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AstraZeneca (AZN 67.09, -4.48, -6.3%): reports Datopotamab deruxtecan met dual primary endpoint of progression-free survival in patients with advanced non-small cell lung cancer in TROPION-Lung01 Phase III trial; For the dual primary endpoint of overall survival (OS), the data were not mature and an early trend was observed in favour of datopotamab deruxtecan versus docetaxel that did not meet the prespecified threshold for statistical significance at this interim analysis
Morgan Stanley (MS 86.43, +1.03, +1.2%): to increase its quarterly dividend to $0.85/share from $0.775/share and reauthorizes a share repurchase program of up to $20 bln
Equity indices in the Asia-Pacific region began the week on a higher note.
—Equity Markets—
Japan’s Nikkei: +1.7%
Hong Kong’s Hang Seng: +2.1%
China’s Shanghai Composite: +1.3%
India’s Sensex: +0.8%
South Korea’s Kospi: +1.5%
Australia’s ASX All Ordinaries: +0.6%China’s Caixin Manufacturing PMI remained in expansionary territory for the second consecutive month
China’s June Caixin Manufacturing PMI 50.5 (expected 50.2; last 50.9)
Japan’s Manufacturing PMI slipped back into contraction after one month of expansion.
Japan’s June Manufacturing PMI 49.8, as expected (last 50.6).
Q2 Tankan All Big Industry Capex 13.4% (expected 10.1%; last 3.2%).
Q2 Big Manufacturers Outlook Index 9 (expected 5; last 3)
Q2 Large Non-Manufacturers Index 23 (expected 22; last 20)The Bank of Japan announced that the frequency and size of its bond purchases will not change in Q3.
Japan and the EU are reportedly discussing a broadening of their maritime, cyberspace, and supply chain security cooperation. The Reserve Bank of Australia is expected to raise its cash rate by 25 bps to 4.35% overnight.The Reserve Bank of Australia is expected to raise its cash rate by 25 bps to 4.35% overnight.
Australia’s May Building Approvals 20.6% m/m (expected 2.0%; last -6.8%)
Home Loans 4.0% m/m (last -3.0%).
May Private House Approvals 0.9% m/m (last -3.8%)
June MI Inflation Gauge 0.1% m/m (last 0.9%).
June Manufacturing PMI 48.2 (expected 48.6; last 48.4)
June Commodity Prices -21.5% yr/yr (expected -15.5%; last -22.2%)South Korea’s June Nikkei Manufacturing PMI 47.8 (expected 49.4; last 48.4)
India’s June Manufacturing PMI 57.8 (expected 58.0; last 58.7)
Hong Kong’s May Retail Sales 18.4% yr/yr (expected 11.5%; last 15.0%)
Singapore’s Q2 URA Property Index -0.4% qtr/qtr (expected 2.3%; last 3.3%)
Major European indices trade in positive territory.
—Equity Markets—
STOXX Europe 600: +0.2%
Germany’s DAX: -0.2%
U.K.’s FTSE 100: +0.1%
France’s CAC 40: UNCH
Italy’s FTSE MIB: +0.9%
Spain’s IBEX 35: +0.3%Final June Manufacturing PMI readings from Germany, France, Spain, Italy, Switzerland, and the U.K. remained in contractionary territory.
Eurozone’s June Manufacturing PMI 43.4 (expected 43.6; last 44.8)
Germany’s June Manufacturing PMI 40.6 (expected 41.0; last 43.2)
U.K.’s June Manufacturing PMI 46.5 (expected 46.2; last 47.1)
France’s June Manufacturing PMI 46.0 (expected 45.5; last 45.7). May Budget deficit EUR107.20 bln (last deficit of EUR83.70 bln)
Italy’s June Manufacturing PMI 43.8 (expected 45.3; last 45.9)
Spain’s June Manufacturing PMI 48.0 (expected 47.7; last 48.4)
Swiss June procure.ch PMI 44.9 (expected 42.3; last 43.2) and June CPI 0.1% m/m (expected 0.2%; last 0.3%); 1.7% yr/yr (expected 1.8%; last 2.2%)Germany expects EUR16.6 bln of net new borrowing for 2024 and it is planning to spend 2% of GDP on defense, in-line with the NATO target
The June ISM Manufacturing Index fell to 46.0% (consensus 47.1%) from 46.9% in May. The dividing line between expansion and contraction is 50.0%, so the sub-50.0% reading for June reflects a general contraction in manufacturing activity for the eighth straight month.
The key takeaway from the report is that the manufacturing sector continues to operate in a state of contraction as optimism about the second half of 2023 weakens amid recession concerns. According to the ISM, a Manufacturing PMI above 48.7%, over a period of time, generally indicates an expansion of the overall economy.
Total construction spending increased 0.9% month-over-month in May (consensus 0.4%) after increasing a downwardly revised 0.4% (from 1.2%) in April. Total private construction was up 1.1% month-over-month while total public construction rose 0.1% month-over-month. On a year-over-year basis, total construction spending was up 2.4%.
The key takeaway from the report is the renewed strength in new single family construction, which reflects the pickup in demand for housing despite the jump in mortgage rates.
Treasury yields fell after the data releases.
The 2-yr note yield, at 4.92% before the data, is up one basis point to 4.88%.
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