Article / 29 July 2016 at 1:55 GMT

Morning Report APAC: All eyes on BoJ meeting, with easing expected

APAC Sales Trading Desk / Saxo Capital Markets


  • About 80% of analysts expect some form of easing from the BoJ
  • Platinum and palladium prices have hit highs for this year
  • WTI hovered around a three-month low following US supply gains
  • Iron ore rose overnight with futures in China reaching their highest since April 
  • Rabobank slashed its outlook for wheat and corn, citing a global feed grain glut

By Saxo APAC Sales Trading




21:30: USD - Fed's John Williams discusses policy toolkit in Boston

Overnight news

Thursday was a light day for data, with German July inflation coming in a touch stronger than expected (+0.4% y/y). But despite the firmer tone, the outlook for inflation remains a concern and the 10-year bund yield remains sub-zero

Initial jobless claims for the US rose modestly to 266,000 vs 252,000 the previous week. The noise in the data do not alter the fact that claims remain very low by any historic measure, indicative of a robust labour market.

Foreign exchange


AUDUSD held up reasonably well around its 100 day moving average (0.7485 – three closes above), however, yet again, it found the air above its minor swing 15 day moving average (0.7530 – no close above since 18-July) quite thin.  On the day, 0.7550 represents daily trend line resistance.

The much anticipated Bank of Japan meeting has about 80% of analysts and economists are expecting some form of easing as the stakes are high for Governor Haruhiko Kuroda and his board. However, the yen surged on early Friday as the Japan's currency rose as much as 1.8% to ¥103.41 against the dollar before trading 0.5% stronger at ¥104.77 as of 0840 hours in Singapore. Pricing in FX Option also priced a 2%-2.5% move in the BoJ meeting.


10-year treasuries sank to a record 1.32% this month. Former Federal Reserve Chairman Alan Greenspan is worried about bond prices as it have risen too high. He also highlighted that the US may be heading toward a slow-growth economy coupled with high inflation.

The 10-year bond yield moves slightly higher and is up 0.7 basis points to 1.504%.

Auction of seven-year notes of $103 billion of coupon bearing government debt drew demand in line with recent offerings of the maturity.




US stocks again closed narrowly amid mixed response to earnings. The Dow Jones Industrial Average dipped 15.82 points to 18,456.35. The S&P 500 tacked on 3.48 points to 2,170.06. Winning sectors are staples (+0.5%), tech (+0.3%) and utilities (+0.3%) while Telecoms (-0.7%) posted the only loss of note. The Nasdaq added 0.3%, to 5,154.98.

Ford Motor Co. slumped 8.2% after reporting a Q2 profit of $2bn, down 9% YoY due to a modest slowdown in North American profits combined with weaker sales in China.

Mastercard Inc. leaped 2.4% after it reported adjusted Q2 EPS of $0.96 topped market est: $0.90. Revenue jumped 13% to $2.69bn Better than market est: $2.59bn, as transactions increased at the credit card network.

M&A: Oracle Corp. (+0.6%) agreed to buy NetSuite Inc.(+18.4%) for $9.3bln in cash to bolster its cloud-computing offering. Oracle is paying $109 per share, a 19% premium to NetSuite’s closing price Wednesday.

European stocks retreated amid a flood of corporate earnings and as banks retreated ahead of tonight’s stress test results. The FTSEurofirst 300 index fell 1%, to 1,338.28. The Stoxx 600 banks index slid 2.3%. In London the FTSE 100 declined 0.4%, to 6,721.06.

Lloyds tanked 5.8% after it warned of a likely drop in demand due to Brexit. The bank announced 3,000 job cuts and 200 branch closures. Rolls-Royce spiked 14% after the engine maker forecast a stronger H2 performance.

Anglo American leapt 5.4% as the market responded favourably to a better net debt outcome even as the first-half net loss widened to $813mln.

Asia-Pacific earnings (Singapore times: GMT plus 8 hours)

