Article / 01 August 2017 at 1:42 GMT

Morning Report APAC: Commodities keep shares buoyant

APAC Sales Trading Desk / Saxo Capital Markets
Singapore

 

  • Continued advance in commodities heralds strong markets today
  • US oil trading at $50/barrel for the first time since May
  • AUD still holding above 80 US cents ahead of RBA decision today
  • JPY slightly lower - about 0.1% down to 110.34 to the USD

By Saxo APAC Sales Trading


Economic data of the day (Singapore Time)
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Speeches

0500 – NZ – RBNZ’s Spencer to speak on banking regulation


Overnight news

US:  President Donald Trump has removed Anthony Scaramucci as communications director, a little more than a week after the former financier was named to the post, the White House said on Monday.

The change came at the request of new chief of staff John Kelly, who started Monday, two White House officials said.

The Treasury Department announced on Monday that it was targeting Venezuelan President Nicolás Maduro with sanctions, accusing him of widespread human rights abuses.

Treasury said in a release that all of Maduro's assets subject to US jurisdiction were frozen and that US persons were prohibited from dealing with him.


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  • The USD selloff continued thanks to Trump and his chief of staff turning the Washington institution into The Apprentice TV show “you are fired !”. DXY is on track to drop below the 2016 lows at 91.919. There is no major support below the current level.
  • EURUSD has now broken the 200 Week Moving Average  at 1.1789. A confirmed break at the end of this week will be significant. 
  • EURCHF continued its crazy move higher on the back of EUR strength but also from a possible M&A flow. 
  • Emerging Markets: The USD against emerging markets followed the G10 market again. USDKRW trading close the year lows once again but this move is not related to foreign inflows into the equity market.  Overall it has been mixed flows in Asians with Hedge funds selling and a mixed model funds activities at these levels.
 
 
Foreign Exchange Movements

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  • Funds are still buying topside for the RBA meeting today.
  • The market is getting shorter and shorter vega (six month and above) with USDJPY below 110.50 in spot.
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US Treasury yields barely moved after early gains faded as oil failed to hold gains and dollar weakened. 10-year yield traded within 2 basis points range, while 2s30s and 5s30s erase steepening throughout US trading to end little changed.

European government bonds also ended flat despite supportive month-end duration extensions.

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The Dow Jones continued to break new high ahead of some of the key earnings later as Apple release their earnings after market close later today while another Dow component – Pfizer will be releasing its result later today before market opens.

Charter Communication is up more than 5.8% as Softbank is planning to make an offer to buy Charter his week.

Masayoshi Son, the chairman of Softbank, whom already a shareholder/chairman of the wireless company Sprint want to bundle deals for customers with cellular phone services, cable TV, telephone and broadband internet service. Charter Communications closed at $391.91.

Tesla retreated 3.5% ahead of its earnings release which will be due for release after market on the August 2. The key focus will be on the Model 3 production which will likely dictate the stock’s direction.

Discovery Communications has bought Scripps Network, a largely female lifestyle channel for $14.6 billion in cash and stock, or $90 per share.

The deal saw Scripps Network traded 0.58% at session close while Discovery Communications closed 8.2% lower.


Asia Pacific Stocks
 
Hong Kong

 
Analyst ratings:
-          Anton Oilfield (3337 HK): Raised to Buy at Haitong Intl, PT HK$1
-          China High Speed (658 HK): New Sell at Haitong Intl, PT HK$6.70
-          CRRC Times (3898 HK): H Shares New Accumulate at Guangfa Securities
-          Fortune REIT (778 HK): Cut to Outperform at Daiwa, PT HK$10.90
-          Galaxy Entertainment (27 HK): Raised to Buy at Maybank, PT HK$54
-          Hengli Petrochem (600346 CH): New Add at SWS, PT 11 Yuan
-          Hutchtel (215 HK): Cut to Neutral at New Street Research, PT HK$3.20
-          Hutchtel (215 HK): Raised to Buy at HSBC, PT HK$3.64
-          Joy City Property (207 HK): New Buy at DBS Vickers, PT HK$1.40
-          Lee & Man Paper (2314 HK): Cut to Hold at CICC, PT HK$7.41
-          MGM China (2282 HK): Raised to Buy at Morningstar
-          MMG (1208 HK): Cut to Neutral at Macquarie, PT HK$3.40
-          Pacific Basin (2343 HK): Cut to Neutral at Drewry Financial Services
-          PetroChina (857 HK): H Shares Raised to Overweight at Morgan Stanley
-          Sun Art Retail (6808 HK): Raised to Overweight at Morgan Stanley
 
