Morning Report APAC: Asia opens lower as Dow rockets
- Asian markets opened largely in the red
- The Dow Jones closed above 22,000 as Apple's earnings were better than expected
- The US dollar index remains on its downtrend move with not much support
- The EUR continues its bullish trend with no major resistance topside
By Saxo APAC Sales Trading
Speeches
- 1630 – EC – European Central Bank publishes economic bulletin
- 1930 – UK – Bank of England Governor Mark Carney holds inflation report press conference
Overnight news
United States
- ADP was strong, printing 178,000 in July from an upward revision of 191,000 (Previously 158,000).
Federal Reserve
Few Fed speakers last night:
- John Williams (San Francisco Fed president, non-voter) said “We still have a ways to go in terms of inflation ... To keep the economy on a sustainable path of growth, we need to gradually reduce the monetary stimulus put in place during the recession and recovery.”
- Loretta Mester (Cleveland, non-voter): “I thought it was time to acknowledge that even as labour markets continue to tighten, inflation has remained moderate."
- James Bullard (St Louis, non-voter): “Given the inflation outlook, which has deteriorated in 2017, I would not support further moves in the near term ... It’s possible data will turn around, but we’ll have to see. I think for now we should remain on pause."
Washington
- US President Donald Trump on Wednesday signed a bipartisan bill placing new sanctions on Russia – but in a statement, he claimed multiple aspects of the legislation violate the Constitution.
- Trump has watched his ratings decline for months, but on Wednesday a Quinnipiac University poll and a Gallup poll showed that only a third of Americans voters view him favourably – a new low less than 200 days into his presidency. Of the voters surveyed by Quinnipiac, 61% disapproved of Trump's job performance, with over 60% also saying that he “is not honest,” “does not have good leadership skills” and “does not share their values.”
- Trump is considering an investigation into what he considers China's unfair business practices. These include intellectual property theft, trade agreement violations and "discriminatory" actions against American companies.
- The USD was mixed overnight with basically only EURUSD and EURCHF higher. DXY is still on its downtrend move with not much support below except the 2016 low at 91.919.
- The EUR continues its bullish trend with no major resistance topside. In the short term, we should see some buying interest at 1.1800. The correlation seems to break between USD and some currencies so we see good interest from funds to buy EURJPY, EURAUD, EURNZD
- USDJPY seems to be supported on the long-term trend line, which is now at 110.00. Contact us if you want to receive the graph.
- Emerging Markets: USD was mixed against EM as well with USD Asia finding good support at the current levels with not much equity inflows to signal.
Foreign exchange movements
- The market interest is in EURUSD and EUR crosses (see above) for upside strikes for maturity ranging from three weeks to two months.
- The market seems short gamma in NZD and is buying volatility
- US Treasuries fell across 2-year-10-year tenors, while long-end gained as a pair of Fed speakers expressed caution over further rate hikes.
- EGBs posted marginal gains with yields ending within 1 basis point, while gilts underperformed.
- Dow Jones was the best performer as it successfully closed above the 22,000 level as Apple's earnings was much better than expected. Both Nasdaq and S&P500 closed flat yesterday.
- Illumina earnings were well received as the gene-sequencing specialist said that revenue rose 10% from the year-ago quarter. Strong demand for the NovaSeq sequencing system and for microarray services showed the growth potential for Illumina's core products. Illumina rose 14.8% and closed at record level.
- Tesla posted a narrower-than-expected second-quarter loss after market hours yesterday, boosted by revenue that nearly doubled, thanks to the strong demand of its Model S sedan and Model X SUVs. Elon Musk reiteration on hitting the targets for Model 3 as the stock surged after market hours.
Asia-Pacific stocks
Hong Kong
Analyst ratings
- CIMC Enric (3899 HK): Cut to Neutral at UBS, PT HK$5.90
- Henderson Land (12 HK): New Buy at Haitong Intl, PT HK$60.80
- PetroChina (857 HK): H Shares Raised to Outperform at Macquarie
- Zhongsheng (881 HK): Raised to Overweight at Morgan Stanley, PT HK$2
Preview
- 13 Holdings (577 HK): Lavish Casino’s Gamble Comes Up Short for Wall Street Investors
- Ali Pictures (1060 HK): Alibaba Pictures Says Yu Yongfu Has Stepped Down as CEO
- China Vanke (2202 HK): China Vanke July Sales Total 35.6B Yuan
- CRRC (601766 CH): Prasarana Awards Rail Contract to CRRC Zhuzhou, Siemens China
- Fosun Int’l (656 HK): Advent Is Said to Still Be Interested in Buying Gland: CNBC-TV18
- Freeman FinTech (279 HK): Wins Finance Closes Deal to Sell 67% of Co. to Freeman FinTech
