July 5 Asian Macro Initial Thoughts muted open, US Markets closed


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Asia to see a muted open; whilst the US jobs data +VE for the strength of the recovery but could mean tapering and rate rises start earlier. For Asia expect the markets to open slightly positive but with caution ahead of PMI and other data and with US markets open T/O is likely to be light.
Global supply chain hack -VE for sentiment.
OIL in flux but likely to trade lower as OPEC+ meeting ended without agreement on Friday

Australia Futures indicate  a flat open ahead of data.
Data due Pre market Construction Index, Services & Composite PMI. Later Building Permits, Retail Sales, Job Adverts
Japan expect a flat open following the US with caution ahead of the PMI data due out after the open
S Korea Expect markets to open slightly higher with hopes on the recovery and a renewed interest in Tech, Auto +VE on good sales.
Taiwan Market to open higher with shipping and steel still drivers but with additional interest in tech.
China Market to open lower ahead of PMI data which may give more insight into the slowing economy. E-Commerce weak as Didi being investigated.
HK ADR’s +117pts @ 28,427 with weakness in Chinese financials.
Europe expect a cautious open; watching for the PMI data  
US Closed re-opens Tuesday

JAPAN 
Nikkei futures -17pts (Chicago -60pts) with caution ahead of the PMI data and worries about a fifth covid wave hitting Japan. Mudslides after heavy rain slight -VE
Yen closed 111.04
Data due Services & Composite PMI.
Tokyo Friday reported 518 new covid cases (-198 DoD) and nationwide the total was 1,485 slight +VE
The U.S. goods trade deficit with Japan narrowed 17.5% in May from the previous month to $5.03 billion, the Commerce Department said Friday +VE.
Metropolitan Assembly Seat election results show the LDP won 33 seats in Tokyo’s 127-member assembly, just ahead of Tokyo Citizens First, the party of Tokyo Governor Yuriko Koike, with 31 seats. Even with 23 won by its ally Komeito, LDP fell short of an outright majority -- a target that had been considered within reach. Likely to put pressure on PM Suga.
Household spending likely slowed in May, a Reuters poll showed on Friday, as a new wave of coronavirus infections and a slow vaccination rollout weigh on consumer confidence.  Offical data out at 8:30 a.m. on Tuesday is expected to show all household spending jumped 10.9% year-on-year in May, slowing from a 13.0% gain in the prior month, according to a Reuters poll of 16 economists. Slight -VE for sentiment
Government Pension Investment Fund (GPIF) on Friday declared a record investment return of 37.8 trillion yen ($338.8 billion) for the year ended March 31, raking in the benefits of a robust rally in global stock markets. +VE and good cross read to other funds.
Mitsubishi Electric’s CEO said he will step down to take responsibility for “three decades of systematic deceit” during which the Japanese firm falsified inspection data for air conditioners and brake compressors used in trains. -VE as it reflects a core issue in corporate Japan.
Fast Retailing -VE as French prosecutors have opened an investigation into four fashion retailers suspected of concealing "crimes against humanity" in China's Xinjiang region, a judicial source said on Thursday and included it along with Inditex, SMCP, and Skechers.
Local Govt finances in focus as Kyoto faces bankruptcy by fiscal 2028 unless it figures out how to come up with another ¥160 billion over the next five years, Mayor Daisaku Kadokawa says. Shows the reliance on Tourism -VE for sentiment.


SOUTH KOREA 
Futures indicate a flat open -0.2pt (-0.05%) and expect lighter trading volumes. LG Electronics earnings due this week will put the focus on Tech.
Data due pre market Foreign Exchange Reserves.
KDCA reported 743 new cases to midnight Saturday,  down from Friday’s recent high.
Samsung Electronics and SK hynix are likely to be subject to a global minimum tax rate
that multinational companies will have to pay regardless of where their headquarters are.
LG Corp. on Friday inked a 100 bn-won ($88 mn) investment deal with Kakao Mobility as part of efforts to discover new opportunities in future mobility. But didn’t reveal the stake size it would acquire. +VE
SK Energy and Korea Electric Power Corp. agreed to jointly develop automotive services to promote the use of electric vehicles in the country, SK said Friday. +VE
SK Biopharmaceuticals CEO Cho Jeong-woo vowed to help the firm attain a value of 50 trillion won ($44.02 billion) by 2030 and make the list of the world’s top 10 health care firms. Slight +VE
Hyundai Motor and Kia hit all-time high sales in the US in the first half of this year. They sold a combined 804,944 vehicles +48.1% YoY. +VE
Biomedicines, batteries and OLED panels are rising as key drivers of exports in South Korea, which Seoul officials see as a hopeful sign of the economy becoming more resilient and future-oriented.
According to the Ministry of Trade, Infrastructure and Energy on Sunday, the first half of 2021 reinforced a continuing trend of seven product categories, identified by the government as new growth items, making bigger contributions to the country’s total exports.
Coupang  -VE  on news South Korea’s antitrust watchdog has launched a probe over the accusation that the company has meddled with  algorithms to prioritize its own products, according to multiple reports on Sunday.
Samsung SDI Co.'s electric vehicle (EV) battery business is expected to have turned to operating profit for the first time in the second quarter on strong demand by global automakers, analysts said Sunday.
Hyundai Motor Group's eco-friendly vehicle sales in South Korea jumped nearly 40 percent in the first half of this year compared with a year earlier on strong demand for hybrid models and new electric vehicles, its sales data showed Sunday.


