Asia Mid-Session Market Update: Widespread dollar strength across the region; China MOFCOM warns trade is facing large downward pressures
***Economic Data***
- (KR) SOUTH KOREA JULY PPI Y/Y: -2.4% V -2.7% PRIOR
- (NZ) NEW ZEALAND JUL CREDIT CARD SPENDING M/M: +2.3% V -0.9% PRIOR; Y/Y: 5.6% V 4.1% PRIOR
- (NZ) New Zealand July Net Migration: 5.6K v 5.7K prior
- (KR) South Korea Q2 Household Disposable Income y/y: +0.1% v -0.1% prior
- (JP) Japan Jun All Industry Activity Index M/M: 1.0% v 0.9%e
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.1%, S&P/ASX +0.2%, Kospi -0.1%, Shanghai Composite -0.5%, Hang Seng -0.5%, Sep S&P500 -0.1% at 2,182
***Commodities/Fixed Income***
- Dec gold -0.4% at $1,352/oz, Sep crude oil +0.2% at $48.37/brl,; Sep copper 0.0% at $2.17/lb; Sept Silver -0.6% at $19.63/oz
- (CN) PBOC SETS YUAN MID POINT AT 6.211 V 6.6273 PRIOR
- (CN) PBOC to inject CNY45B in 7-day reverse repos; injects CNY15.5B for the week v injects CNY90B las week
- (AU) Australia MoF sells A$700M in 2.25% 2028 bonds, avg yield 2.0242%; bid-to-cover 1.98x
- USD/KRW: Onshore opens at KRW1,108 v KRW1,107 prior close
- (CN) China MoF sells 3-months bills at 1.9868%
- (CN) China MoF sells 30-yr bonds at 3.27%; bid-to-cover 3.8x
***Market Focal Points/FX***
- Asian equity markets started the session out slightly to the upside before sliding to unchanged levels, heading into the latter half of the session, Shanghai and Hong Kong declined. Focus remains on forex markets with the USD gaining against A$ (0.7%); JPY (0.6%); NZ$ (0.5) as well as the Euro, Pound and Swiss Franc. Oil names benefited from the higher oil prices, Woodside +2.2% and BHP +1.7 despite weaker results.
- After the US close, Fed's Williams called for a rate hike sooner rather than later, indicating a rising interest rate is what makes sense. Later in the session Fed's Kaplan declined to comment on rate changes any time soon. He did say US election irrelevant to when Fed will act.
- China Commerce Ministry (MOFCOM) Official said that foreign trade faces very large downward pressure; Exports may slow even more this year. Reminder in July China reported a surplus of $52.3B, a 6-month high, while exports were -4.4%.
- China Industry Ministry official said that steel capacity reduction to date is satisfactory and that the government has allotted CNY30.7B to facilitate capacity cuts in coal and steel. Coal names were under pressure in China on a report that Shanxi coal industry was in heavy debt.
- Indonesia Fin Min Indrawati said monetary and fiscal policy need to address people in need ahead of the central bank's interest rate decision later today. Indonesia debt was priced slightly higher with some speculation that the bank could cut rates, though analysts expect rates to remain unchanged.
***Equities***
US equities / ADRs:
- NWY, New York & Company (earnings), +24.4% after hours
- SHLM, A. Schulman (CEO steps down), +12.7% afterhours
- CERU, Cerulean Pharma (cuts workforce by 48%), +0.8% after hours
- ESV, Ensco (early termination of contract), -2.1% afterhours
- AMAT, Applied Materials (earnings), +5.5% afterhours
- CSPI, CSP Inc (earnings), +15.5% afterhours
Notable movers by sector:
- Consumer staples: BAL.AU, Bellamy 's (FY16 earnings) +5.4%
- Financials: 2007.HK, Country Garden (H1 earnings) 5%; AAD.AU, Ardent Leisure (selling health clubs) 15%; Medibank; MPL.AU (expects to ongoing market share loss) -4.5%
- Industrials: CWY.AU, Cleanaway Waste (FY16 earnings) +13.6%
- Technology: 3436.JP, Sumco (rival acquires SunEdison) +6.1%
- Materials: WSA.AU, Western Areas (1-yr high) +5.4%; WHC.AU, Whitehaven Coal (lowest level since mid-Jan) -12.7%
- Energy: 135.HK, Kunlun Energy; (H1 results) +5.1%; 1605.JP, Inpex (oil strength) +3%
- Healthcare: 1066.HK, Shandong Weigao Group Medical Polymer (H1 results) +2.6%
- Telecom: 941.HK, China Mobile (July subscribers higher) +0.2%