Most of the markets treaded water although Hong Kong was the standout playing catch up following yesterday’s holiday. Investors there focused more upon the Pres. Trump and Pres Xi meeting as opposed to yesterday storming of the local parliament by protesters.
Most sectors advanced. Telcos, consumer discretionary and healthcare were better close to 1%. Financials gave way small while IT and energy lagged.
Down Under, the RBA reduced its benchmark rate 25 bps to 1%, as expected. The follow up statements were less dovish than expected and the “Aussie” climbed.
Other Important Headlines
- Chinese Premier Li announced ownership limits on brokers will be ended “by 2020.” The previous indication had been 2021.
- Byd +3.3% and peers rose following Pres. Xi’s pledge to support the EV vehicle sector.
- The Hong Kong listing of Ab Inbev’s +1.3% Asian ops ( as well as hops) has a price range of HK$40 to HK$47 per share. That values Budweiser Brewing APAC at $54b to $64b. The shares are expected to commence trading on the 19th.
- JP Morgan sees Japanese equities as the only asset class with the chance to have better performance during H2 vs. H1.
- After the close, Hong Kong retail sales fell during May but are well ahead of projected declines.
The region has spent most of the session up small. It has bounced off the flat line twice. The second dip was caused by comments the ECB was patient regarding any rate cut this month. This caused the € to catch some bids. Conversely, the £ is lower following dreadful construction PMI results which are a decade low.
Sectors are split. Utilities and food/bevies have spent the session up about 1% for most of the session. Construction, media and chemicals are lower by less than 0.5% and off lows. While still lower, basic resources and autos have also improved from lower levels.
The debt markets are seeing some interesting action. In a bid to appease the EU, the Italian government has lowered its FY’19 budget deficit to 2.04% from 2.4%. Italian yields are falling with the 10 yr. lower by c. 7 bps. The 2 yr. Italian yield fell below 0% for the first time since May of 2018 before paring the decline.
In the commodity markets, crude is giving ground following yesterday’s gains The Saudi oil minister says the OPEC+ deal will be finalized today for an extension of the cuts for 9 months. The Iranian minister has already left prompting some concerns regarding a deal. On a related note, reports allege Saudi Aramco is preparing for its IPO again.
- The U.S. is proposing additional tariffs on $4b of European goods in the continued Airbus -1.0%/ Boeing spat.
- Deutsche Bank -0.5% is seeking lower capital buffers from regulators as it attempts to reorganize the bank.
- WPP -2.3% confirms the company is conducting exclusive talks to sell a majority stake in its Kantar unit to Bain Capital.
On Our Side of the Pond
- Fairly quiet with the 4th approaching.
- Keep in mind, the Canadian markets will need to play catch up today.
- No U.S. macro but the Markit Canadian Manuf. PMI will be released north of the border.
Markets & Macro
|SK||CPI Core YoY||Jun||0.90%||0.90%||0.80%||—|
|AU||ANZ Roy Morgan Weekly Consumer Confidence Index||30-Jun||—||118.9||114.3||—|
|JN||Monetary Base YoY||Jun||—||4.00%||3.60%||—|
|JN||Monetary Base End of period||Jun||—||¥523.2t||¥511.8t||—|
|AU||RBA Cash Rate Target||2-Jul||1.00%||1.00%||1.25%||—|
|GE||Retail Sales MoM||May||0.50%||-0.60%||-2.00%||-1.00%|
|GE||Retail Sales NSA YoY||May||2.70%||4.00%||4.00%||4.60%|
|UK||Nationwide House PX MoM||Jun||0.20%||0.10%||-0.20%||—|
|UK||Nationwide House Px NSA YoY||Jun||0.50%||0.50%||0.60%||—|
|FR||Budget Balance YTD||May||—||-83.9b||-67.2b||—|
|UK||Markit/CIPS UK Construction PMI||Jun||49.2||43.1||48.6||—|
|HK||Retail Sales Value YoY||May||-4.30%||-1.30%||-4.50%||—|
|HK||Retail Sales Volume YoY||May||-5.40%||-1.70%||-5.00%||—|
|CA||MLI Leading Indicator MoM||May||—||—||0.40%||—|
|CA||Markit Canada Manufacturing PMI||Jun||—||—||49.1||—|
|CA||Bloomberg Nanos Confidence||28-Jun||—||—||57.8||—|