June 26 Asian Macro Initial Views


June 26 Asian Macro Initial Views
Covid-19 Globally over 9.5m cases, 483k deaths.
US reports a record jump in new cases -VE for sentiment
US Futures -70pts after Fed leases Stress Test results

DOW +1.2%, NDX +1.1%, S&P +1.1%, Russel 2K +1.7% markets opens lower and saw initial selling before reversing then spend most of the day around flat before rallying into the close as the Fed announced regulatory roll backs for the banks to allow them to make large investments into funds such as venture capital funds. Also, banks will not have to set aside cash for derivatives traders between different affiliates of the same firm, potentially freeing up more capital. This was ahead of the bank stress test results which came after market. Bank of America +3.8%, JPMorgan Chase +3.5%, Citigroup +3.7% and Wells Fargo +4.8% Goldman Sachs +4.6%, Morgan Stanley +3.9%. BUT falling in after hours market on stress test results
Initial concerns over the increase in covid-19 cases seemed to dissipate through the session. Overall macro data was seen as positive although unemployment remains high.
KB Home led US housebuilders lower after warning of slowing new orders and cancellations, which the company blamed on rising unemployment -VE
AFTER MARKET FT reports that the FED has capped dividends and banned share buybacks by big US banks as it released an analysis showing Covid-19 could trigger $700bn of loan losses and push some lenders close to their capital minimums. -VE with bank shares falling between -1.3 to 3.5% in after hours trading
NIKE -3.8% after market (+1.3% during normal hours) released disappointing numbers after market -VE for Asian show makers
DATA
GDP Growth Rate Final Q1 -5% QoQ vs +2.1% prior (F/cast was -5%)
GDP Price Index Final Q1 +1.6% QoQ vs +1.4% prior (F/cast was +1.6%)
Durable Goods Orders May +15.8% MoM vs -18.1% Apr (F/cast was +8.5%)
Durable Goods Orders (Ex Trans) May +4% MoM vs -8.2% Apr (F/cast was +1.5%)
Durable Goods Orders (Ex Defence) May +15.5% MoM vs -17.1% Apr (F/cast was +5.9%)
Corporate Profits Final Q1 -12.4% QoQ VS +2.1% prior (F/cast was -14.2%)
Goods Trade Balance Adv May $-74.34b vs -70.73b Apr (F/cast was -63b)
Wholesale Inventories Adv May -1.2% vs +0.2% Apr (F/cast was -0.6%)
Initial Claims 1.48m vs 1.54m prior (F/cast was 1.38m)
Initial Claims 4 week ave 1.62075m vs 1.7815m prior
Continuing Claims 19.522m vs 20.289m prior (F/cast was 2.01m)
PCE Prices Final Q1 +1.3% QoQ vs +1.3% prior (Revised) (F/cast was +1.3%)
Core PCE Prices Final Q1 +1.7% QoQ vs +1.3% prior (F/cast was 1.6%)
EIA Natural Gas Stocks Change 120 Bcf vs 85 Bcf prior (Concensus was 106 Bcf)
Kansas Fed Manufacturing Index Jun +2 vs -25 May (F/cast was -8)
Fed Stress Test Results for Banks out after market
USD stronger was vs Yen & Euro. Bitcoin -0.8% @ 9,226.71, VIX -4.8% @ 32.22, US T10 0.682%
OIL Brent +1.8%, WTI +1.9% on signs of improvement in US economy and tepid signs of increased fuel demand
Gold +0.3%, Silver +1.2%, Copper +0.15%
AHEAD Personal Income and Spending, PCE Price Index, Core PCE Price Index, University of Michigan Final Data (Consumer Expectations, 5 yr Inflation Expectations, Current Conditions, Inflation Expectations & Sentiment), Baker Hughes oil rig count.