  • Aisin Seiki (7259 JP) Q1 1200 hours
  • Astellas Pharma (4503 JP) Q1 1100 hours
  • Bank of Kyoto (8369 JP) Q1 1300 hours
  • Central Japan Railway (9022 JP) Q1 1400 hours
  • Chubu Electric Power (9502 JP) Q1 1400 hours
  • Daiichi Sankyo (4568 JP) Q1 ¥32.0bn (3 analysts) 1200 hours
  • Denso Corp (6902 JP) Q1 ¥67.7bn (3 analysts) 1020 hoursam
  • East Japan Railway (9020 JP) Q1 1400 hours
  • Electric Power Development (9513 JP) Q1 1500 hours
  • Ezaki Glico (2206 JP) Q1 1400 hours
  • Fuji Media Holdings (4676 JP) Q1 1400 hours
  • Hirose Electric (6806 JP) Q1 6.9b yen (5 analysts) 3pm
  • Hitachi (6501 JP) Q1 ¥93.3bn (4 analysts) 1400 hours
  • Hoya Corp (7741 JP) Q1 1230 hours
  • IHI (7013 JP) Q1 1300 hours
  • Isetan Mitsukoshi (3099 JP) Q1 1200 hours
  • Japan Airlines (9201 JP) Q1 1400 hours
  • Jardine Matheson (JM SP) H1
  • Jardine Strategic (JS SP) H1
  • JFE (5411 JP) Q1 1400 hours
  • JTekt (6473 JP) Q1 1220 hours
  • Kansai Electric Power (9503 JP) Q1 1400 hours
  • Kawasaki Heavy Industries (7012 JP) Q1 1030 hours
  • Keisei Electric Railway (9009 JP) Q1 1400 hours
  • Kinden (1944 JP) Q1 1400 hours
  • Kobe Steel (5406 JP) Q1 1430 hours
  • Konami Holdings Corp (9766 JP) Q1 1000 hours
  • Kose Corp (4922 JP) Q1 1400 hours
  • Kurita Water Industries (6370 JP) Q1 1400 hours
  • Kyowa Hakko Kirin (4151 JP) H1 1400 hours
  • Kyushu Electric Power (9508 JP) Q1 1400 hours
  • Mazda Motor (7261 JP) Q1 ¥39.8bn (8 analysts) 1400 hours
  • Medipal Holdings (7459 JP) Q1 1400 hours
  • Miraca (4544 JP) Q1 1400 hours
  • Mitsubishi Heavy Industries (7011 JP) Q1 12:30pm
  • Mitsui OSK Lines (9104 JP) Q1 1030 hours
  • Mizuho Financial Group (8411 JP) Q1 1500 hours
  • Nabtesco (6268 JP) H1 1500 hours
  • Nankai Electric Railway (9044 JP) Q1 1300 hours
  • NEC Corp (6701 JP) Q1 1400 hours
  • Nestle India (NEST IN) Q2
  • NGK Spark Plug (5334 JP) Q1 ¥11.0bn (4 analysts) 1500 hours
  • NH Foods (2282 JP) Q1 1400 hours
  • Nifco Inc (7988 JP) Q1 7.6b yen (3 analysts) 1400 hours
  • Nippon Express (9062 JP) Q1 1200 hours
  • Nippon Yusen (9101 JP) Q1 1100 hours
  • Nitto Denko (6988 JP) Q1 ¥15.8bn (5 analysts) 1500 hours
  • NTT Docomo (9437 JP) Q1 1400 hours
  • Odakyu Electric Railway (9007 JP) Q1 1300 hours
  • Panasonic Corp (6752 JP) Q1 ¥70.8bn (7 analysts) 1600 hours
  • Pidilite Industries (PIDI IN) Q1
  • Resona (8308 JP) Q1 1500 hours
  • Seria (2782 JP) Q1 1400 hours
  • Sohgo Security Services (2331 JP) Q1 1300 hours
  • Sony Corp (6758 JP) Q1 ¥3.1bn loss (8 analysts) 1400 hours Preview
  • Sotetsu (9003 JP) Q1 1300 hours
  • Start Today (3092 JP) Q1
  • Sumitomo Chemical (4005 JP) Q1 ¥25.5bn (4 analysts) 1400 hours
  • Sumitomo Forestry (1911 JP) Q1 1200 hours
  • Sumitomo Heavy Industries (6302 JP) Q1 1400 hours
  • Takeda Pharmaceutical (4502 JP) Q1 124.4b yen (4 analysts) 1400 hours
  • TDK Corp (6762 JP) Q1 ¥15.0bn (5 analysts) 1400 hours
  • Tokyo Electron (8035 JP) Q1 ¥31.1bn (5 analysts) 1430 hours
  • Tokyo Gas (9531 JP) Q1 1300 hours
  • Toto (5332 JP) Q1 1400 hours
  • Toyo Seikan (5901 JP) Q1 1500 hours
  • Toyo Suisan Kaisha (2875 JP) Q1 11am
  • Toyoda Gosei (7282 JP) Q1 1340 hours
  • Toyota Boshoku (3116 JP) Q1 1300 hours
  • Toyota Industries (6201 JP) Q1 ¥27.8bn (3 analysts) 1040 hours
  • Toyota Tsusho (8015 JP) Q1 1240 hours
  • United Industrial (UIC SP) Q2
  • Yakult Honsha (2267 JP) Q1 ¥8.2bn (3 analysts) 1330 hours
  • Yamato (9064 JP) Q1 1400 hours


 Food for thought ... a European bank has slashed its outlook for wheat and corn, citing a global feed grain glut. Photo: iStock


– Edited by Robert Ryan

This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter

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