Good afternoon everyone. The Chinese equity market just had its worst day since 2007 as the SHCOMP fell nearly 8.5% to close at its two-week low. The selloff spilled onto Hong Kong and Shenzhen as well, with the Hang Seng Index slipping nearly 3.3% — its second-largest drop for the year — while the Shenzhen composite sank 7%. Japan’s Nikkei Average meanwhile slid 1%. Interestingly, the Aussie strongly clung to its inverse correlation with the nation and turned sharply up just as Chinese shares fell.
Here’s what else you need to know:
Chinese June industrial profits slip 0.3%. Signalling how definitely unwell things are in fair China, Chinese industrial profits slipped 0.3% in June, a 0.9% deline from May and a 2.9% drop from April. Reuters
JGB rates rise after BOJ Deputy Governor’s speech. After signalling that the BOJ doesn’t really have much reason to expand its already gigantic monetary easing program, BOJ Deputy Gov. Hiroshi Nakaso saw traders send the 2, 10, and 20-year Japanese Government Bond yields edge up half a basis point. WSJ (paywall)
UBS earnings beat forecasts. UBS shamed more than a few analysts today as the Zurich-based bank blew away forecasts and reported $1.26 billion in net profits for the second quarter. MarketWatch
Fiat Chrysler slapped with record $105 million fine. After allegedly dealing with several recall issues “inadequately,” the Italo-American carmaker has been slapped with a record $105 million fine by the US National Highway Traffic Safety Administration. Fiat Chrysler will also be required to fix several messes that the recall problems have made, including “slow repairs, insufficient response to regulators and poor notification to owners and dealers.” Financial Times (paywall)
Correction: A previous version of NexAsia PM stated Japan government bonds surged 50 basis points. The change was half a basis point, or 0.50 bp.
Photo: JERRYANG