Morning Report APAC: Asian stocks retreat, oil holds below $45/b
- In early trading, shares were declining in Japan and South Korea
- Equity index futures for China and Hong Kong were little changed
- IMF cuts global growth forecast for 2017 by 0.1% to 3.4%
- The MSCI Asia Pacific Index was down 0.2% as of 0116 GMT
- The dollar was steady against the yen at 106.11 yen
- WTI and Brent fell to their lowest levels since early May
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time)
- 0830 AU Westpac Leading Index MoM Jun (prev. 0.21%)
- 0900 AU Skilled Vacancies MoM Jun (prev. 1.00%)
- 1330 JN Nationwide Dept Sales YoY Jun (prev. -5.10%)
- 1330 JN Tokyo Dept Store Sales YoY Jun (prev. -4.50%)
- 1400 GE PPI MoM Jun (0.20% exp. 0.40% prev.)
- 1400 GE PPI YoY Jun (exp. -2.40%, -2.70% prev.)
- 1500 JN Convenience Store Sales YoY Jun (-0.30% prev.)
- 1600 EC ECB Current Account SA May (36.2b prev.)
- 1600 EC Current Account NSA May(34.0b prev.)
- 1630 UK Claimant Count Rate Jun (2.20% exp. 2.20% prev.)
- 1630 UK Jobless Claims Change Jun (3.5k exp. -0.4k prev.)
- 1630 UK Average Weekly Earnings 3M/YoY May (2.30% exp. 2.00%)
- 1630 UK Weekly Earnings ex-Bonus 3M/YoY May (2.40% exp. 2.30% prev.)
- 1630 UK ILO Unemployment Rate 3Mths May (5.00% exp. 5.00% prev.)
- 1630 UK Employment Change 3M/3M May (73k exp. 55k prev.)
- 2000 EC Consumer Confidence Jul A (-8 exp. -7.3 prev.)
- 1125 GBP – BOE governor Mark Carney, China’s Li, IMF’s Lagarde speaking in Beijing
- IMF cuts global growth forecast for 2017 by 0.1% to 3.4% while UK growth cut by 0.9% to 1.7%. If not for Brexit, global forecast would have been slightly higher.
- After closing at record levels yesterday, the S&P 500 softened today on the back of disappointing earnings releases. Netflix, down 13%, led the losses amid disappointing subscriber growth. But the Dow Jones Industrial Average edged higher on the back of healthy earnings report from Johnson & Johnson.
- The dollar index rallied to its highest level since March 2016 closing at 97.06 while 10 year US Treasuries gained for the first time in four days pushing their yield down by three basis points to 1.56%.
- WTI and Brent crude oil both fell to their lowest levels since early May, and showed no signs of perking up despite weekly API crude stocks posting a draw in inventories after the market close.
The AUDUSD traded lower as the Reserve Bank of Australia minutes provided a more dovish outlook than the market was expecting. AUD should trade in sync with risk appetite over the next few days but volatility is expected to pick up in the run up to CPI next week.
Foreign exchange volatilities
US Treasuries edged higher, nudging yields marginally lower, after a relatively upbeat US housing market report and weak data out of Germany.
Analysts from UBS Group and SEB are estimating that the European Central Bank may run out of German bonds for QE purchase within six months.
Based on a $1.13 trillion Bloomberg German bond index, the securities that yield less than the ECB’s eligibility limit of minus 0.4 deposit rate, have grown to more than 60%.
The Dow Jones Industrial Average inched 25.96 points to 18,559.01, up 0.14%. The S&P 500 shed 3.11 points to 2,163.78 and the Nasdaq eased 19.41 points, or 0.4%, to 5,036.38.
Goldman Sachs reported earnings of $3.72 per share, well above the market's expectations of $3.00, and dramatically better than the $1.98 per share earned during the second quarter of last year. However Goldman Sachs closed at $161.41 and was down 1.18%.
After the bell, Microsoft also reported an EPS of $0.69, beating its market estimate of $0.58. The stock is rallying 3.5% after market closes. Meanwhile, Netflix closed 13.13% lower to $85.84 but higher on the gap down after its earnings release yesterday which missed analysts’ consensus.
Ericsson tanked 5.6% to 60.80 SEK after the mobile telecoms gear maker forecast a third consecutive year of comparable sales declines.
- L’Occitane International (973 HK) cut to ’underperform’ at Credit Suisse
- Baiyunshan (874 HK): Confirms injection use halted in S. China province
- China Everbright (165 HK): To issue up to 12.8b Yuan corporate bonds
- China Overseas Property (2669 HK): Issues positive profit alert
- L’Occitane (973 HK): 3-Mo. net sales drop 2.2% Y/y at reported rates
- Qinhuangdao Port (3369 HK): Jingtang Railway, China Railway enter contracting agreement
- Rusal (586 HK): Sells Alpart Alumina refinery in Jamaica to Chinese co.
- Sinoma (1893 HK) signs $370M cement production deals with Nigerian cos
- Tianjin Tianhai (900938 CH): Misses date to reply bourse’s query on Ingram
- Tsui Wah (1314 HK): Investors approached about possible majority stake sale
- Vanke (2202 HK): Asks CSRC, Shenzhen Exchange to investigate Baoneng funds
- Baoneng said to add funding deposit amid Vanke (2202 HK) shr slump: Caixin
- Vinda Intl (3331 HK) 1H net income HK$321.4m vs HK$330.8m yr earlier
- Yunnan Baiyao (000538 CH): Halts trading as controller plans ownership reform
- Disco (6146 JP): Cut to neutral at Goldman
- J-COM Holdings (2462 JP): Raised to buy at Iwai Cosmo
- Shinsei Bank (8303 JP): Raised to Baa2 from Baa3 at Moody’s - outlook stable
- Tokyo Electron (8035 JP): Cut to neutral at Goldman
- Beauty Garage (3180 JP): To move listing to TSE1 from Mothers on July 26
- GMO Click (7177 JP): 1Q oper. profit +9.3% to 3.37b yen
- Lixil (5938 JP): To make Grohe, affiliates wholly-owned subsidiaries
- Ricoh (7752 JP): Planning to inject 17.1b yen into India unit
- Riso Kyoiku (4714 JP): Lifts planned 1H dividend to 12 yen/share from 8 yen
- Santen Pharma (4536 JP): To acquire InnFocus for $225m
- Pokemon Go Available in Japan Wednesday: TechCrunch
- AP Eagers (APE AU) raised to outperform at Credit Suisse
- Xero (XRO NZ) shareholder meeting
- BHP Billiton (BHP AU) June quarter production
- Northern Star (NST AU) June quarter production
- Sydney Airport (SYD AU) June traffic stats
- CIMIC Group (CIM AU) 1H NPAT up 3% y/y to A$265.2m; reaffirms FY16 outlook
- St Barbara (SBM AU) FY16 gold output rises to record 386,564
Company news source: Bloomberg
– Edited by Adam Courtenay
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