July 1 Asian Macro Initial Thoughts; Muted trading; China's Communist Party is 100 yrs old. HK closed

This and previous notes can be found at  Substack ( Asian Market Sense )
Check out ERI-C.com for  interesting research and trading analysis

Asia likely to see a muted open with a lot of pre market data and other data to be released during the morning. Also the overhang of rising covid cases in Asia and the US jobs report on Friday. Yesterday’s trading suggest mixed views on value or growth stocks for the 2H.

Australia Futures indciate market to open 3pts lower on the first day of the new financial year but good pre-market data makes it likely the market will open higher.  But could see caution ahead of the Trade Data due out later this morning.  Oil and Gold names +VE
Data out 
Manufacturing Index Jun 63.2 vs 61.8 May (F/cast was 62)
Manufacturing PMI Jun 58.6 vs 60.4 May (F/cast was 58.4)
Due Later Balance of Trade, Exports and Imports.
Japan Nikkei futures opened  +47pts (Chicago futures +60pts)  Pre market Tankan data key to market direction along with the PMI data later. Rising covid cases remain a concern.  Worth noting there were no ETF purchases Wednesday.
S Korea Expect markets to open flat ahead of Trade Data.  Watch for Auto makers to release sales data.
Taiwan Market to open higher with continued interest in Shipping and Steel.  Tech may see more interest as water restrictions are lifted. Pre market PMI will influence the market direction
China Expect market to open higher with Team China support but trading likely to be cautious ahead of PMI data.  President Xi to give a keynote speech likely to be nationalistic rather than economic. Default issues continue to worry the market after some Tus-holding bond holders have not received their coupon.
HK market closed re-opens Thursday ADR’s indicate +91pts at  28,919  Chinese Financials were weak. But other  sectors +VE
Europe Focus will be on the PMI data and covid cases
US Futures 
Opened Dow +50pts, S&P +0.15% and NDX slightly +VE, caution ahead of ISM and PMI data, also Friday’s jobs report.

DOW +0.6%, NDX -0.17%, S&P +0.13%, Russel 2K +0.07%
Markets opened flat Dow worked slowly higher (strength in Walmart, Boeing and GS) whilst the S&P and NDX traded sideways around flat all day. S&P touched another new high.   Data was mised but ADP payrolls beat.
Didi’s IPO was well received and they operated the greenshoe.
Overall signs of a positioning into recovery names for the  2H

Banks JPMorgan Chase +0.9%, Citigroup +1.6%,  Wells Fargo +1.2%, Amex +0.6%
Work from home names: Facebook -1.2%, Apple +0.5%, Amazon -0.2%, Netflix -1%,  Disney +1.1%, Zoom Video -2%, Alphabet -0.2% and Microsoft -0.2%,
Tech NXP Semi -1%, Nvidia -0.1%, Micron +2.5% on news Texas Inst to buy one of its factoreis, AMD +4.9% benefitting from Intel’s delays, Skyworks +0.4%
Re-opening stocks  Boeing +1.6%, Caterpillar +1.2%, Simon Property -0.4%, Kohl’s +1.5%, Nordstrom +0.3%, Gap +3.3%, United Airlines +0.3%, Carnival +2.3%, Wynn Resorts +0.5%, Chevron +1%, Exxon Mobil +0.8%.  
Lock down names Campbell Soup -0.1% General Mills +1.5%, JM Smucker -0.4%
MBA Mortgage Applications  -6.9% vs +2.1% prior
MBA 30 yr Mortgage Rate +3.2% vs +3.18% prior
ADP Employment Change Jun 692k vs 886k May revised (F/cast was 450k)
Chicago PMI Jun vs 75.2 May (F/cast was 72)
Pending Home Sales May +13.1% YoY vs +51.7% Apr (F/cast was +25%)
Pending Home Sales May +8% MoM vs -4.4% Apr (F/cast was +25%)
EIA Crude Oil Change -6.718m vs -7.614m prior (consensus was -4.686m)
EIA Gasoline Change Report +1.522m vs -2.93m prior (consesnsus was -0.886m)
USD was stronger vs Yen & Euro. Bitcoin -4.3% @ 34,776.00,  VIX -1.2% @ 15.83,  US T10 @ 1.468%
OIL Brent +0.49%, WTI +0.66% as US stockpiles fall and delays in OPEC+ meetings
Gold +0.4%, Silver +1.37%, Copper +0.63% Platinum +0.25%, Palladium +3.7%.
Challenger Job Cuts, Initial Claims, 4 week Average Claims, Continuing Claims, Manufacturing PMI, Construction Spending, ISM Manufacturing (PMI, Prices, New Orders,Employment), EIA Natural Gas Report,

