Markets Pare Losses After China PMI

Nov 01 19, 07:11 GMT

General Trend:

Financials lead early gains in Shanghai
Nikkei declines amid recent gains in the Yen; Trade-sensitive Marine/Transportation and Iron/Steel indices decline Financials decline in Japan after recent drop in US Treasury yields
Nintendo rises over 5% after earnings report and affirmation of guidance
Japanese companies expected to report earnings later today include Nippon Steel, Mazda, NTT Data, Sharp, Yahoo Japan and KDDI
Financials continued to weigh on Aussie equities amid lower yields
Friday data releases in the US include ISM Manufacturing and monthly payrolls
Alibaba expected to report results later today

Headlines/Economic Data

Australia New Zealand

ASX 200 opened -0.4% at 6,638
(AU) Australia Oct CoreLogic House Price Index m/m: 1.4% v 1.1% prior (4th straight rise, largest gain in national index since May 2015)
(AU) AUSTRALIA OCT FINAL CBA PMI MANUFACTURING: 50.0 V 50.1 PRELIM
(AU) Australia Oct AIG Performance of Manufacturing Index: 51.6 v 54.7 prior
(AU) AUSTRALIA Q3 PPI Q/Q: 0.4% V 0.4% PRIOR; Y/Y: 1.6% V 2.0% PRIOR
(AU) Australia sells A$800M v A$800M indicated in 1.50% June 2031 bonds, avg yield 1.1489% v 1.0054% prior, bid to cover 3.86x v 2.2x prior

China/Hong Kong

Shanghai opened -0.2%, Hang Seng -0.4%
(CN) CHINA OCT CAIXIN PMI MANUFACTURING: 51.7 V 51.0E (highest since Feb 2017)
(US) Pres Trump: “China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances. The new location will be announced soon. President Xi and President Trump will do signing!’
(CN) China said to doubt that any long term trade deal is possible with President Trump; China is unwilling to budge on big structural change; To demand end to tariffs for any phase 2 talks – financial press (from Oct 31st)
(CN) China Daily: PBoC keeps monetary conditions on ‘even keel’
(CN) China PBoC Open Market Operation (OMO): Skips for fifth consecutive session; Net drains CNY30B v drains CNY60B prior
(CN) China PBOC sets Yuan Reference Rate: 7.0437 v 7.0533 prior (strongest yuan fixing since late Aug)
(CN) PBoC to sell CNY30B in 3-month and 1-year bills in Hong Kong on Nov 7th (Thursday)
(US) China People’s Daily: Provocative words are at wrong time in key point for US and China – responding to US Sec State Pompeo
(CN) Follow Up: China is expected to raise up to €4.0B from euro-denominated sovereign bond sale [first of such issuance since 2004] – FT
(HK) Macau Oct Gaming Rev (MOP) 26.4B v 22.1B prior; Y/Y: -3.2% v +0.6% prior

Japan

Nikkei 225 opened -0.9%
(JP) Passage of US/Japan trade agreement in Japan said to be delayed in Japan’s diet [no reason initially cited]- Japanese press
(JP) Japan Oct Final PMI Manufacturing: 48.4 v 48.5 prelim (6th straight contraction and 40-month low)
(JP) Japan PM Abe to call for stimulus following damage from typhoon Hagibis – Japanese press
(JP) Japan Fin Min Aso:; No instruction yet from PM Abe regarding economic stimulus measures, not of the view that economic measures are needed
(JP) JAPAN SEPT JOBLESS RATE: 2.4% V 2.2%E

Korea

Kospi opened flat
(KR) South Korea Oct Trade Balance $5.39B v $4.8Be; Exports Y/Y: -14.7% v -13.6%e (11th straight decline, largest decline in ~4 years); Semiconductor exports Y/Y: -32.1% v -31.5% prior
(KR) South Korea Industry Min: Export ‘slump’ likely bottomed in Oct, pace of decline to narrow from Nov; Y/Y export growth ‘highly likely’ to turn positive in Q1 2020
(KR) SOUTH KOREA OCT CPI M/M: 0.2% V 0.0%E; Y/Y: 0.0% V -0.3%E

Other Asia

North America

(US) OCT CHICAGO PURCHASE MANAGER INDEX (PMI): 43.2 V 48.0E (lowest since Dec 2015)

Europe

(US) Sec State Pompeo: US will impose new sanctions on Iran construction sector and missile programs and institute new nuclear curbs

Levels as of 1:20 ET

Nikkei 225, -0.5%, ASX 200 +0.1%, Hang Seng +0.5%; Shanghai Composite +0.7%; Kospi +0.4%
Equity Futures: S&P500 +0.3%; Nasdaq100 +0.4%, Dax +0.3%; FTSE100 +0.2%
EUR 1.1167-1.1148 ; JPY 108.06-107.88 ; AUD 0.6910-0.6883 ;NZD 0.6442-0.6406
Gold -0.2% at $1,512/oz; Crude Oil +0.4% at $54.41/brl; Copper +0.4% at $2.649/lb