Asian Equities Trade Mixed As Trump Raises Tariff Threat On China

Sep 10 18, 06:53 GMT

General Trend:

Hang Seng nears ‘bear market’ territory
Apple’s suppliers decline during trading session
On Friday (Sept 7th), US President Trump said there are another $267B in China tariffs that could be launched on short notice, in addition to the latest $200B of tariffs.
Alibaba reveals succession plan for Executive Chairman Ma
China says to fine tune monetary policy in a ‘pre-emptive’ way based on the economic and external situations
China Aug CPI rises more than expected
China Soybean Futures have largest daily rise in over 2 years
Japan Q2 GDP revised higher on Capex

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat
ASX 200 Telecom index -0.8%, Financials -0.2%, Consumer Discretionary -0.1%; Energy +0.9%, Utilities +0.5%
NAB [NAB.AU]: CEO: Bank is keeping its variable home loan rate on hold; notes the need to rebuild customer trust
(AU) According to Newspoll, PM Morrison is favored over opposition leader Bill Shorten; The ruling coalition trails the Labor Party by a 44% to 56% margin – Australian Press
(AU) Reserve Bank of Australia (RBA) Assistant Gov Bullock: Widespread financial stress among households is not imminent; reiterates sees potential vulnerabilities from high household debt
(AU) Australia Government: Recent rain in New South Wales (NSW) not enough to lift drought
(AU) Australia sells A$600M v A$600M indicated in Nov 2022 bonds, avg yield 2.1168%, bid to cover 4.7x
(NZ) New Zealand Institute of Economic Research (NZIER): Economists lower forecast for GDP growth – Quarterly Consensus Survey of Economists
(NZ) New Zealand Q2 Manufacturing Activity Q/Q: 1.8% v 0.6% prior; Manufacturing Activity Volume Q/Q: -1.2% v +1.4% prior (largest drop in 5-years)

China/Hong Kong

Shanghai Composite opened -0.2%, Hang Seng -0.2%
Hang Seng Materials index -2.1%, Services -1.9%, Industrial Goods -1.6%, Consumer Goods -1.5%, Property/Construction -1.3%, Financials -1.2%, Info Tech -0.7%, Utilities -0.5%, Energy -0.2%
Alibaba: Current CEO Daniel Zhang to succeed Jack Ma as Executive Chairman, effective Sept 10 2019
(US) President Trump: there are another $267B in China tariffs that could be launched on short notice, in addition to the latest $200B of tariffs, which could be imposed soon (from Sept 7th)
(CN) China: State Council Committee on Financial Stability met on Sept 7th: To fend off ‘Black Swan’ events; to fine-tune monetary policy in ‘pre-emptive’ way
(CN) CHINA AUG TRADE BALANCE: $27.9B V $31.0BE; Trade Surplus with the US $31.1B (record high) v $28.1B m/m (released on Sept 8th)
(CN) China Ministry of Finance said the government will soon grant higher tax rebates to exporters – Press
(CN) CHINA AUG CPI Y/Y: 2.3% V 2.1%E (highest since Feb)
(CN) CHINA AUG PPI Y/Y: 4.1% V 4.0%E
(CN) China PBoC Open Market Operation: Skips OMO (14th straight skip)
(CN) China PBoC set yuan reference rate: 6.8389 v 6.8212 prior

Japan

Nikkei 225 opened -0.2%
TOPIX Marine Transportation index +0.7%, Info & Communications +0.7%, Securities +0.3%, Electric Appliances +0.4%; Retail Trade -0.3%
Megabanks outperform
(JP) JAPAN Q2 FINAL GDP Q/Q: 0.7% V 0.7%E; ANNUALIZED Q/Q: 3.0% V 2.6%E (fastest growth since 2016); Business Spending Q/Q: 3.1% v 2.8%e (fastest rise since Q1 2015)
(JP) JAPAN JUL TRADE BALANCE BOP BASIS: -¥1.0B V -¥47.7BE
(JP) Japan PM Abe: This will be my last LDP leadership election; Reiterates trade fights don’t benefit any country

Korea

Kospi opened -0.2%
(KR) Bank of Korea (BoK) said to consider cutting its 2018 GDP growth forecast (currently 2.9%) – Local Press
(KR) North Korea holds military parade with no speech from Kim Jong Un and no display of ICBMs – Korean press
(KR) South Korea sells KRW1.3T v KRW1.3T indicated in 10-year bonds: avg yield 2.265%

Other

(ID) Indonesia Aug Foreign Reserves: $117.9B v $118.3B prior (7th straight decline, released on Sept 7th)
(ID) Indonesia Central Bank: Reiterates commitment to remain in markets; to continue duel interventions
(ID) Indonesia Fin Min Indrawati: Sees economic uncertainties to remain at least until 2019, sees higher downside risks in 2019
(IN) Amid the currency weakness, India 10 year yield trades above 8.11% (highest since Nov 2014)
(IN) India said to lack sufficient room to reduce borrowings in FY19/20 – financial press
(PH) Philippines Central Bank (BSP) said to be considering a possible extraordinary policy meeting later in Sept to address inflation and declining peso (PHP) currency – Japanese Press
(PH) Philippines said to be seen as less likely to reach 7-8% GDP growth forecast for 2018 – Local Press

North America

Apple [AAPL]: Proposed tariff list said to cover a wide range of Apple products – press
(CN) According to KLA-Tencor the US semiconductor industry plans to warn the Trump Administration that restrictions on exports of chip and equipment to China could hurt jobs in the US – Japanese Press
CBS [CBS]: Confirms Moonves to depart as Chairman and CEO, effective immediately; CFO Ianniello to be named as acting CEO; Confirms it and National Amusements agreed to dismiss pending litigation, National Amusements agrees not to propose CBS-Viacom merger for at least 2 years
(US) Fed Rosengren (moderate, non-voter): Would not be surprised if Fed estimates of neutral rate and therefore rate path shift higher; Sept rate hike ‘highly probable’
(US) Federal Reserve said to consider a new tool to avert crises – US financial press
(US) US Energy Sec Perry to meet with officials from Saudi Arabia including Energy Minster Al-Falih on Monday in Washington – financial press

Europe

(EU) EU said to be prepared to tell EU Chief Brexit Negotiator Barnier to ‘zero in’ on Brexit deal, preparing new instructions to help close the Brexit deal – FT
(SE) Sweden PM: Election result is still uncertain: to continue as PM until parliament vote, to await the final election outcome before making decisions
(SE) Following the recent election results, Sweden’s Centre right Moderates and Liberals parties have called on PM Lofven to step down.
(IT) Italy Fin Min Tria said domestic bond yield spread to decline as government starts to act – financial press

Levels as of 01:30ET

Nikkei 225, +0.2%, ASX 200 -0.1%, Hang Seng -1.1%; Shanghai Composite -0.7%; Kospi +0.2%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 flat
EUR 1.1565-1.1539 ; JPY 111.10-110.85 ; AUD 0.7120-0.7100 ;NZD 0.6537-0.6512
Aug Gold -0.1% at $1,201/oz; Sept Crude Oil +0.6% at $68.14/brl; Dec Copper -0.3% at $2.612/lb