TAIWAN 
Expect market to open higher following the US; Steel and Shipping likely to see interest after Friday’s sell off.
Data due Foreign Exchange Reserves
CECC reported 39 new covid cases Sunday; the lowest since May 14
The government yesterday reiterated that it welcomes plans by Lithuania to open a trade office in Taiwan, as the European nation reviews its policy on East Asia.
Powerchip Semiconductor Manufacturing Corp expects to debut on the Taiwan Stock Exchange by the end of this year after shareholders yesterday approved the initial public offering. +VE
Housing transactions last month totaled 25,027 units in the nation’s six special municipalities, +1.1% MoM as the market showed resilience, despite a nationwide level 3 COVID-19 alert +VE for sentiment.
Far EasTone Telecom is on track to reach a 5G penetration rate of 30% by the end of this year after about 800,000 people upgraded to its ultra-high-speed mobile service within a year of its launch. The use of 5G services has been picking up rapidly since they debuted last summer, with Internet traffic growing 18 percent since then, Far EasTone said. That did not factor in the effects of the COVID-19 situation, it said. +VE
CPC Corp, Taiwan (CPC) and Formosa Petrochemical Corp  on Sunday announced that they would increase gasoline and diesel prices by NT$0.3 per liter this week, the eighth weekly increase in a row.
Kwang Yang Motor Co, which sells scooters and motorcycles under the KYMCO brand, last week announced a strategic partnership with the nation’s biggest cab-hailing service provider, Taiwan Taxi, to electrify the latter’s two-wheeler delivery fleet, GBG Express, using Kwang Yang’s Ionex battery swapping solution.

CHINA 
Expect market to open lower with caution ahead of the PMI data and concerns over debt defaults and international relations. E-Commerce weak as Didi app orders to be removed from app stores over data collection issues.
Data due after the market open; Services & Composite PMI.
The U.S. goods trade deficit with China widened 1.9% to $26.32 billion slight -VE for Trade talks.
US House of Representatives Foreign Affairs Committee will resume work later this month on Democratic-led legislation intended to boost competitiveness with China and push Beijing on human rights, after two days of debate on the measure. Slight +VE for China.
China’s market regulator issued draft rules on Friday to punish illegal pricing activities, including heavy subsidies and the practice by online platforms of charging different prices based on customers’ purchasing behaviour. Among the practices banned in the rules proposed on Friday are subsidies that cut the price of a product to below cost. -VE for Ecommerce names; violation of the rules could incur a fine of 0.1% to 0.5% of a business’ annual sales or even suspension of operations, SAMR said.
China’s home rental prices rose by their fastest for at least 2-1/2 years, according to a private survey, as record numbers of college graduates flocked to big cities in search of jobs as the economy recovers from the coronavirus pandemic.  Slight -VE as could lead to more tightening rules.
H&M's China sales hit as boycott bites; with its products wiped from e-commerce platform Tmall and its store locations from mobile phone maps in China, while its app has vanished from local app stores -VE. Comes as France probes fashion retailers for concealing 'crimes against humanity' in Xinjiang; Uniqlo France, a unit of Japan's Fast Retailing (9983.T), Zara owner Inditex (ITX.MC), France's SMCP (SMCP.PA) and Skechers (SKX.N).

HONG KONG 
ADR’s 117pts at 28,427 with weakness in Chinese Financials, Baba weak but Tencent & Meituan +VE Most US listed China concepts closed lower many at 5 and 10 day lows.
No data due

IPO 
ZYLOXTB-B (02190.HK) scheduled to be listed next Monday (5 July), opened high at $50 in gray market PhillipMart data showed. It closed at $55.6 in gray market, up 30.2% against the listing price of $42.7, on volume of 8.31 million shares and turnover of $477mn, PhillipMart data showed. Excluding handling fee, the book gain was $6,450 per board lot size of 500 shares.