DAX -1.02%, CAC -0.91%, FTSE -0.71%
Markets opened flat but sold down on covid concerns and mixed data raising inflation fears until around 11am when the started to bounceand workd better for most of the rest of the session but sold down into the close. Auto’s leading the laggards but all sectors in the red. IAG weak on news of a probe into its planned T/O of Air Europa
EssilorLuxottica flat is pushing ahead with its planned acquisition of Dutch eyewear chain Grandvision +14.2%.
Porsche -4.2% while Swedish cloud comms firm Sinch +2.2%.
MorphoSys -4.6% but WM Morrison +4.5% after a top shareholder said U.S. private equity firm Clayton, Dubilier & Rice should up its takeover offer for the British supermarket operator to around $9 billion.
Core Inflation Rate Jun +0.9% vs +1% YoY May (F/cast was 1%)
Inflation Rate Flash Jun +1.9% YoY vs +2% May (F/cast was +2%)
Inflation Rate Flash Jun +0.3% MoM vs +0.3% May (F/cast was +0.4%)    
Unemployment Rate May +3.7% vs +3.8% Apr (F/cast was +4.4%)
Unemployment Change Jun 5.9% vs 5.9% May revised (F/cast was 5.9%)
Inflation Rate Prelim Jun +1.5% YoY vs +1.4% May (F/cast was +1.6%)
Inflation Rate Prelim Jun +0.2% MoM vs +0.3% May (F/cast was +0.3%)
Household Consumption May +10.4% MoM vs -8.7% Apr revised (F/cast was +0.6%0
PPI May +0.5% MoM vs -0.8% Apr revised (F/cast was +0.6%)
PPI May +7.2% YoY vs +6.7% Apr revised (F/cast was+7.9%)  
Current Account Q1 £-12.8B vs £-26.3B Q4 (F/cast was £-16B)
Business Investment Final Q1 -16.9% YoY vs -7.4% Q4 (F/cast was-18.1%)
Business Investment Final Q1 -10.7% QoQ vs +5.9% Q4 (F/cast was-11.9%)
GDP Growth Rate Q1 -1.6% QoQ vs +1.3% Q4 (F/cast was -1.5%)
GDP Growth Rate Q1 -6.1% YoY vs -7.3% Q4 (F/cast was -6.1%)
EUROZONE Manufacturing PMI, Unemployment Rate
GERMANY Retail sales, Manufacturing PMI
Manufacturing PMI, New Car Registrations,
UK Manufacturing PMI

