Nikkei 225 opens -0.5% at 37,863
General trend
- JPY gained nearly 1 Big Figure against USD during the Asia session, back to 146 handle, amid comments from US Fed’s Daly saying that it is time to consider adjusting borrowing costs.
- The Nikkei 225 stayed inversely correlated to the Yen, falling -1.7% during the afternoon session.
- Giant Japanese 7-11 retailer Seven & i limit-up >22% on unconfirmed reports that it has received a takeover offer from Canadian giant convenience retailer Alimentation Couche-Tard.
- Commodity currencies Kiwi and Aussie also outperformed +0.5% and 0.4% respectively against USD.
- Hedge funds’ CFTC positions turned net long in the Yen for first time in three years.
- Still more candidates threw their hat into the ring for the Japan ruling-party LDP leadership contest to be held on Sept 27th. There are now around 10 candidates vying to replace PM Kishida.
- China reported YTD Foreign Direct Investment (FDI) through July, which showed a 7th straight acceleration in annual drop pace.
- After the close on Friday yet more pronouncements of economic support from senior Chinese CCP officials and think tanks; including more subsidies in China for NEV purchases, vouchers for Chinese consumers to spend, promises to solve problems Chinese companies face, yet at the same time threatening tighter control and regulation over the operations of finance firms in China.
- Separately, as gold prices hit fresh record highs over $2,500/oz, China PBOC was said to have issued new gold import quotas to several banks. This comes after the PBOC had paused its own build-up of gold reserves in recent months.
- Thailand’s newest (and at 37 the youngest) PM, Paetongtarn Shinawatra, was said to be ready to abandon what has been promoted by the current Govt as a key Thai economic stimulus; a ~$13B cash giveaway to its 50M citizens to spend in their local communities.
- US equity FUTs +0.1% to +0.2% during Asian trading.
Looking ahead (Asian time zone)
- Tue Aug 20th AU RBA Aug 6th Minutes, CN Aug LPR, (Tue night CA July CPI).
- Wed Aug 21st JP July Balance of Trade, KR Aug Biz Conf, (Wed eve Indonesia BI rate decision, Wed night US FOMC July 31st Minutes).
- Thu Aug 22nd AU + JP + ID Aug Flash PMIs, KR BOK rate decision, (Thu eve DE + EU HCOB Aug Flash PMIs).
- Fri Aug 23rd JP July National CPI (Fri night US Fed Powell Jackson Hole speech).
Holidays in Asia this week
- Wed Aug 21st Philippines.
Headlines/economic data
Australia/New Zealand
- ASX 200 opens -0.1% at 7,961.
- Australia Treasurer Chalmers warns of A$3.0B budget hit from iron ore price decline – Australian press [update].
- New Zealand July Performance Service Index (PSI): 44.6 v 40.7 prior (revised higher).
- New Zealand DMO [debt agency]: Announces the launch of a new 4.25% coupon 15 May 2036 nominal bond.
China/Hong Kong
- Hang Seng opens +0.8% at 17,569; Shanghai Composite opens -0.1% at 2,877.
- China Premier Li: Vows to truly solve difficulties faced by enterprises; Necessary to stick to goals and not relax; Will explore new growth points for foreign trade - State Council meeting [weekend update].
- China Commerce Ministry (MOFCOM): Doubles subsidies for purchases of NEVs with trade-ins of gasoline vehicles [weekend update].
- China July YTD Foreign Direct Investment (FDI) (CNY-denominated) Y/Y: -29.6% v -29.1% prior (7th straight acceleration in annual drop pace) [weekend update].
- China issues draft rules on financial firms' compliance management; Notes financial firms should report risks promptly – press [weekend update].
- China strategist at ANZ: The impact of potential cash vouchers in China would be a one-off; China consumption would only pick up sustainably when the crisis-hit property market and stocks start recovering [weekend update].
- China should mull additional direct support to consumers worth at least CNY1.0T; cites government-backed think tank economists quoted in China Daily – financial press [weekend update].
- Reportedly China PBOC issues new gold import quotas to several banks after China PBOC's build-up of gold reserves paused in recent months - press [weekend update].
