Morning Report APAC: Asian stocks rise on US jobs data
- Shares rose in Australia, Japan and South Korea in early trade
- Bond yields are rising worldwide as central banks stoke expectations
- China CPI expected to rise 1.6% in June year-on-year
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time)
Speeches
08:30: Japan – BOJ Kuroda speaks at Branch Manager’s meeting
Overnight news
US: Nonfarm payrolls data was much higher that the market expected, especially after the ADP number. NFP printed 222,000 from an upward revision of 152,000 (expected: 178,000, previous: 138,000).
The unemployment rate inched up to 4.4% from 4.3% and the labor-force participation rate inched up to 62.8% in June from 62.7% the prior month.
There are different explanations on why the earnings growth is still mild but this is definitely something to watch in the future because it will have an impact of future rate decisions from the Federal Reserve.
Canada: The employment number was much higher than expected at 45,300 (expected: 10,000) with lower than expected unemployment rate at 6.5% (Exp. 6.6%).
G20: G20 nations on Saturday reached a compromise on climate change, the last remaining issue of contention at the summit.
Every country except the United States declared that the Paris climate change agreement is “irreversible” and must be implemented “swiftly”.
The US on the other hand, declared its intention to pull out of the 2015 deal, which has won the backing of nearly 200 nations.
Foreign exchange
USD was just slightly bid despite the strong NFP number. The main beneficiary was USDJPY up 0.6% following US rates higher.
The main resistance to watch is still 115.00 in USDJPY with few sellers to be expected ahead of that level.
USDCAD had a strong move lower following the employment numbers on Friday. This move lower has been the pain trade for many funds and looks like the move lower is set to continue.
Emerging markets: The USD against emerging markets was well offered following the rally in equities.
This move took some fear out from investors regarding outflows. We will see some profit taking this morning in Asia and the move lower will resume when London comes in, in our view.
Foreign exchange movements
We still see corporate supply of EURUSD Vega (6 Months and more) pushing the volatility curve lower.
It looks like the market is caught short vol in USDJPY at 114 and above. We are seeing banks buying short dated topside strikes until the end of the week.
Rates
UK gilts yield were lower due to weak UK industrial production figure, suggesting low possibility of Bank of England rate hike soon.
Commodities
Equities
US stocks closed higher due to solid nonfarm payroll data, The S&P 500 rallied 15.43 points to 2,425.18. led by a tech sector rebound by 1.25%.
Tesla’s car registrations in California fell 24% in April from a year ago according to data from IHS Markit.
This is not a good news as California is the largest market for the electric car maker and the stock has already fallen nearly 15% this week. The stock price closed up 1.5% on Friday.
European stocks closed slightly lower on Friday, on oil price slump and concerns on tapering. The Stoxx Europe 600 fell 0.1% to 380.18, with The Stoxx Europe 600 Oil & Gas Index tumbled 1.2%.
Carrefour led the loss on Stoxx 600, dropped by 4.6%, amid worries about weakening profit margins.
Europe budget airline EasyJet climbed up 5.4% after Credit Suisse raised its rating to outperform from neutral.
Asia-Pacific stocks
Hong Kong
Analyst ratings
- NBTM New Materials Group (600114 CH): New Add at Wanlian Securities
- ENN Energy (2688 HK): Raised to Outperform at CCB Intl, PT HK$60
- Link REIT (823 HK): Raised to Buy at UBS, PT HK$70.08
- Ningbo Shanshan (600884 CH): New Buy at Wanlian Securities
- Nuode Investment (600110 CH): New Buy at GF Secs
- Uni-President China (220 HK): Cut to Sell at Haitong Intl, PT HK$4.90
- WH Group (288 HK): Outperform at CCB Intl, PT HK$10.10
Preview
- AAC Technologies (2018 HK): Capital Group Companies Bought 1.56m AAC Tech Shares July 4
- Cathay Pacific (293 HK): Cathay Pacific Signs MOU to Buy 40% of AHK Air From DHL Group
- Central China Securities (1375 HK): CC Securities Unaudited June Net Profit Totals 58.4m Yuan
- China Hongqiao (1378 HK): Hongqiao, CTICM Extend Due Diligence, Exclusivity to 6 Months
- Cosco Shipping Holdings (1919 HK): Cosco Shipping Offers to Acquire Orient Overseas for $6.3 Bln
- Country Garden (2007 HK) Says Total 1H Contract Sales Was 288.9B Yuan
- Great Wall Motor (2333 HK): Great Wall Motor June Vehicle Sales 64,471 Units, Down 1.7% Y/y
- HSBC (HSBA LN): HSBC Calls for Probe of Noble’s Palm Oil Unit, FT Says
- Kweichow Moutai (600519 CH): Group 1H Profit 15.5 B Yuan: 21Jingji.com
- Prudential (PRU LN): M&G’s Richards Says Government’s Post-Brexit Policy Is Unclear
- Shandong Chenming Paper (200488 CH): Chenming Paper Expects 1H Net Income to Rise up to 92% Y/y
- Sunny Optical (2382 HK): Sunny Optical June Handset Lens Sets Shipments Rise 61.5% Y/y