DAX +0.7%, CAC +1%, FTSE +0.4% Markets opened lower in reaction to the latest IMF report which further downgraded its growth forecasts and increased US covid-19 cases. After initially selling down the indexes rebounded on good US data with Durable Goods orders better then expected and continuing jobless claims dropping below 20m although initial claims rose more than expected. Markets saw a small rally into the close
Wirecard -71.3% filed for bankruptcy
Lufthansa +7% on news the major shareholder has decided to back to bailout plan, he had previously opposed.
DATA
EUROZONE ECB Monetary Policy Meeting and General Council Meeting
GERMANY Consumer Confidence Jul -9.6 vs -18.6 Jun (F/cast was -13)
FRANCE Unemployment Benefit Claims May 148.3k vs 827.1k Apr (F/cast was 470k)
Jobseekers Total May 4.1674m vs 4.3157m Apr (F/cast was 4.7855m)
UK CBI Distributive Trades Jun -37 vs -50 May (F/cast was -36)
AHEAD
EUROZONE Loans to Households and to Companies, M3 Money Supply
GERMANY No data due
FRANCE No data due
UK Car Production

JAPAN Expect Nikkei to open flat as US banks sell off in after market. Yen currently 107.16 Pre market data may limit the upside.
Data due Tokyo Core CPI Jun +0.2% YoY vs +0.2% May YoY (F/cast was +0.2%)
Tokyo CPI Jun +0.3% YoY +0.4% May (F/cast was +0.5%)
Japan is to disband a panel of medical experts advising Prime Minister Shinzo Abe’s cabinet on the response to the novel coronavirus after criticism of its transparency and lack of independence.
Government will create guidelines by March 2021 to strengthen legal protection and improve accident insurance coverage for freelance workers as part of its efforts to promote flexible working styles, according to a review panel's interim report compiled Thursday. The
Japan is to consider the acquisition of weapons able to strike enemy missile launchers to bolster defence against North Korea after a decision to cancel the Aegis Ashore missile defence system, the defence minister said on Thursday.
SoftBank Group Corp Chief Executive Masayoshi Son mounted a defence of his investing decisions on Thursday, saying the value of the Japanese conglomerate's holdings has recovered to pre-coronavirus outbreak levels
Nissan will lay off about 200 workers at a plant in Mexico amid local and global challenges facing the automotive industry, the carmaker said on Thursday.
Sosei Group Corp rallied Thursday on news it will collaborate with AbbVie Inc on a drug discovery partnership that could be worth up to $1 billion.
Tokyo Game Show, one of the world's largest gaming industry events, said Thursday it will hold this year's event online from Sept. 24 to 27

SOUTH KOREA Expect markets to open higher helped by improving consumer confidence
Data out Consumer Confidence Jun 81.8 vs 77.6 May (F/cast was 80)

Prosecutors on Thursday sought an arrest warrant for former Kolon Group chief Lee Woong-yeol as part of their investigation into a controversial gene therapy drug developed by a group company. -VE
Korea Aerospace Industries is set to sell 20 TA-50 fighters to the South Korean Air Force, according to industry sources Thursday. +VE
WeMade said Thursday that it has won a lawsuit against Chinese rivals in a Singapore-based arbitration court for breaching a software license agreement (SLA) for its game The Legend of Mir 2. +VE
GS Engineering and Construction said Thursday it is officially entering the precast concrete business by building a precast concrete factory in North Chungcheong Province. +VE

TAIWAN Market closed fro Dragon Boat holiday to reopen Monday
No data due
Evergreen Marine Corp 
said it expects a rebound in its cargo volume in the third quarter after facing an up to 20 percent plunge in the first half of the year due to the COVID-19 pandemic. +VE
Insurers First-year premiums (FYPs) of foreign-currency insurance policies in April were NT$27.1 billion (US$914.3 million), the lowest in the past six months, as the COVID-19 pandemic affected insurers’ sales activities, data released on Tuesday by the Financial Supervisory Commission showed. -VE

CHINA Market closed to reopen on Monday
No data due

US Senate passed legislation on Thursday that would impose mandatory sanctions on people or companies that back efforts by China to restrict Hong Kong's autonomy, pushing back against Beijing's new security law for the city.
Three engineers in China secrets case put on US wanted list; Ex-president of Chinese chip maker Fujian Jinhua and two other engineers are accused of stealing technology from Micron Technology. US Issuing of arrest warrants marks acceleration of first case filed under Trump administration’s ‘China Initiative’
United States called on Russia and China on Thursday to provide more humanitarian aid to their ally Venezuela in its fight against the growing COVID-19 epidemic.
United States and European Union need a shared understanding of China to resist it, U.S. Secretary of State Mike Pompeo said on Thursday, calling Beijing a threat and accusing it of stealing European know-how to develop its economy.
China has deployed large numbers of troops and weapons along a disputed Himalayan border in violation of bilateral agreements, India's foreign ministry said on Thursday, accusing Beijing of escalating tensions and triggering a deadly clash last week.
Trudeau says no to trading Huawei’s Meng Wanzhou for two Canadians held by China. The PM says halting extradition trial of Chinese telecoms executive would expose more overseas Canadians to arrest for political purposes. Trudeau was responding to letter from 19 ex-lawmakers and diplomats urging Ottawa to free Meng