- China PBOC sets Yuan reference rate: 7.1415 v 7.1464 prior.
- China PBOC Open Market Operation (OMO): Sells CNY52B in 7-day reverse repos; Net drains CNY22B v net injects CNY125B prior.
Japan
- Nikkei 225 opens -0.5% at 37,863.
- Ruling party LDP leadership race to be held on Sept 27th - Japanese press.
- Japan Jun Core Machine Orders M/M: +2.1% v 0.9%e; Y/Y: -1.7% v 1.1%e.
- Japan sells ¥T3.2 vs. ¥3.2T indicated in 12-Month Bills; Avg Yield: 0.2255% v 0.1672% prior; bid-to-cover: 3.08x v 3.94x prior.
- Seven & i (3382.jp) Reportedly receives takeover offer from Alimentation Couche-Tard (Canadian convenience store operator) - financial press, citing sources.
- Japan potentially extends 2+2 defense agreements to include India (following on from Philippines and Australia); Planning 2+2 dialogue in New Dehli Aug 20th - Japanese press.
- (JP) Hedge funds CFTC positions turn net long Yen for first time since 2021 (weekend update).
- Toyota Exec: Toyota is moving to convert most, and eventually maybe all, of its Toyota and Lexus line-up to hybrid-only models- press (update).
- Reportedly Former Japanese economic security minister Takayuki Kobayashi, 49, will announce on Monday his candidacy in the ruling Liberal Democratic Party's leadership election in Sept, joined by Digital transformation minister Taro Kono, 61, taking the total to ~10 jockeying to replace PM Kishida [weekend update].
South Korea
- Kospi opens flat at 2,697.
- South Korea said to consider further extending fuel tax cuts - South Korea press.
Other Asia
- Thailand Q2 GDP Q/Q: 0.8% v 1.0%e; Y/Y: 2.3% v 2.2%e.
- Reportedly new Thailand PM Shinawatra set to abandon key Thai economic stimulus, a ~$13B cash giveaway to its citizens – press [weekend update].
- Indonesia Pres Jokowi Budget Speech: Sees 2025 GDP growth at 5.2% and inflation at 2.5% [weekend update].
- Hong Kong Govt updates 2024 economic outlook: Cuts CPI forecast from 2.4% to 1.9% [weekend update].
North America
- (US) Fed’s Daly (voter) said it is time to consider adjusting borrowing costs – FT [update].
- (US) Fed Chief Powell said to work with bank CEOs to avert legal battle over capital plan for banks; Powell urged bank CEOs to bring their issues to the Fed [weekend update].
- (US) Atlanta Fed GDPNow: Cuts Q3 GDP forecast from 2.4% to 2.0% [weekend update].
- (US) Aug preliminary university of Michigan confidence: 67.8 V 66.9E [weekend update].
- (US) July housing starts: 1.238M V 1.333ME (lowest since June 2020); building permits: 1.396M V 1.425ME (lowest in ~1.5 yrs) [weekend update].
Europe
- (UK) Aug Rightmove House Prices M/M: -1.5% v -0.4% prior; Y/Y: 0.8% v 0.4% prior.
- (NL) Dutch Prime Min Schoof: Expects a 'good result' from talks with US on China chip export rules.
- (IR) Reportedly Iran expected to delay retaliation over killing of Hamas leader to give negotiators time to reach a ceasefire agreement to end the war in Gaza – NYT [weekend update].
Levels as of 01:20 ET
- Nikkei 225 -1.7%; ASX 200 +0.1%; Hang Seng +0.9%; Shanghai Composite +0.4%; Kospi +1.0%.
- Equity S&P500 FUTs +0.1%; Nasdaq100 FUTs +0.1%, Dax -0.1%; FTSE100 flat.
- EUR 1.1023-1.1044: JPY 145.80-148.05; AUD 0.6660-0.6694; NZD 0.6043-0.6087.
- Gold +0.1% at $2,539/oz; Crude Oil -0.3% at $75.25/brl; Copper +0.6% at $4.1703/lb.
Registration link
https://one.exnesstrack.net/boarding/sign-up/a/uq2cbl5o/?campaign=24533