Preview:
-          AgBank (601288 CH): AgBank Plans 60b Yuan Tentative Credit Line to CNPC Capital
-          Bank of China (3988 HK): Chen Siqing Is Said to Be Named Bank of China’s Party Secretary
-          Beijing Capital Dev. (600376 CH) Gets 6b Yuan Financing From Brokerage
-          Chalco’s (2600 HK) 500kt/Yr Aluminum Project Is Found to Violate Rules
-          China Railway Const. (1186 HK): China Railway Construction Units Set Up Private Equity Fund
-          China Construction Bank(939 HK) Is Said to Name Tian as Chairman
-          Fosun Int’l (656 HK): India Is Said To Block Fosun’s $1.3b Gland Pharma Takeover
-          GCL-Poly Energy (3800 HK): GCL-Poly Unit, Zhongjian Zhonghuan Sell Assets for 150M Yuan
-          HSBC (5 HK) Is First Big Bank to Spell Out Brexit Bill: $300 Million
-          Standard Chartered (2888 HK): StanChart Ghana 1H Profit 158.7m Cedis vs 149.6m Cedis Y/y
-          Telecom sector: Premier Says China To Expand Opening up of Telecom Sector: Radio
-          Wanhua Chem Group (600309 CH): Wanhua Chemical 1H Net 4.86b Yuan vs 1.37b Yuan Year Ago
-          Xinyi Glass (868 HK): Xinyi Glass 1H Net Rises 19.5% Y/y to HK$1.64b