- GNW/Oceanwide (715 HK)： GNW/Oceanwide Said to Get Positive Feedback From China: DealRep
- HKEX (388 HK): HKEX Says Iain Greig Steps Down as COO of LME Clear
- HKEX (388 HK): HKEX to Lower Yuan Margin Collateral to 2.7% After Aug. 7 Close
- Hongqiao (1378 HK)：China Hongqiao Aluminum Capacity Capped as Older Plants Retired
- HSBC (5 HK): U.A.E.’s Sharjah Hires HSBC to Set up Dollar Sukuk Program: Rtrs
- HSBC (5 HK): HSBC Bought Back 1.98m Shares at Avg 763.82 Pence Each Aug. 2
- Kangde Xin (002450 CH): Kangde Xin Prelim. 1H Net 1.26b Yuan vs 927.4m Yuan Year Ago
- Lenovo (992 HK): Severstal to Build Biggest Russian ‘Data Lake’ to Boost Analysis
- Leshi Internet (300104 CH): Leshi Internet Negotiating With CCB on 200m Yuan Lending Risks
- Shanghai Industrial (563 HK): Shanghai Industrial Bids 2.2b Yuan for Land Parcel in Shanghai
- Shenhua (1088 HK): Guodian Says Shenhua Merger Plan Submitted for Approval: Jiemian
- Standard Chartered (2888 HK): Standard Chartered First Half Adjusted Operating Income $7.2 Bln
- Standard Chartered (2888 HK): StanChart 1H Operating Income In Line; Shares Drop
- Standard Chartered (2888 HK): StanChart Keen to Resume Dividend in Sustainable Manner: Hung
- Tencent (700 HK): China’s Meituan Is Said In Talks To Raise As Much As $5b
- Wanda Hotel (169 HK): Wanda Group Is Said to Have Set Up Health Unit: the Paper
Japan
Analyst ratings
- Azbil (6845): Raised to outperform from neutral at Macquarie
- Maruwa Unyu Kikan (9090): Cut to hold from buy at Mitsubishi UFJ Morgan Stanley
- Net One Systems (7518): Raised to neutral from underweight at Mitsubishi UFJ Morgan Stanley
- Oriental Land (4661): Cut to hold from buy at Jefferies
- Seiko Epson (6724): Cut to neutral from buy at Okasan Securities
- Start Today (3092 JP): Rated new neutral plus at Iwai Cosmo
- TDK (6762): Cut to hold from buy at Morningstar
Preview
- ABC-Mart (2670): July same-store sales +2.3% y/y
- Adastria (2685): July same-store sales -2.2% y/y
- ANA Holdings (9202): 1Q operating profit +80% y/y to 25.4b yen
- Asahi Broadcasting (9405): 1Q operating profit slips 7% to 656m yen
- Casio Computer (6952): 1Q net income +74% y/y to 4.2b yen
- Chugoku Bank (8382): 1Q net income slides 46% y/y to 4.09b yen
- Colopl (3668): 9-month operating profit drops 62% y/y to 9.8b yen
- Fast Retailing (9983): Japan Uniqlo sales rise 3.7% y/y in July
- Furukawa Electric (5801): Lifts full-year operating profit forecast 16% to 43b yen as 1Q operating profit more than doubles to 10.4b yen
- Hiroshima Bank (8379): 1Q net income slips 19% y/y to 8.3b yen
- Hitachi Zosen (7004): 1Q operating loss widens to 3.85b yen from loss of 2.4b yen a year earlier
- Ibiden (4062): 1Q operating profit more than doubles y/y to 3b yen
- Japan Tobacco (2914): Lifts full-year operating profit outlook to 565b yen from 560b yen
- Kikkoman (2801): 1Q operating profit +15% y/y to 9.7b yen
- Mazda Motor (7261): 1Q operating profit slides 24% to 39.9b yen while net income +72% to 36.6b yen
- Nichicon (6996): 1Q operating profit more than doubles to 1.07b yen, lifts full-year target 18%
- NTN (6472): 1Q operating profit -21% to 8.6b yen
- Ryohin Keikaku (7453): July same-store sales +12.4% y/y
- Seiko Holdings (8050): 1Q operating profit more than triples y/y to 2.7b yen
- Shinsei Bank (8303): 1Q net income +34% y/y, keeps full-year forecasts unchanged
- Start Today (3092): Rated new neutral plus at Iwai Cosmo
- Tokai Carbon (5301): Swings to 1H operating profit of 4.2b yen from 80m yen loss a year earlier
- Toyota Motor (7203): China July vehicle sales +11.4%
- UACJ (5741): 1Q operating profit +93% to 9.5b yen
- United Arrows (7606): July same-store sales -0.2% y/y
- Yamazaki Baking (2212): 1H operating profit 16.8b yen vs co. forecast 19b yen
- Yodogawa Steel (5451): 1Q operating profit +24% y/y to 4.1b yen
Australia
Analyst ratings
- ANN AU: Ansell Raised to Buy at Morningstar
- CCP AU: Credit Corp Raised to Buy at APP Securities, PT A$20.70
- LLC AU: LendLease Raised to Hold at Morningstar
- MTR AU: Mantra Group Cut to Equal-weight at Morgan Stanley, PT A$3.20
- RMD AU: ResMed Cut to Neutral at Credit Suisse, PT A$9.40; Raised to Buyat Citi; Cut to Neutral at BofAML, PT A$9.90
- SHV AU: Select Harvests Cut to Reduce at Morgans Financial, PT A$4.05
Preview
- CWN AU: China Gaming Crackdown Redraws Battle Lines in Sydney Casino War
- DXS AU: Dexus’ Still-Lofty Office Cap Rates May Have Further to Fall
- DOW AU: Downer EDI to report FY earnings
- MET NZ: Metlifecare Gets Resource Consent for Red Beach Village
- NZX NZ: NZX July Trading Volum Rises 24% Y/y
- RMD AU: ResMed Shares Decline 5%; Trading Volume Soars; ResMedForecast Disappoints, Shows No ‘Banner Year’: Street Wrap
- RIO AU: Rio Tinto CEO Picks Dividends Over Deals as Recovery Gains Momentum
- SUN AU: Suncorp FY earnings
- ZIM AU: Impala’s Zimbabwe Unit Says 1Q Rev. Rises 11% Y/Y: The Source
– Edited by Gayle Bryant
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