Short Selling Friday 16.8% vs 13.8% Wednesday
Top Shorts  
Country Garden (2007) 46%, Hengan (1044) 41%, Hang Seng Bank (11) 38%, CLP (2) 36%, BankComm (3328) 31%, Bank of China (3988) 31%, MTRC (66) 30%, ICBC (1398) 30%, HSBC (5) 30%, Ping An (2318) 30%, Henderson Land (12) 29%, CKI (1038) 26%, Wuxi Bio (2269) 26%, BaBa (9988) 25%, CK Asset (1113) 25%

WATCH
VITASOY -VE as Mainland supermarkets and retailers have removed all Vitasoy products off their shelves 
after an employee of the Hong Kong beverage maker  circulated a memo online offering condolences to the family of a worker  who had stabbed a police officer.

China Overseas Land and Investment (0688) has released 106 flats in the fourth price list of One Victoria at an average price of HK$26,814 per square foot after a maximum 13.5 percent discount is applied, 16.7 percent higher than the first price list.
The developer collected HK$4.14 billion after selling 370 flats of 400 flats on offer at the Kai Tak project on Saturday.
The new price list offers units ranging from 330 to 766 sq ft, with the discounted price ranging from HK$23,204 to HK$28,748 per sq ft.

Henderson Land Development (0012) sold 10 units at The Henley I in Kai Tak over the weekend including a 298-sq-ft featured unit with a 17-sq-ft balcony which sold for HK$8.38 million, or HK$28,108 per sq ft.

Centaline Property Agency recorded 22 transactions at 10 blue-chip housing estates over the weekend, rising 46.7 percent from a week ago.  The figure has also maintained a double-digit level for 20 consecutive weekends.

XIAOMI-W (01810.HK) announced that on July 2, the Company awarded a total of 70.2317 million Award Shares to 3,904 Selected Participants
under the Share Award Scheme. The closing price of the Shares on the date of grant of the Awards was HK$26.2.

CK ASSET (01113.HK) announced that Li Ka Shing Foundation Limited acquired a total of 1.685 million of the company's shares
at the average price of HK$53.2654, HK$53.32, HK$53.6003 and HK$53.7711 per share on 25 June, 28 June, 29 June and 30 June 2021 respectively. As a result, the deemed interests of Li Ka-shing, Victor T K Li and Li Ka Shing Foundation Limited in CK Asset under the Securities and Futures Ordinance, based on the existing total number of issued shares of nearly 3.647 billion CK Asset shares, are as follows: Li Ka-shing's increased from 45.57% to 45.61%; Victor T K Li's increased from 45.63% to 45.68% and Li Ka Shing Foundation Limited's increased from 10.88% to 10.93%.

SOUND GLOBAL (00967.HK) announced the further delay in publication of annual results and despatch of the annual report for the year ended 31 December 2019; publication of interim results and despatch of the interim report for the six months ended 30 June 2020; and publication of annual results and despatch of the annual report for the year ended 31 December 2020. Trading in the shares of the Company has been suspended with effect from 13 April 2016 and will remain suspended until further notice.Internet names -VE after Guangdong announced further restrictions on large-scale Internet platforms,

Centa-City Leading Index (CCL) last stood at 188.38, up 0.15% weekly 
to a 97-week high, said the research department of Centaline Property.
For the first half of 2021,
CCL +6.9%
CCL Mass +6.53%
CCL (large units) +8.01%
CCL (small-and-medium flats) +6.69%.
The luxury home index outran the small-and-medium flat index, meaning luxury home prices had been chasing laggard in the first half of year.



DOW +0.44%, NDX +0.81%, S&P +0.75%, Russel 2K -1.01%
Markets opened slightly higher and worked higher after the good jobs number but the unemployment rate rose and trading volumes were light. The data also indicated less people now working from home; was 33% now 14% +VE for CBD offices and of a return to a more pre pandemic life style. Lots of chatter about implications for Fed policy; interesting Tech moved higher with Salesforce +1.3% and Amazon rebounding but IBM -4.6% on news CEO standing down and value names were weak.
Didi -5.3% on news the Chinese Cyberspace Administration were launching an investgation into the company’s ‘cyber security risks’ its guidance and supervision and that it must stop registering new users.
Tesla +0.1% says it delivered 201,250 electric vehicles in Q2 as it overcame a global computer chip shortage. The sales figures missed estimates of 207,000 vehicles, according to data provider FactSet. But it was better than Q1.