Japan
 
Analyst ratings:
-          Dexerials (4980): Raised to outperform from neutral plus at Iwai Cosmo
-          Fanuc (6954): Downgraded to neutral from outperform at Daiwa; cut to neutral from outperform at Macquarie
-          Nomura Real Estate (3231): Cut to neutral from buy at Ichiyoshi Research
-          NSSMC (5401): Raised to outperform from neutral plus at Iwai Cosmo
-          NS Solutions (2327): Raised to buy from neutral at Citi
-          Sumitomo Mitsui Trust (8309): Raised to outperform from neutral at Tokai Tokyo
-          Tokyo Gas (9531): Downgraded to neutral from outperform at Daiwa
Preview:
-          Aozora Bank (8304): 1Q net income +5% y/y, beating analyst estimate
-          Comture (3844): To conduct 3-for-1 stock split on Oct. 1
-          Daikyo (8840): 1Q operating profit sinks 82% y/y to 480m yen
-          Electric Power Development (9513): 1Q operating profit -22% to 27.6b yen
-          Fuji TV (4676): 1Q operating profit slips 52% y/y to 3.3b yen
-          Fuso Chem (4368): 1Q operating profit +18% y/y to 2.9b yen
-          GMO Internet (9449): Half-year operating profit slips 14% y/y to 7.5b yen
-          GMO Payment Gateway (3769): 9-month operating profit +33% y/y to 3.9b yen, while net income falls 16% y/y to 1.5b yen
-          Gurunavi (2440): 1Q operating profit falls 27% y/y to 1.4b yen
-          JAL (9201): Raises full-year operating profit outlook by 7.7% to 153b yen
-          JSR (4185): 1Q operating profit +85% to 12.7b yen
-          JVC Kenwood (6632): 1Q operating loss narrows to 261m yen from 1.3b yen loss a year earlier
-          Kawasaki Heavy (7012): 1Q operating profit -69% to 4.9b yen
-          Kose (4922): 1Q operating profit +26% y/y to 12.8b yen
-          KYB (7242): 1Q operating profit +62% to 6.4b yen, lifts FY target 28% to 20b yen
-          Kyushu Electric (9508): 1Q operating profit slips 26% y/y to 33.1b yen
-          Makino Milling Machine (6135): 1Q operating profit -81% to 197m yen, lifts full-year target 8.2% to 10.5b yen
-          Makita (6586): 1Q operating profit at 18.2b yen, in line with analyst estimates
-          Meidensha (6508): 1Q operating loss narrows to 2.96b yen from 3.6b yen loss a year earlier
-          Mitsubishi Heavy (7011): To spin off shipbuilding business into 100%-owned subsidiaries
-          Mitsubishi Tanabe (4508): 1Q operating profit sinks 28% y/y to 21.05b yen
-          Mitsui Engineering (7003): 1Q operating loss widens to 9.9b yen vs. 128m yen loss a year earlier
-          Mizuho Financial (8411): 1Q net income slides 11% y/y to 118.3b yen
-          Murata (6981): 1Q operating profit 40.9b yen vs analyst est. 46b yen
-          Nabtesco (6268): Lifts full-year operating profit forecast by 9.2% to 28.4b yen
-          NEC (6701): Posts surprise 1Q net profit, operating loss smaller than expected
-          NGK Spark Plug (5334): 1Q operating profit +3% y/y to 16.1b yen
-          NH Foods (2282): Lifts full-year operating profit forecast by 3.6% to 58b yen, as 1Q OP profit +44% y/y to 13.9b yen
-          Nippon Electric Glass (5214): Raises full-year operating profit forecast 25% to 30b yen as half-year OP +87% y/y to 16.3b yen
-          Nissan Shatai (7222): To buy back as much as 8.43% of shares from Ontario Teachers’ Pension
-          Nitto Denko (6988): 1Q operating profit more than doubles y/y to 30.3b yen
-          Nitto Kogyo (6651): 1Q operating profit slips 13% y/y to 506m yen
-          Okuma (6103): 1Q operating profit +23% to 3.3b yen
-          Orix (8591): 1Q net income +17% y/y to 89.7b yen
-          PanaHome (1924): 1Q operating loss widens to 4.1b yen vs. 2.5b yen loss a year earlier
-          Panasonic (6752): 1Q operating profit +17% to 83.9b yen vs analyst est. 84.6b yen
-          Pola Orbis (4927): Half-year operating profit +72% y/y to 20.9b yen
-          Renaissance (2378): 1Q operating profit falls 19% y/y to 547m yen
-          Resona (8308): 1Q net income falls 22% y/y, keeps outlook unchanged
-          Seria (2782): 1Q parent operating profit +19% y/y to 4.2b yen
-          Sony (6758): Sony Pictures TV Networks buys 95% stake in Funimation for $143m
-          Sparx Group (8739): 1Q operating profit +56% y/y to 803m yen
-          Stanley Electric (6923): Lifts full-year operating profit forecast 3.2% to 48.3b yen as 1Q OP +23% y/y to 10.2b yen
-          Start Today (3092): 1Q operating profit +59% y/y to 7.98b yen
-          Sumitomo Heavy (6302): 1Q operating profit +52% y/y to 11.85b yen
-          Sumitomo Mitsui Financial (8316): 1Q net income +31% to 241.5b yen
-          Tadano (6395): 1Q operating profit falls 52% y/y to 2.8b yen
-          Tokai Carbon (5301): Preliminary half-year operating profit at 4.2b yen, beating company forecast by 36%
-          Toto (5332): 1Q operating profit slips 5.5% y/y to 6.99b yen
-          Toyo Seikan (5901): 1Q net income +59% y/y to 9.2b yen
-          TV Asahi (9409): Lowers full-year revenue forecast by 2.3% to 297b yen as 1Q operating profit slides 29% y/y to 5.8b yen
-          United (2497): Swings to 1Q operating profit of 321m yen from loss of 65m yen a year earlier
-          Yamato Holdings (9064): Swings to 1Q operating loss of 10b yen from 7.4b yen profit a year earlier; lowers full-year operating profit forecast 17% to 25b yen; books 5.2b yen one-time charge on labor hours in 1Q

Australia
 
Analyst ratings:
-          BOQ AU: Bank of Queensland Raised to Buy at Bell Potter, PT A$12.85
-          FMG AU: Fortescue Cut to Sell at Morningstar
Preview:
-          AGL AU: AGL Energy Is Said to Seek Smart Meter Unit Sale: AFR
-          BHP AU: Iron Ore Soars as Bulls’ Case Gets Strong Lift From Industry PMI
-          CCP AU: Credit Corp Group to release full-year earnings
-          FBU NZ: Silicon Valley Whiz Kids Pitch New Zealand Amid Immigration Row
-          NAB AU: NAB Dumps Its Sales Incentives: AFR
-          NVT AU: Navitas full-year earnings
-          SPO AU: Downer’s Offer for Spotless Extended to Aug. 7


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 The AUD is maintaining strength, even if rates do not change today. Photo: Shutterstock



– Edited by Adam Courtenay


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