuan setting since Jun 8th
- (US) Weekly Fed Balance Sheet Total Assets for week ending July 15th: $4.49T v $4.48T prior; M1 y/y change: 7.2% v 7.4% prior; M2 y/y change: 5.8% v 5.9% prior
***Market Focal Points/FX***
After another volatile week, Shanghai Composite is posting solid gains on what had previously been a terrible trading day (Friday) in recent weeks. With a near 2% rally, Shanghai Composite is now unchanged from last Friday's close heading into the break. After yesterday's growth downgrade for China and the region by the ADB, today's comments from World Bank were more upbeat, indicating the country's economic fundamentals are sound. China Securities Finance (CSF) continues to provide liquidity, with reports of the entity having received a credit facility of CNY2T from banks.
Going into Friday's formal vote in Germany's Bundestag lower house of parliament, a resounding majority of conservative lawmakers had reportedly voted in favor of starting talks on the Greek bailout. Reports suggest this gives Chancellor Merkel the mandate to proceed to negotiations. Separately, Greek Finance Minister also confirmed earlier speculation that banks will reopen on Monday after the ECB lifted the cap on ELA lending, though separate reports indicated the daily ATM withdrawal limit would be unchanged at €60 per day. The yield on the Greek 10-year continued to come off its recent highs, falling over 80bps toward 11%.
In FX, NZD/USD was once again the most active among USD majors, rising nearly 40pips toward 0.6540, although the move was considered to be corrective after a steep decline this week to 6-year lows. Analysts with Westpac are particularly aggressive in expectation of further RBNZ easing, forecasting 125bps in additional cuts to 2.00% with possibility of a 50bp move. AUD/USD was up just over 10pips above $0.7410, while USD/JPY traded in a 20pip range above 124. USD will likely see more volatile trading in early US hours with the release of the US CPI data.
***Equities***
US equities / ADRs:
- HTZ: Reports Q1 -$0.15, R$2.45B (v prelim Rev $2.44B given on 5/14) - quarterly filing; +13.7% afterhours
- GOOGL: Reports Q2 $6.99 v $6.76e, R$14.35B v $14.2Be; +12.2% afterhours
- AMD: Reports Q2 -$0.23 v -$0.16e, R$942M v $957Me; +2.7% afterhours
- SLB: Reports Q2 $0.88 v $0.79e, R$9.01B v $9.12Be; +1.4% afterhours
- MAT: Reports Q2 +$0.01 v -$0.05e, R$989M v $1.0Be; +0.4% afterhours
- SWI: Reports Q2 $0.52 v $0.46e, R$119.1M v $123Me; -9.5% afterhours
Notable movers by sector:
- Consumer discretionary: Tongkun Group Co Ltd 601233.CN +5.7% (H1 guidance); Vinda International 3331.HK -1.6% (H1 result)
- Financials: Industrial Securities 601377.CN +3.2% (H1 result); Dongxing Securities Co 601198.CN +3.9% (H1 result); Everbright Securities Co 601788.CN +7.3% (H1 guidance); China Merchants Land 978.HK +3.8% (H1 guidance)
- Industrials: Chongqing Gangjiu Co 600279.CN +4.0% (H1result); Samsung Heavy Industries 010140.KR -12.7% (Q2 result speculation)
- Technology: TSMC 2330.TW +2.2% (Q2 result); Sharp Corp 6753.JP -3.5% (Q1 result speculation)
- Materials: China Nonferrous Metals 1258.HK -9.4% (H1 guidance); Lynas Corp LYC.AU +6.6% (quarterly result)
- Energy: Santos Ltd STO.AU -0.3% (Q2 result)