- Tencent (700 HK): Beijing Capital Intl Airport, Tencent in Strategic Pact: Xinhua
- Yonghui Superstores (601933 CH): Yonghui Superstores Raises Stake in Zhongbai Holdings to 25%
Japan
Analyst ratings
- Alps Logistics (9055): New outperform at Tokai Tokyo Securities
- Cosmos Pharma (3349): Raised to buy at Goldman
- KeePer Technical Laboratory (6036): Rated new outperform at Tokai Tokyo
- KLab (3656): New outperform at Tokai Tokyo Securities, PT 3,300 yen
- Mikuni (7247): New outperform at Tokai Tokyo Securities, PT 700 yen
- Mizuho Financial (8411): Cut to sell at Haitong Intl; PT cut to 171 yen
- MUFG (8306): Downgraded to sell at Haitong Intl; PT lowered to 640 yen
- Nichirei (2871): Initiated at Tokai Tokyo with outperform; PT 4,960 yen
- Nippon Hume (5262): Cut to outperform at Tachibana Securities
- Resona (8308): Downgraded to neutral at Haitong Intl; PT cut to 595 yen
- Roland DG (6789): Raised to buy at Ichiyoshi Research
- SMFG (8316): Downgraded to neutral at Haitong Intl; PT cut to 4,100 yen
Preview
- Chiyoda (8185): 1Q net income +28% y/y to 2.5b yen, maintains full-year projection at 4.9b yen
- Dentsu (4324): June non-consolidated sales fall 13.1% y/y
- Evolable Asia (6191): Seeks 10.1b yen from warrant sale to Credit Suisse
- Hisamitsu Pharmaceutical (4530): 1Q operating profit -11% y/y to 5.1b yen, maintains full-year forecast at 24.1b yen
- Maruzen Co/Taito ward (5982): 1Q operating profit +21% y/y to 1.5b yen, maintains full-year forecast at 4.1b yen
- Mazda Motor (7261): Faw Car to recall 680,642 vehicles on airbag defect
- Nippon Concept (9386): To move Tokyo listing to first section on July 31
- Nippon Hume (5262): Cut to outperform at Tachibana Securities
- Nippon Steel & Sumitomo Metal (5401): Outlook revised up to stable, with BBB rating affirmed
- Nippon Yusen (9101): To provide details on integrated holdings company with Mitsui OSK Lines and Kawasaki Kisen Kaisha on Jul. 10
- Nissan Motor (7201): Says annual synergies with Renault rise 16% to 5b euros
- Noda (7879): Preliminary first-half operating profit at 2.2b yen, beating company forecast by 28%
- Star Mica (3230): To move Tokyo listing to first section on July 14
- Tokio Marine Holdings (8766): To acquire 23% in IFFCO Tokio General Insurance, including 1.36% from Indian Potash
- Tokyo Steel Manufacturing (5423): Lifts parent full-year operating profit forecast by 30% to 13b yen
- Yamato Holdings (9064): To form capital tie up with Raksul for distribution services
Australia
Analyst ratings
- Flight Centre (FLT): Raised to buy at Ord Minnett
- Magellan Financial (MFG): Downgraded to neutral from overweight at JPMorgan
Preview
- BHP Billiton (BHP), Fortescue (FMG), Rio Tinto (RIO): Australia warns iron-ore price to go sub-$50 as supplies swell
- Bellamy’s (BAL): Unit had different procedures for China, agency says
– Edited by Adam Courtenay
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
All material contained herein is provided for your general information. The information and commentaries are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Saxo Capital Markets Pte. Ltd. (“SCM SG”). Any expression of opinion (which may be subject to change without notice) is personal to the presenter and/or author; they do not reflect the view or opinion of SCM SG or its affiliates, neither do they constitute an endorsement of SCM SG’s view or analysis of the same.
None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. SCM SG does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment based on any commentaries or information provided here.
For further information, please click here.
Saxo Capital Markets Pte Ltd ("Saxo Capital Markets") is a licensed subsidiary of Saxo Bank A/S, an online trading and investment specialist. Saxo Capital Markets serves as the APAC headquarters and holds a capital markets services licence under the Monetary Authority of Singapore; and a commodity broker licence issued by the International Enterprise Singapore. Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, the leading multi-asset online trading platforms.
Trading risks are magnified by leverage - losses can exceed your deposits. Trade only after you have acknowledged and accepted the risks. You should carefully consider whether trading in leveraged products is appropriate for you based on your financial circumstances. Please consider our Risk Warning and General Business Terms before trading with us. Please see full General Disclaimer.
Thousands of serious traders receive free news and analysis from Saxo Capital Markets each day. Saxo Capital Markets never sends these emails unsolicited; they are sent following acceptance of your membership and subscription request by Saxo Capital Markets at saxomarkets.com.sg. If you do not wish to receive any emails from Saxo Capital Markets in the future, please reply to this email with the word "UNSUBSCRIBE" in the subject header.
Copyright | Disclaimer | Risk Warning | Privacy Policy | Contact Us
Samsung Hub | 3 Church Street | # 30-01 | Singapore 049483
Company No. 200601141M