Banks JPMorgan Chase -0.1%, Citigroup -0.8%, Wells Fargo -0.8%, Amex +0.9%
Work from home names: Facebook +0.1%, Apple +2%, Amazon +2.3%, Netflix +0.1%,  Disney -0.1%, Zoom Video +0.6%, Alphabet +2.3% and Microsoft +2.2%,
Tech NXP Semi +0.4%, Nvidia +1.4%, Micron +0.3%, AMD +1.5%, Skyworks +1.2%
Re-opening stocks  Boeing +1.3% on news of a cargo plane emergency landing in the sea with engine trouble, Caterpillar +0.5%, Simon Property -1.5%, Kohl’s -0.5%, Nordstrom +1.1%, Gap -0.4% to close all of its UK stores by end 2021 as it moves to exclusively online. United Airlines -0.6%, Carnival -1.1%, Wynn Resorts -0.7%, Chevron -0.1%, Exxon Mobil -0.1%,  
Lock down names Campbell Soup -0.1% General Mills unch, JM Smucker -0.3%

DATA
Balance of Trade May $-71.2B vs -69.1B Apr (F/cast was -71.6B)
Non Farm Payrolls Jun 850k vs 583k May revised (F/cast was 650k)
Unemployment Rate Jun 5.9% vs 5.8% May (F/cast was 5.7%)
Ave Hourly Earnings Jun +3.6% YoY vs +1.9% May revised (F/cast was +2.1%)
Ave Hourly Earnings Jun +0.3% MoM vs +0.4% May revised (F/cast was +0.4%)
Participation Rate Jun 61.6% vs 61.6% May (F/cast was 61.7%)
Ave Weekly Hours Jun 34.7 vs 34.8 May revised (F/cast was 34.9)
Government Payroll Jun 188k vs 67k May (F/cast was 80k)
Manufacturing Payrolls Jun 15k vs 39k May revised (F/cast was 25k)
Exports May $206.0b vs 204.7b Apr revised (F/cast was 204.4b)
Imports May $277.3b vs 273.8b Apr revised (F/cast was 276.0b)
Factory Orders May +1.7% MoM vs -0.1% Apr revised (F/cast was +0.3%)
Factory Orders Ex Transport May +0.7% MoM vs +1% Apr revised (F/cast was +1.2%)
Baker Hughes Total Rig Count 475 vs 470 prior
Baker Hughes Oil Rig Count 376 vs 372 prior

USD was slightly weaker vs Yen & Euro. Bitcoin +2.4% @ 33,800.00, VIX -2.65% @ 15.07, US T10 @ 1.431% falls as unemployment rate moves higher
OIL Brent unch, WTI -0.05% closed as OPEC talks were ongoing but they ended without an agreement.
Gold +0.6%, Silver +1.9%, Copper +1.02%, Platinum +0.8%, Palladium +0.73%.
AHEAD Markets closed for 4 July

DAX +0.3%, CAC -0.02%, FTSE -0.03%
Markets opened slightly higher after a mixed Asian session but drifted lower to trade around flat for the day with caution ahead of the US jobs data which beat expectations but unemployment rate rose. Eurozone PPI higher on rising energy costs. Travel & Leisure leading but Financials were a laggard.
Deliveroo +6.7% on news its agreed to extend the partnership with Casino supermarket.
Caixabank -2% announced laying off 6,452 employees in the biggest staff overhaul in the history of the Spanish banking sector.
Meanwhile U.S. activist hedge fun Elliott is urging GlaxoSmithKline +0.4% on news Elliott is urging it to review its leadership and consider selling some of its consumer healthcare business.
Kindred Group +6.2% after announcing the acquisition of Relax Gaming.
Ambu -9.2% after revising down its full-year profit guidance.
Data
Eurozone 

PPI May +1.3% MoM vs +1% Apr (F/cast was +1.2%)
PPI May +9.6% YoY vs +7.6% Apr (F/cast was +9.5%)
France
Budget Balance May €-118.79B vs €-91.37B (F/cast was €-104B
New Car Registration Jun -14.7% YoY vs +46.4% May (F/cast was +16.5%)
AHEAD
EUROZONE Services & Composite PMI
GERMANY Services & Composite PMI, New Car Registrations
FRANCE Services & Composite PMI
UK  New Car Sales, Services & Composite PMI