HONG KONG ADR’s -159pts to open at 24,622 as the market plays catch-up. Sentiment weak on news that Beijing has decided against releasing the full text of the national security law for Hong Kong in order to prevent social unrest and delays to legislation -VE for sentiment. Macau names weak on a new case of covid-19.
No data due
Short Selling HSI
Wedneday 17.5% vs 21% Tuesday
Top Shorts Wharf REIC (1997) 42%, MTR (66 HK) 38%, Hang Lung PPT (101) 38%, Hang Seng Bank (11) 38%, PetroChina (857) 36%, Bank of China (3988) 33%, AIA (1299) 33%, Mengniu Dairy (2319) 31%, Ping An (2318) 30%, CCB (939) 28%, Country Garden (2007) 28%, CLP (2) 26%, China Unicom (762) 26%,
BUYBACKS/INSIDER DEALING
Li Ka-shing and Victor T K Li acquired shares of CK ASSET (1113.HK) further by a wholly-owned subsidiary of Li Ka Shing (Global) Foundation. They acquired a total of 1.3295 million shares in CK Asset at the average price of HK$47.25, HK$47.1437, HK$47.2822 and HK$46.9328 per share on 18 June, 19 June, 22 June and 23 June 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.17% to 35.2%, and from 35.23% to 35.27%.
WATCH
Sea to Sky saw more than 11,700 cheques submitted for the first batch of flats 25.3X over subscribed. CK Asset to release another batch of 462 unit tomorrow +VE
HSBC raised its Hibor based mortgage rate and lowered the cash rebate due to its pessimistic outlook for property -VE for sentimentVictoria Secrets closed its flagship site in HK -VE
SUCCESS DRAGON (1182.HK) expected to record the loss in the range of HK$11mn to HK$14mn for the year ended 31 March 2020 as compared with the loss of HK$38.898mn for the year ended 31 March 2019.
As USD/ HKD re-hit the Strong-side Convertibility Undertaking, the HKMA undertook US$510 million of selling orders during Hong Kong trading hours to inject HK$3.953 billion. The balance of the banking system of Hong Kong is expected to increase to HK$131.609 billion next Monday (29 June).
YTO EXP INTL (6123.HK) POSITIVE PROFIT alert The Group was expected to record an increase in the revenue and a substantial increase in the net profit for the six months ending 30 June 2020 as compared with the corresponding period in 2019, based on the preliminary review by the Company’s management on the unaudited consolidated management accounts of the Group for the five months ended 31 May 2020 and other information currently available to the Board.
COWELL (1415.HK) POSITIVE PROFIT alert The Company expected to record a significant improvement in the Group’s profit for the six months ending June 30, 2020 as compared with the same period in 2019. The significant improvement in profit was primarily attributable to the increase in camera module sales; improved production yield; and efficient cost management.
TAI CHEUNG HOLD (88.HK) announced annual results ended March 2020. Net profit amounted to HK$125 million, down 46.2% yearly. EPS equaled HK$0.2. Final DPS was HK$0.12, as compared with HK$0.23 in the year-ago period.
Google stated that it is considering alternative destination to Hong Kong after the US Department of Justice has suggested Federal Communications Commission ban its application to link Pacific Light Cable Network with Hong Kong out of national security concerns
CATHAY PAC AIR (293.HK) said around 80% of its employees have so far expressed willingness to partake in the new round of voluntary furlough arrangement. The second round of furlough application will expire on 28 June.
Centa-Salesman Index (CSI) last printed at 60.48, +1.35 pts WoW. For almost five weeks, CSI lingered within a narrow range around 60 with the peak and trough at 60.48 and 57.9. The index has been maintaining at the upper end of the critical point of 55. In near term, they forecast the CSI to hover around 60 continuously and amass upswing momentum, which foretold an ongoing uptrend of housing prices.