Asian equities were a sea of red excluding Hong Kong and China, which posted gains.
Asian equities were a sea of red excluding Hong Kong and China, which posted gains. The PBOC kept the 1-year medium-term lending facility rate at 2.85% despite the market expecting a 10-basis point cut. We had another improvement in month-over-month data as May industrial production gained +0.7% year over year (YoY) versus April’s -2.9% and expectations of -0.9%. Coal mining jumped +8.2% YoY followed by oil & gas extraction up +6.6% respectively, while pharmaceuticals were down -12.3%. Retail sales were -6.7% YoY which was better than expectations of -7.1% and April’s -11.1% as auto sales, which accounts for 10% of retail sales, fell by -16%. Both Hong Kong and China rallied on better than anticipated economic news and a nice uptick in volume though gains were curtailed with late-day profit-taking. Not bad considering the whole region was off which will make for an uncomfortable day for active managers underweight China. Hong Kong was led by internet stocks with Tencent gaining +1.01%, Alibaba HK +4.35%, and Meituan +1.34%. With the retail sales release, year-to-date online retail sales of physical goods increased by 5.
