Morning Coffee Update - Asian equity markets trade generally higher following the US Fed decision.

Morning Coffee Update

- Asia Market Update: Asian equity markets trade generally higher following the US Fed decision, modest moves have been seen; JPY and CHF rise ahead of upcoming US Q2 GDP data

General Trend:

- US President Biden expected to speak to China President Xi on Thurs (July 28th) [the timing is uncertain]

- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thurs.

- Hang Seng erased gain during the morning session; Mainland Properties Index declines

- Shanghai Composite rose during morning trading

- Nikkei 225 pared gain as the Yen strengthened; Fanuc and Mitsubishi Motors rise after issuing financial results

- Japanese cos. expected to report earnings include Panasonic, Nissan Motor, Murata Manufacturing, Advantest, Renesas, Takeda, Keyence

- Australian equities have extended gains; Fortescue rose following production update

- US equity FUTs trade slightly lower after prior gains; Meta Platforms declines on financial outlook

- Samsung Electronics issued cautious H2 outlook

***Headlines/Economic Data***

Australia/New Zealand

-ASX 200 opened +0.2%

- (AU) Australia Treasurer Chalmers updates on budget and outlook: Raises CPI expectations, expected to peak at 7.75% in Dec quarter, raises wage price index

- SFR.AU Reports Q4 Gold production 9.1M oz v 9.0M oz y/y; Copper production 34.9Kt v 18.3Kt y/y

- FMG.AU Reports Q4 Iron Ore Shipments 49.5Mt v 49.3Mt y/y, Ore Mined 59.2Mt v 64.9Mt y/y

- (NZ) New Zealand July Business Confidence: -56.7 v -62.6 prior; Inflation pressures remain intense but not obviously worsening

- (AU) Australia Q2 Import Price Index Q/Q: 4.3% v 4.5%e; Export Price Index Q/Q: 10.1% v 8.4%e

- (AU) Australia Jun Retail Sales M/M: 0.2% v 0.5%e


-Nikkei 225 opened +0.7%

- (JP) Bank of Japan (BOJ) Dep Gov Amamiya: Aiming to achieve 2.0% CPI, not temporary increase in Inflation; There are high uncertainties for wage growth

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected]

- (JP) Japan MOF sells ¥3.0T v ¥3.0T indicated in 0.00% 2-year JGBs: Avg Yield: -0.0740% v -0.0490% prior; bid-to-cover: 4.33x v 3.81x prior

- 7211.JP Reports Q1 Net ¥38.6B v ¥6.09B y/y, Op ¥30.8B v ¥10.6B y/y, Rev ¥528.7B v ¥431.9B y/y; Raises FY22 outlook; CFO: Chip shortage has eased more than expected - post earnings comments (yesterday after the close)


-Kospi opened +0.9%

- 005930.KR Reports final Q2 (KRW) Net 10.95T v 9.45T y/y; Op 14.1T v 14.0T prelim (12.6T y/y); Rev 77.2T v 77.0T prelim (63.7T y/y)

- (KR) South Korea Aug Business Manufacturing Survey: 78 v 83 prior; Non-Manufacturing Survey: 80 v 81 prior

- (KR) North Korea leader Kim: Ready to mobilize nuclear war deterrence; Calls for a posture to promptly mobilize nuclear war deterrence

- (KR) Bank of Korea (BOK) announces Mortgage Back Securities (MBSs) will be eligible for outright purchases

- (KR) South Korea National Pension Service: Overseas Investments are not the main driver of the KRW

- (KR) South Korea Jun Department Store Sales Y/Y: 2.3% v 19.9% prior; Discount Store Sales Y/Y: 18.2% v -3.0% prior

- (KR) South Korea President Yoon has ordered steps that would remove illegal activities on Stock Market Short selling

China/Hong Kong

-Hang Seng opened +0.2%; Shanghai Composite opened +0.4%

- (CN) China Securities Times: Sees low chance of further decline in short-term rates

- (HK) Hong Kong Fin Sec Chan: Confirms Hong Kong will lower GDP forecasts at next meeting; Expects H2 performance better than H1

- (HK) Hong Kong Monetary Authority (HKMA) Gov: Expects overnight and 1-month interbank rate to continue increasing at a much faster pace; Hong Kong Public should be prepared for increasing interbank rates

- (CN) China PBOC sets Yuan reference rate: 6.7411 v 6.7731 prior

- (CN) China PBOC Open Market Operation (OMO): Sells CNY2.0B in 7-day reverse repos v CNY2.0B prior; Net drain CNY1.0B v Net drain CNY1.0B prior

- (HK) Hong Kong Monetary Authority (HKMA) raises base rate by 75bps to 2.75% (as expected)

- 3333.HK Creditors said to demand an additional explanation for while $2.0B in cash was seized – press

- (CN) Shanghai adds additional 6 medium-risk areas to lockdown; finds covid cases outside of quarantine

- (CN) China PBOC said to mobilizing $148B bailout for property developers - FT

North America

- (US) Senator Manchin (D-WV): Reached agreement with Leader Schumer to support the 'Inflation Reduction Act' that will pay down national debt, and lower energy and healthcare costs


- BBY Cuts again FY22 Enterprise SSS -11.0% (prior -6.0% to -3.0%), Op margin 4% (prior 5.2-5.4%); Pauses share buybacks; Notes consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened even further since May

- META Reports Q2 $2.46 v $2.51e, Rev $28.8B v $28.7Be; CFO David Wehner to become Chief Strategy Officer; Names Susan Li as new CFO; effective Nov 1st; Notes it reduced its hiring