From Marc to Market:
Overview: The new week has begun quietly. The dollar is drifting a little higher against most major currencies, with the Scandis and dollar-bloc currencies the heaviest. The yen and Swiss franc's resilience seen last week is carrying over. Most liquid and freely accessible emerging market currencies are lower, and the JP Morgan EM currency index, which snapped a four-day drop ahead of the weekend, is trading lower today. It has fallen in three of the past four Mondays. Benchmark 10 year bond yields are softer, with the 10-year Treasury yield off almost three basis points to 1.33%. European yields are 2-3 bp lower. China's 10-year yield is off four basis points and at 2.94% is at a new three-month low, following last week's softer inflation readings and reserve requirement cut. With the prospects of a longer lockdown in Sydney, Australia's 10-year benchmark yield is at a new three-month low (~1.30%). Italy's benchmark yield of 73 bp is also a new three-month low. The MSCI Asia Pacific equity index snapped a four-day spill, led by the Nikkei's 2.25% gain, its largest in three weeks. Europe's Dow Jones Stoxx 600 that rallied 1.3% before the weekend is little changed with energy, materials, and financial sectors acting as the biggest drags, while utilities, healthcare, and real estate offset. US equity futures are trading lower. Gold is trading inside the pre-weekend range (~$1796-$1812). August WTI rallied 3.25% in the last two sessions but has begun the new week a little heavier. It has held below $75 to straddle the $74 level. The IEA's monthly report is due tomorrow ahead of OPEC's report on Thursday. The US Department of Agriculture world supply and demand report is due out later today. The CRB Index 11-day rally ended at the start of last week, but it recovered the last two sessions for a 1.25% gain.....MUCH MORE
Asia Pacific
China has tightened the rules on foreign listings for companies with over one million users as it tightens its cybersecurity rules. ByteDance's planned IPO is an early victim. It seems clear that China's effort is about control of personal data. The move also represents the rising power of the Cyberspace Administration of China, a new intra-agency creation. It, coupled with new rigorous antitrust efforts, signals a new phase for Beijing. On top of this, the PBOC's 50 bp cut in required reserves last week took the market by surprise. Most of the funds freed up (~$155 bln) will be used to repay the medium-term lending facility and upcoming tax payments. Yet to be seen is the pressure to lend to smaller businesses, which some observers anticipate. China is expected to report June trade figures tomorrow ahead of the Q2 GDP figures on July 15 in Beijing.
The capex cycle in China continues, and this may be the takeaway from the 7.8% surge in Japan's core machinery orders, which were three times more than the median forecast in Bloomberg's survey projected. The highlight of the week, though, is the BOJ meeting that concludes at the end of the week. The BOJ may downgrade growth forecasts as Tokyo is in its fourth formal state of emergency (until August 22). The BOJ is also expected to announce new support for green lending, including possibly purchasing green bonds....
