Jul 21 ,2024
Synopsis:
Asian markets set for mixed start to Monday trade. Nikkei and ASX futures pointing to declines on the open while Hang Seng futures flat. S&P 500 futures opened higher following Biden's exit from presidential race. Bonds weaker with Australian and New Zealand yield curves bear steepening. Dollar retreating against other currencies. Crude, gold and copper turning higher from Friday's lows. Bitcoin also swinging up.
US politics dominating press after Biden withdrew from presidential race and endorsed VP Harris as Democratic nominee. Unclear whether Harris as nominee will shake up trajectory of presidential race with Trump still favored to win. Markets eyeing upcoming polls for signals on whether Trump's lead narrows and eases expectations of a GOP sweep that has fueled 'Trump trade' momentum over recent weeks.
Rotation trade remains a focus following recent shift from tech to small caps/value on soft-landing hopes, Fed rate cut expectations and 'Trump trade' traction. Semis faced added pressure from Bloomberg report Biden administration weighing tougher tech crackdown on China along with Trump voicing skepticism about defending Taiwan. Strength of move has sparked concerns about sustainability of rotations ahead of upcoming earnings from big US tech.
China expected to leave 1Y and 5Y LPRs unchanged after MLF rate was on hold last week. Economists continue to eye cuts to LPR and RRR over H2 after China economic momentum wad over Q2. Still, yuan depreciation pressures considered an impediment to further rate cuts. Also, no notable mentions of monetary policy in Third Plenum readout as focus shifts to upcoming Politburo meeting for more substance on economic policies.
Pre-open Company News:
6969.HK -- Smoore International obtains marketing granted orders for seven new products in the US
533179.IN -- Persistent Systems downgraded to sell from reduce at Kotak Securities
1821.HK -- ESR Group considering acquiring the remaining interest in LOGOS Property Group; currently holds 86.4%
540716.IN -- ICICI Lombard General Insurance downgraded to add from buy at ICICI Securities
542216.IN -- Dalmia Bharat downgraded to underweight from equal-weight at Morgan Stanley
000963.CH -- Huadong Medicine signs coopration agreement with Jiangsu Qyuns Therapeutics for QX005N
MEG.PM -- Megaworld downgraded to hold from outperform at CLSA
220.HK -- Uni-President China Holdings upgraded to outperform from hold at CLSA
CY6U.SP -- CapitaLand India Trust Management completes previously announced acquisition of Building Q2 at Aurum Q Parc, Navi Mumbai
540065.IN -- RBL Bank upgraded to buy from add at Axis Capital
1070.HK -- TCL Electronics Holdings reports H1 TCL TV shipments 12.52M, +9.2% y/y
000963.CH -- Huadong Medicine acquires Guizhou Hengba Pharmaceutical for CNY528.5M
6955.HK -- Shandong Boan Biotechnology guides H1 net income at least CNY60M vs year-ago (CNY119M)
542216.IN -- Dalmia Bharat downgraded to reduce from add at Kotak Securities
600535.CH -- Tasly Pharmaceutical Group upgraded to equal-weight from underweight at Morgan Stanley
On Deck:
China:
Economic:
08:00 CST: Foreign Direct Investment Y/Y; consensus
09:30 CST: 1 Year Loan Prime Rate; consensus
South Korea:
Earnings:
Kangwon Land (035250.KS)
New Zealand:
Earnings:
Genesis Energy (GNE.NZ)
India:
Earnings:
IDBI Bank (500116.IN), UCO Bank (532505.IN), Coforge (532541.IN), Zensar Technologies (504067.IN), ZF Commercial Vehicle Control Systems India (533023.IN)
Market Data:
Gold (Aug 24): +$13.30 or +0.55% to $2412.40
WTI Crude (Aug 24): +$0.43 or +0.54% to $80.56
$-¥: (0.27) or (0.17%) to 157.1810
$-KRW: (1.03) or (0.07%) to 1388.8300
A$-$: +0.00 or +0.24% to 0.6701
$-INR: +0.00 or +0.00% to 83.7296
$-CNY: (0.00) or (0.04%) to 7.2670
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