Asian Mid-session Update: Rumors of Greek agreement lift US equity futures
***Economic Data***
- (NZ) NEW ZEALAND Q2 WESTPAC CONSUMER CONFIDENCE:113.0 V 117.4 PRIOR; 2-year low
- (NZ) NEW ZEALAND MAY CREDIT CARD SPENDING M/M: +1.9% V -0.4% PRIOR; Y/Y: 7.1% V 7.2% PRIOR
- (NZ) New Zealand May Net Migration: 5.1K v 4.7K prior
***Index Snapshot (as of 03:00 GMT)***
- Nikkei225 +0.8%, S&P/ASX -0.2%, Kospi +0.2%, Shanghai Composite closed, Hang Seng +0.5%, Sep S&P500 +0.4% at 2,106
***Commodities/Fixed Income***
- Aug gold -0.1% at $1,199/oz, Aug crude oil +0.2% at $59.80/brl, Jul copper flat at $2.57/lb
- (KR) South Korea Fin Ministry sells 20-year bonds at 2.715%
- JGB: (JP) BOJ offers to buy ¥400B in 5-10yr JGBs, ¥240B in 10-25yr JGBs, ¥140B in 25yr+ JGBs, and ¥1T in T-bills
***Market Focal Points/FX***
- Asian indices are mixed as caution related to the impact of a potential breakdown in Greek negotiations persists. US equity futures are trading up 0.4% and EUR/USD did rise about 40pips above $1.1380 on some weekend chatter that PM Tsipras has offered new proposals to creditors ahead of the Monday summit consisting of reduction of tax breaks leading to smaller pension payments. Separate reports also indicating Germany's Merkel, France's Hollande, and Greek PM Tsipras held phone talks on Sunday and could be approaching an "imminent agreement". On the flip side, Bank of Greece is said to have called for another emergency ECB session to secure more ELA funding for the banking system enduring rapidly increasing withdrawals by panicked depositors. German Fin Min Schaeuble has also demonstrated few signs of willingness to compromise, calling on Athens to carry out promised reforms to maintain trust in Europe.
- Shanghai Daily was closed for the holiday, though investors across the globe will surely track its activity for the balance of the week after a 6% drop on Friday and 13% slide last week. Of note, a research piece from Xinan Securities estimates as much as CNY41.7B in lockup shares becoming tradable on the Shanghai and Shenzhen exchanges this week.
- In Japan, Nikkei225 outperformed the regional indices despite the flat exchange rate, with USD/JPY trapped in 122.50-123 range. Following recent GDP data demonstrating as much, local press citing a survey saw Japan's businesses increasingly more willing to make capital investments - some 53% of respondents said they would increase spending, up from 46% prior. Later in the session, financial press citing a draft fiscal blueprint seeking a more flexible approach vs a rigid cap on spending for the next 3 years to help cushion the economy ahead of the expected 2nd round of sales tax increase to 10% in Apr 2017.
- South Korea's Fin Min Choi signaled the govt is prepared to put together an extra stimulus budget to help offset the economic impact of MERS outbreak. Earlier, Korea reported 3 new MERS cases and 2 more related deaths, bringing the MERS toll to 27. Choi added the economy is in low growth mode, though household debt is at a manageable level.
***Equities***
US ADRs:
- ETE: Confirms proposal to merge with Williams in all equity transaction valued at $53.1B
- CI: Anthem Proposal Inadequate and Not in Best Interests of Cigna Shareholders (CI: Anthem proposes to acquire Cigna at $184/shr in cash and stock; valued at $53.8B)
- AMD: Said to be considering breaking up the company and spinoff opportunities - press
Asia-Pacific:
- Financials: IFL.AU -13.9%: IOOF says number of misleading statements have been made by former employee - financial press
- Healthcare: HSP.AU -0.8%: TPG and Carlyle said to be considering exiting their A$1.8B shareholding - AFR
- Industrials: MAH.AU -1.0%: Announces asset impairment of A$95-125M