JAPAN Nikkei futures opened  +47pts (Chicago futures +60pts)  Pre market Tankan data key to market direction along with the PMI data later. Rising covid cases remain a concern.  Worth noting there were no ETF purchases Wednesday.
Yen currently 111.07
Data due pre market  
Tankan Survey
Large Manufacturers
Index Q2 (Q1 was 5 F/cast is 15)
Outlook Q2 (Q1 was 4 F/cast is 17)
Non Manufacturers
Index Q2 (Q1 -1 F/cast is 5)
Outlook Q2 (Q1 was -1 F/cast is 10)
Large All Industry Capex Q2 (Q1 was 3% F/cast is 5.1%)
Small Manufacturers Index Q2 (Q1 was -13 F/cast is -7)
Foreign Stock and Bond Investment,
Later Manufacturing PMI Jun (May was 53 F/cast is 51.5)
Earnings Heiwado Co. (8276 JP), Kusuri no Aoki Holdings Co. (3549 JP) , Osaka Organic Chemical Industr (4187 JP), Weathernews Inc. (4825 JP)
Tokyo reported a spike in new covid cases to 714 (highest since May 26)  Nationwide the total was 1,821.
Japan considering to extend special covid measures for a further two weeks -VE
The launch of a Toyota assembly plant in Ghana, the second auto assembly plant in the country in less than a year, will help reduce imports of secondhand vehicles and boost export earnings, President Nana Akuffo-Addo said on Tuesday.
Toshiba reportedly could be forced to consider any private equity-led buyout offer in the coming months as activists exert more control over the board after what  one called a “game-changing” show of strength.  +VE I think.
SoftBank denies it’s pulling the plug on Pepper robot.  Saying production was halted temporarily.   It acknowledged the contracts of 330 workers at the Paris division of SoftBank Robotics were being reviewed, but the move was routine and did not spell a death knell for Pepper.  Neutral impact.
Mitsubishi Electric Corp may have shipped some 84,600 units of train equipment such as air conditioners without proper product inspection, company officials sa id Wednesday. -VE
Adastria (2685): 1Q operating profit 624m yen vs estimate 1.87b yen (2 analysts)
Daiseki (9793): 1Q operating profit 3.12b yen vs estimate 2.95b yen (2 analysts)
DMG Mori (6141): To Sell 40b Yen of Convertible Bonds Due 2024 (1)
ES-Con Japan (8892): Preliminary 1H operating profit 2.4b yen vscompany forecast 3.9b yen
HIS (9603): Plans sale and lease-back of HQ building to cut costs
Minebea Mitsumi (6479): To Acquire Plant and MEMS Business From Omron
Nitori (9843): 1Q operating profit 42.8b yen vs analyst estimate 38.5b yen
Pasona Group (2168): Preliminary full-year operating profit 19.9b yen vs company forecast 17.5b yen
Renesas (6723): Cuts Loans For Dialog Deal to 665.4b Yen on Share Sale
Toshiba (6502): To Start Open Market Repurchases of Its Shares July 1
Tsuruha (3391): June same-store sales -2.5% y/y

SOUTH KOREA Expect markets to open flat ahead of Trade Data.  Watch for Auto makers to release sales data.
Data due on the open
Balance of Trade Jun (May was $2.93b F/cast $6.8n)
Exports Jun (May was +45.6% YoY Consensus is 33.6%)
Imports Jun (May was +37.9% YoY Consensus is 33%)
Later Manufacturing PMI Jun (May was 53.7 F/cast is 53)
KDCA reported 794 new covid cases (+199 DoD) a sharp spike to a two month high.  Seoul and its neighbouring regions will delay by a week the relaxation of social distancing rules due to a sudden increase in covid cases, authorities said.  The government had said it would relax social distancing and allow private gatherings of up to six people in the greater Seoul area, from the current four, starting July 1 as the country's inoculation drive has been picking up speed.
North Korea leader Kim Jong Un has warned of a “grave incident” linked to the coronavirus pandemic, stoking fears of an outbreak in the isolated country.  The dictator accused senior officials of incompetence in handling North Korea’s efforts to prevent the spread of Covid-19, according to a statement by the state’s Korean Central News Agency. -VE
President Moon Jae-in assessed Wednesday that South Korea's relationship with the United States has evolved from a traditional military-and-security-based alliance to that of a comprehensive and global partnership +VE.
Hundreds of 5G mobile users filed a joint lawsuit Wednesday against the country's three major mobile carriers; SK Telecom Co., KT Corp. and LG Uplus Corp. over disappointing quality of the latest generation networks, according to their legal representative  -VE Telcos

