Taiwan Central Bank Takes Unscheduled ActionEconomic Data
(CN) CHINA Q2 REAL GDP Q/Q: 1.8% V 1.6%E; Y/Y: 7.6% V 7.7%E (13-quarter low); YTD Y/Y: 7.8% V 7.9%E
(CN) CHINA JUNE RETAIL SALES Y/Y: 13.7% V 13.4%E (multi-year low); RETAIL SALES YTD: 14.4% V 14.3%E
(CN) CHINA JUNE INDUSTRIAL PRODUCTION Y/Y: 9.5% V 9.8%E; YTD Y/Y: % V 10.5%E
(SG) SINGAPORE Q2 ADVANCE GDP Q/Q: -1.1% V +0.6%E (First contraction since Q4 of 2011); Y/Y: 1.9% V 2.3%E
(KR) SOUTH KOREA JUNE EXPORT PRICE INDEX M/M: -1.6% V -0.3% PRIOR; Y/Y: 2.2% V 3.2% PRIOR; IMPORT PRICE INDEX M/M: -3.6% V -1.9% PRIOR; Y/Y: -1.2% V 2.1% PRIOR
(CN) CHINA JUNE FIXED ASSETS URBAN INVENTORY YTD Y/Y: 20.4% V 20.0%E (3-month high; first sequential increase since May 2011)
(TW) TAIWAN CENTRAL BANK CUTS RATES OVERNIGHT INTERBANK RATE BY 0.2 BP TO 0.504% (first cut since May 11th); meeting and decision NOT expected
(PE) PERU CENTRAL BANK LEAVES REFERENCE RATE UNCHANGED AT 4.25%; AS EXPECTED
(CL) CHILE CENTRAL BANK LEAVES OVERNIGHT NOMINAL OVERNIGHT RATE UNCHANGED AT 5.00%; AS EXPECTED
(JP) JAPAN MAY FINAL INDUSTRIAL PRODUCTION M/M: -3.4% V -3.1% PRELIM; Y/Y: 6.0% V 6.2% PRELIM; CAPACITY UTILIZATION M/M: -2.2% V -0.6% PRELIM
Markets Snapshot (as of 04:30GMT)
Nikkei225 +0.3%
S&P/ASX +0.5%
Kospi +1.4%
Taiwan's Taiex -0.2%
Singapore Straits Times +0.2%
Shanghai Composite unchanged
Hang Seng +0.5%
September S&P +0.3%
August gold +0.3% at $1,570/oz
August crude oil unchanged at $86.07/brl
Overview/Top Headlines
Markets were cautious during the session, though shifted higher after China released its Q2 GDP, retail sales and industrial production. GDP came in at a 3-month low of 7.6% though NBS said it was in line with expectations and still very strong compared to the rest of the world. S&P ASX and AUD, $1.1076, both got a boost from their largest trading partner's data. Retail sales were at a multi-year low, while industrial production was only slightly lower than expected. Power generation in China was393.4B kwh v 371.8B prior, 0.0% y/y. China Stats Bureau (NBS) said the country would focus more on stabilizing growth; will improve and strengthen macro controls; 7.0-8.0% GDP rate is good. NBS also said China would take new measures to increase consumption.
In Japan shares of Dentsu fell nearly 5% after announcing it would acquire Aegis Group after the close yesterday in a £3.2B deal. Taiwan dollar was marginally weaker after the central bank cut the overnight interbank rate by 0.2 bps, this was not scheduled though the central bank did warn they could have an interim meeting if needed.
Singapore Q2 GDP fell 1.1%, its first contraction since Q4 2011, analysts seem to think that the country will avoid a technical recession in Q3. USD/SGD rose over 30 pips to session highs above S$1.2725 after the data. USD/KRW fell to a low of KRW1,150, though little movement in the pair for most of the session. The Bank of Korea (BoK) cut 2012 GDP forecast to 3.0% to 3.5%, cuts 2012 inflation to 2.7% from 3.2%, core inflation at 2.2% from 2.6%.
EUR/USD tested a fresh 2-yr low yesterday and was pushed a bit further today after Moody's cut Italy's sovereign rating 2 notches to Baa2 and could be cut further. Moody's expects that there will be a sharp increase in funding costs and the near term outlook has deteriorated. Moody's is also concerned about Italy's exposure to event risks.
Speakers/Geopolitical/In The Press
(SG) Singapore Sovereign Wealth Fund Temasek will keep its stakes in Chinese banks.
(CN) China Land Ministry: Recent high priced land sales will not significantly affect markets.
(JP) Japan Finance Minister Azumi: Excessive yen volatility is bad for finances and the economy.
(KR) Bank of Korea (BoK) Governor Kim: Growth forecast was cut due to EU debt crisis and economic slowdown.
(GR) Troika has found some "serious shortcomings" in Greece's reforms - Rheinische Post citing unnamed German government sources.
(CN) China Vice Premier Li Keqiang: There needs to be a joint effort to speed up free trade agreement talks, we have enormous potential for cooperation. - Chinese press
Equities
UMC: Said to be seeking an investment from Qualcomm (NYSE:QCOM). - Digitimes
ANZ.AU: Exec - Pressure on funding costs persists, as deposit competition putting pressure on margin; maintains variable home loan rate at 6.80%.
PDN.AU: Reports FY12 uranium production 6.89M pounds, +21% y/y; Q4 uranium production 2.05M pounds.
CAPL.SG: Wholly owned subsidiaries sold entire 20.75% stake in United Malayan Land for S$62.6M. - Singapore press
Acer, 2353.TW: Cuts 2012 growth shipping targets from 10% to 0-5.0%. - Taiwan press
NTDOY, 7974.JP: Sold over 5M units of its handheld 3DS game system in June; holds 75% of handheld console market. - press