Equities trade mixed, CN markets lag on COVID-19 and tech regulatory concerns

General trend

- China inflation data was also hotter.

- Commodity currencies lag on China concerns; Industrial metals also drop.

- RBNZ decision in focus [Wed, Jul 13th].

- USD trades firmer following US jobs data; Upcoming US CPI data in focus [Wed, Jul 13th].

- Still no tariff relief for CN.

- Evergrande news weighs on CN/HK property developers.

- HK TECH index drops on regulatory news.

- Macau Casino firms down amid COVID concerns.

- Japanese equities outperform following elections; USD/JPY rose to the highest level since 1998.

- Aussie mining shares drop.

- US equity FUTs have extended declines.

- Taiwan Stabilization Fund expected to hold a committee meeting on Monday (July 11th).

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened -0.2%.

- (NZ) NZIER Shadow Board: the Reserve Bank of New Zealand (RBNZ) should increase the Official Cash Rate (OCR) by 50bp at the upcoming meeting in July [Wed, Jul 13th].

- LNK.AU Does not recommend Dye & Durham revised offer, continue to engage with Dye & Durham; reports prelim FY22 (A$) Op EBIT 152M v 141.4M y/y; Rev 1.18B v 1.16B y/y.

- (AU) The market expectation for the Reserve Bank of Australia (RBA) cash rate by Dec 2022 has declined to 3.14% [vs 3.86% three weeks ago; the current RBA cash rate is 1.35%] - US financial press.

Japan

- Nikkei 225 opened +1.4%.

- (JP) Japan Parliament election results: Ruling party coalition won 76 seats and the Liberal Democratic Party (LDP) won 63 seats out of 125 seats.

- (JP) Bank of Japan (BoJ) Gov Kuroda: Reiterates economy showing some signs of weakness but picking up as a trend; core CPI moving around 2% - Branch managers meeting.

- (JP) Japan May core machine orders M/M: -5.6% V -5.5%E; Y/Y: 7.4% V 5.6%E.

- (JP) Japan PM Kishida: Not considering new COVID-related restrictions now; Instead of cutting sales tax, we will take targeted steps to cushion blow from rising energy and food prices.

- (JP) Japan ruling coalition projected to maintain majority in upper house in Sunday's election – press.

- (JP) Japan PM Kishida expected to reshuffle cabinet in Aug or Sept – Nikkei.

- (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].

Korea

- Kospi opened +0.3%.

- (KR) South Korea Jul 1-10 Exports Y/Y: +4.7% v -12.7% prior; Imports Y/Y: 14.1% v 17.5% prior; Chip exports Y/Y: +10.4% v +0.8% prior.

China/Hong Kong

- Hang Seng opened -1.2%; Shanghai Composite opened -0.5%.

- (CN) China Jun CPI M/M: 0.0% V -0.1%E; Y/Y: 2.5% V 2.4%E (2-year high); PPI Y/Y: 6.1% v 6.0%e (Saturday).

- (CN) Shanghai reports its first case of the BA.5 Omicron sub-variant on July 10th; Authorities order 2 more rounds of mass testing, to be completed on July 12-14th in at least 9 districts – press.

- (CN) Shanghai reports 69 new covid cases and 1 outside of quarantine for July 10th.

- (CN) China regulator fines Tencent and Alibaba for failure to comply with anti-monopoly rules on disclosure of transactions.

- (HK) Macau to shut all non-essential businesses including casinos for the week between July 11-18th due to Covid outbreak.

- (CN) China PBOC sets Yuan reference rate: 6.6960 v 6.7098 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY3.0B in 7-day reverse repos v CNY3.0B prior; Net CNY0B v Net drain CNY7.0B prior.

- Evergrande [3333.HK]: [Onshore] Bondholders said to reject proposal to postpone repayment; cites exchange statement [relates to a CNY4.5B bond] - financial press.

Other

- (IR) IAEA report says Iran has begun enriching uranium with advanced machines at its underground Fordow plant; Iran informed the IAEA it plans to use the machines to enrich uranium to up to 20% purity, less than the 60% it is producing elsewhere.

- (SL) Sri Lanka Pres plans to resign on July 13th amid protests in the country; PM also agrees to quit - press.

- (TW) Taiwan to clamp down on 'stock market vultures'.

North America

- (US) Fitch affirms United States sovereign rating at AAA; Revises outlook to Stable from Negative [from Jul 8th].

- (CN) China President Xi and President Biden to speak in coming weeks according to Sec of State Blinken – press.

- TWTR Said to be assembling legal team to sue Elon Musk over dropped takeover deal; Aims to file suit early in upcoming week - press.

- (MX) Moody's cuts Mexico sovereign rating to Baa2 from Baa1; Outlook revised to Stable from Negative [from Jul 8th].

Europe

- AGL.IT To be acquired by Switzerland's Dufry at exchange ratio of 0.158 new Dufry shares for each Autogrill share or €6.33/shr cash.

- DANSKE.DK Cuts FY22 (DKK) Net 10-12B (prior 13-15B) citing challenging financial market conditions.

- (EU) Some growing worry among European leaders that the routine shutdown of Nord Stream for routine maintenance may become permanent – press.

- (UK) Liz Truss announces she will run for PM via Telegraph.

- (EU) ECB’s Holzmann (Austria, hawk) said central bank should possibly raise rates by 75bps at Sept 8th policy meeting – European press.

- (IE) Ireland Jun Construction PMI: 46.4 v 51.5 prior (1st contraction in 13 months).

Levels as of 01:20 ET

- Nikkei 225, +1.2%, ASX 200 -1% , Hang Seng -3%; Shanghai Composite -1.5% ; Kospi -0.1%.

- Equity S&P500 Futures: -0.7%; Nasdaq100 -1%, Dax -1%; FTSE100 -0.6%.

- EUR 1.0185-1.0135 ; JPY 137.27-135.98 ; AUD 0.6900-0.6815 ;NZD 0.6193-0.6163.

- Gold -0.1% at $1,740/oz; Crude Oil -1.1% at $103.72/brl; Copper -1.9% at $3.4527/lb.