TAIWAN Expect market to open higher with continued interest in Shipping and Steel.  Tech may see more interest as water restrictions are lifted. Pre market PMI will influence the market direction
Data pre market Manufacturing PMI Jun (May was 62)
CECC reported 56 new covid cases (+2 DoD)
Yageo Corp’s  board of directors has approved a plan to fully acquire Chilisin Electronics Corp in a bid to accelerate the firm’s expansion into high-margin passive component markets through improved product integration, Yageo said yesterday.  It will  allow Yageo to provide a one-stop shopping service, and aligns with supply chain optimization efforts made by clients in the past few years +VE
Housing transactions last month slumped 40% MoM in June, as a level 3 COVID-19 alert chilled buying interest and caused inconvenience for house hunting, major real-estate brokers said yesterday. -VE Developers But Mortgage payments in the first quarter of this year on average took up  36.54 percent of household incomes in Taiwan, a slight drop of 0.27  percentage points from three months earlier, Ministry of the Interior  data showed yesterday.
Shortages of empty containers and voyage cancelations could persist for several more months and drive up freight rates, with the arrival of the peak sales season and lingering congestion at ports in Europe, the US and China, said the local branch of DB Schenker, a leader in supply chain management and logistics solutions. +VE shippers.
U-Ming Marine Transport Corp and Denmark’s World Marine Offshore A/S (WMO) are to form a joint venture called U-Ming Marine Offshore Co to capitalize on Taiwan’s offshore wind power market, the companies announced on Monday. Slight +VE

CHINA Expect market to open higher with Team China support but trading likely to be cautious ahead of PMI data.  President Xi to give a keynote speech likely to be nationalistic rather than economic. Default issues continue to worry the market after some Tus-holding bond holders have not received their coupon.
Data due 9:45am  
Caixin Manufacturing PMI Jun (May was 52 F/cast is 51.9)
The G20 major economies should revitalize a freeze in official bilateral debt payments by the poorest countries to include middle income countries and expand participation by China and the private sector, a White House official said on Wednesday. Slight -VE for China
A survey of 17 advanced economies released on Wednesday by rhe Pew Research Centre shows views about China have remained broadly negative and confidence in its leader Xi Jinping near historic lows, even as the image of the United States has rebounded since President Joe Biden replaced Donald Trump.
ChemChina is aiming to raise around $10 billion from a Shanghai IPO for Swiss agrichemical giant Syngenta Group, in what is set to be the world’s largest flotation this year, sources with direct knowledge of the matter told Reuters. ChemChina, which became part of Sinochem Holdings Corp last month, is also considering a secondary listing for Syngenta that could take place less than a year after its debut, with exchanges in Zurich, London and New York among the options being examined, sources said. Hong Kong is also being considered but is not a frontrunner, said one of the sources.  +VE
The European Parliament is considering a new resolution on Hong Kong in response to the city’s crackdown on the Apple Daily newspaper, which was consistently critical of the local government and Beijing before being forced to shut down. -VE
FT reports US and Japan conduct war games amid China tensions over Taiwan -VE for sentiment.
CNNP (601985 CH): CNNP Sees 1H Net Income +40% to +43%
Citic Sec (600030 CH): Citic Sec Sees 1H Net Income +20% to +30%
Guangdong Haid Group (002311 CH): CLOSED: Guangdong Haid Group Doubles 3Y Loan Facility to $400m
Haitong Securities (600837 CH): Haitong Securities Sees 1H Net Income +35% to +50%
Hengli Petrochem (600346 CH): Hengli Petrochem Sees 1H Net Income About +54%
Merchants Shekou (001979 CH): Merchants Shekou Sees 1H Net Income +305% to +415%
NARI Tech (600406 CH): NARI Tech Sees 1H Net Income +27% to +37%
Naura Technology (002371 CH): Naura Technology Sees 1H Net Income +50% to +80%
PICC Group (1339 HK): PICC Group Prelim 1H Net Income 15.75B Yuan to 17.01B Yuan
Tencent (700 HK): M&A Watch: AMD, American Water, Navistar, Valley National
Tencent (700 HK): Tencent Eyes Controlling Stake in Great Wall Changsheng: Caixin
Tongwei (600438 CH): Tongwei Sees 1H Net Income +177% to +197%
Will Semi (603501 CH): Will Semi Sees 1H Net Income +126% to +147%
Xinyi Glass (868 HK): CLOSED: Xinyi Glass Completes HK$3b 3Y Green Loan Facility
Yunnan Energy New (002812 CH): Yunnan Energy New Sees 1H Net Income +211% to +239%

