Hang Seng Trades at Over 1-Week Low
The Hang Seng fell 180 points or 0.83% to an over one-week low of 21,679 in morning deals on Monday, down at its first trading day for a new quarter as the stock exchange was closed on Friday for a holiday, amid reports that cities in eastern China tightened COVID-19 curbs following an emerge of virus clusters, with authorities advising people to work from home and halting operations at many public venues. Meantime, Reuters said that a Hong Kong lawmaker who met President Xi Jinping last week had tested positive for coronavirus two days after the meeting. Turning to data, retail sales in Hong Kong dropped 4.9% yoy in May after gaining notably in April. On the corporate front, property developer Shimao Group has missed the interest and principal payment of a $1 billion offshore bond due Sunday, according to Bloomberg News. Among early losers were BYD Company (-2.0%), AIA (-1.3%), Tencent (-1.1%), and Alibaba Holdings (-0.2%). By contrast, Meituan and JD.Com rose 1.5% and 1.7%, each.
Japanese Shares Rise in Cautious Rally
The Nikkei 225 Index rose 0.6% to around 26,100 while the broader Topix Index gained 1.1% to 1,865 on Monday, with both benchmarks snapping a three-day decline, providing some relief from persistent concerns about slowing global growth and surging inflation. Utility stocks led the rebound amid an ongoing power crunch in Japan, with notable gains from Tokyo Electric Power (10%) and Renova Inc (6.7%). A fire that caused a shutdown in a 500 megawatt unit at Japan’s biggest power generator, JERA, exacerbated concerns over a prolonged electricity crunch. Other index heavyweights also advanced, including SoftBank Group (3.6%), Toyota Motor (2.1%), Sony Group (2.4%), Mitsubishi Corp (3.7%), Keyence Corp (2.1%) and Daikin Industries (2.1%). Meanwhile, telecommunications giant KDDI Corp dropped 1.6% after a weekend outage in the firm’s biggest system failure ever which affected almost 40 million users.
Australia Private House Approvals Fall 2.7% MoM
Private house approvals in Australia declined by 2.7 percent month-over-month to 9,687 units in May 2022, after a downwardly revised 0.2 percent growth in the previous month, pointing to the third fall since the start of the year. Approvals dropped in New South Wales (-11.1 percent), South Australia (-4.1 percent), Queensland (-1.3 percent), and Victoria (-0.9 percent), while rose in Western Australia (4.9 percent). Through the year to May, permits for private houses tumbled 29.5 percent.
Australia Building Permits Unexpectedly Rise
The seasonally adjusted estimate for total dwellings approved in Australia unexpectedly expanded by 9.9 percent month-over-month to 16,390 units in May 2022, easily topping market forecasts of a 1.8 percent drop and shifting from a revised 3.9 percent fall a month earlier. This was the first rise in building permits since February, mainly boosted by a sharp rebound in approvals for private sector dwellings excluding houses (32 percent vs -8.1 percent in April). Meantime, approvals for private sector houses fell further (-2.7 percent vs -0.2 percent). Across Australia, the number of dwelling approvals rose in Western Australia (38.7 percent), Tasmania (26.8 percent), Queensland (20.9 percent) and New South Wales (4.7 percent); while declined in both South Australia (-21.3 percent) and Victoria (-6.6 percent). On a yearly basis, however, building permits sank 20.9 percent, due to falls in both approvals of both private sector houses and private sector dwellings excluding houses.
Australia Job Ads Highest Since 2008
Job advertisements in Australia increased by 1.4 percent month-over-month to their highest since 2008 of 243,523 in June of 2022, quickening from a 0.4 percent gain in May. The latest print highlighted that demand for labor showed no sign of stalling and suggested that unemployment was likely to drop to fresh lows in coming months. "The sheer volume of unmet labor demand suggests that underutilisation will keep falling and stay low even as demand growth is curtailed by higher inflation and rising interest rates," said ANZ senior economist Catherine Birch. "The very tight labor market is a key reason why we expect the economy will be resilient in the face of there," she added. On an annual basis, job ads rose 18.4% and 59% higher than January 2020 before the pandemic first struck.
Brent Eases on Global Slowdown Concerns
Brent crude futures eased below $111 per barrel on Monday after jumping 2.4% in the previous session, as investors assessed looming risks of a demand-sapping global economic slowdown despite ongoing supply-side issues. Oil has come under pressure last month as signs of an impending US recession, driven by the Federal Reserve's aggressive fight against inflation, prompted a wave of selling in commodities. Investors are also tracking China’s slow emergence from virus restrictions amid recurring outbreaks throughout the country. Still, supply outages in Libya and expected shutdowns in Norway have offset some of the weakness in crude markets. Moreover, oil remains more than 40% up this year as the global economic recovery from the pandemic slump coincided with disrupted Russian supply due to the war in Ukraine. OPEC+ also struggled to pump more crude due to underinvestment, capacity limits and political unrest in some member states.
Oil Eases on Global Slowdown Concerns
WTI crude futures eased below $108 per barrel on Monday after jumping 2.5% in the previous session, as investors assessed looming risks of a demand-sapping global economic slowdown despite ongoing supply-side issues. Oil has come under pressure last month as signs of an impending US recession, driven by the Federal Reserve's aggressive fight against inflation, prompted a wave of selling in commodities. Investors are also tracking China’s slow emergence from virus restrictions amid recurring outbreaks throughout the country. Still, supply outages in Libya and expected shutdowns in Norway have offset some of the weakness in crude markets. Moreover, oil remains more than 40% up this year as the global economic recovery from the pandemic slump coincided with disrupted Russian supply due to the war in Ukraine. OPEC+ also struggled to pump more crude due to underinvestment, capacity limits and political unrest in some member states.
Japan 10Y Bond Yield Hits 12-week Low
Japan 10 Year Government Bond Yield decreased to a 12-week low of 0.206%, tracking US 10-year Treasury lower. US 10-year Treasury plunged below 3%, as worriers about a possible US recession. The US manufacturing growth slowed to a 2-year low in June 2022, while June's nonfarm payrolls are expected to have slowed from the 390 thousand added in May. The US economy added 390 thousand payrolls in May of 2022, the least since April last year. According to Dow Jones, economists expect 250 thousand payrolls were added in June and the jobless rate kept steady at 3.6%. Locally, investor concerns on ultra-low interest rate in Japan. The Bank of Japan maintained ultra-low interest rates on June meeting, signalling its resolve to focus on supporting the economy's tepid recovery from the Covid-19 pandemic.
China 10Y Bond Yield Hits 35-week High
China 10 Year Government Bond Yeld increased to a 35-week high of 2.955%
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