HONG KONG  Market closed US ADR’s +91pts at  28,919  Chinese Financials were weak. But other  sectors +VE
No data due but after market Wednesday
Retail Sales May +7.8% YoY vs 11% Apr (F/cast was +12%)

Short Selling Wednesday 13.8% vs 16.5% Tuesday
Top Shorts 
Bank of China (3988) 39%, Hengan (1044) 37%, Hang Seng Bank (11) 37%, Citic (267) 31%, BYD Co (1211) 29%, Bud Apac (1876) 28%, BankComm (3328) 25%, Henderson (12) 25%, Petrochina (857) 25%

After market Wednesday news
The Macau and Hong Kong governments had been in talks on border reopening, which will not entail zero local Covid infections in Hong Kong for 28 consecutive days.
Full vaccination will be a must for travelers from Hong Kong to Macau, local media citing Macau Health Bureau's initial plan. Those arriving in Macau with quarantine exemption will be assigned a designated color code distinctive from Macau residents' health codes (either red, yellow, or green). However, Hong Kong entrants will be banned from using swimming pools and other water facilities in the hotels.

The moderated monthly rise in retail sales in Hong Kong for May was due to last year's base, while the current consumption sentiment is still gloomy with the overall sales not yet returning to the pre-epidemic level, said Annie Yau Tse, Chairman of Hong Kong Retail Management Association (HKRMA).  Since June is a traditional low season, the Chairman predicted the retail sales hike in June to come in slightly slimmer than May's, and the 1H21 retail may deliver high-single-digit growth.Wheelock Properties' Managing Director Ricky Wong expressed in a press conference that, including the collaboration projects, the company has sold at least 1,050 units in the first half of the year, cashing in $18.2 billion, already exceeding that of the entire last year of approximately $11.5 billion. Wong projected the full-year sales in 2021 may likely reach over $20 billion. On another note, Wong projected at least 5-8% hike for the Hong Kong home prices in the second half of the year, considering the fact that the pandemic is becoming under control, paired with robust economic recovery and the vibrant market sentiment.REGINA MIRACLE (02199.HK) announced the results for the year ended 31 March 2021, recording a net profit of $126 million, down 56.7% year-over-year, with an EPS of 10.3 HK cents. The company also declared a total amount of dividend worth 4.8 HK cents, including 3.3 HK cents final dividend and 1.5 HK cents special dividend.

China's policy of allowing a couple to have three children can hardly reverse the deceleration of population growth, forecast Fitch Ratings.
The nation's seventh national census suggested that population growth remained feeble although the government has since 2011 revoked "one child policy" progressively.
While the average annual population growth rate of China from 2010 to 2020 hit the trough since the onset of the census, the natural population growth rate in 2020 was the lowest since 1960.
Fitch did not see the latest population policy to increase births drastically as young couples, especially those in tier 1 and 2 cities, kept shouldering high costs from home price surge and education expenses.

Fitch Ratings initiated CALC (01848.HK) a Long-Term Issuer Default Rating (IDR) of BB+ and a Short-Term IDR of B. 
The Outlook on the Long-Term IDR is Stable. The Stable outlook indicated the rating agency's expectation that CALC will maintain sufficient liquidity to support larger orders, given sturdy operating environment in China.

SFC published "Annual Report 2020-21" which stated that the total income for the year ended by March was $3.008 billion, up 89% year-over-year. Owing to the increase in income, a surplus of $979 million was recorded for the year, compared to a deficit of $375 million last year.
The report further stated that as of 31 March 2021, the number of licensees and registrants increased to 47,178, of which the number of licensed corporations rose to 3,159.