General Trend:
- Hang Seng Tech index drops over 1.5%
- IT and Consumer firms were among the early decliners in Shanghai
- Australia Energy index declines over 4.5%, Financials drop over 2.5%
- Softbank Group declines over 4%, extends losses
- Taiwan semiconductor companies and South Korea’s Hynix track losses in the US; The new US sanctions on Huawei are due to take effect on Sept 15th (Tuesday) [South Korean press]
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.5%
- (AU) Australia Sept Westpac Consumer Confidence: 93.8 v 79.5 prior; M/M: +18.0% v -9.5% prior [Notes slowing of coronavirus cases in Victoria]
- (AU) AUSTRALIA JULY HOME LOANS VALUE M/M: +8.9% V 2.0%E; INVESTMENT LENDING M/M: 3.5% V 8.7% PRIOR
- (AU) Reserve Bank of Australia (RBA) offers for buy A$2.0B in bonds due Apr 2023 and 2024
- (AU) Victoria state (Australia) reports 76 additional coronavirus cases v 55 prior; 11 additional deaths
- (NZ) New Zealand Sept Prelim ANZ Business Confidence: -26.0 v -41.8 prior; Activity Outlook: -9.9 v -17.5 prior
- (NZ) New Zealand Q2 Manufacturing Activity Q/Q: -11.9% v 0.0% prior; Manufacturing Activity Volume: -12.2% v -1.7% prior
- (NZ) New Zealand Fin Min Robertson: Ruling Labour Party pledges 39% tax rate for incomes >NZ$180K/yr (top 2% of earners) [the current top personal income tax rate is 33%] – Labour Party tax policy
- (NZ) New Zealand Aug ANZ Heavy Truckometer M/M: -6.5% v 2.7% prior
- (NZ) New Zealand 2-year swap rate turns negative for first time amid expectations for negative official cash rate (OCR) in NZ; NZ 2023 bond yield moves below 0%
- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$480M v NZ$430M prior in government bonds as part of QE v NZ$480M sought
China/Hong Kong
- Hang Seng opened -1.3%, Shanghai Composite -1.1%
- (CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 7-day reverse repos; Net Inject CNY100B v Net inject CNY100B prior
- (CN) CHINA AUG CPI M/M: +0.4% V +0.6% PRIOR; Y/Y: 2.4% V 2.4%E; PPI Y/Y: -2.0% v -1.9%e (6th straight decline)
- (CN) China PBOC sets Yuan reference rate: 6.8423 v 6.8364 prior
- (CN) China Aug Passenger vehicle sales at 1.73M – PCA (Industry association) [released on Sept 8th]
- China Everbright Bank [6818.HK]: Receives approval to sell CNY40B in bonds in capital bonds
- (CN) China Tech Company Leadership (including former execs at Huawei and SMIC) reported to launch a ‘domestic replacement’ fund do to the US sanctions affecting the supply chains for companies – China Press
- (CN) China Ministry of Finance (MOF): Aug Local Government Net issuance CNY920.8B v CNY272.2B m/m
- (CN) China Finance Ministry (MOF) Sells 2-year and 5-year bonds
Japan
- Nikkei225 opened -1.3%
- (JP) Japan Aug M2 Money Supply Y/Y: 8.6% v 7.9% prior; M3 Money Supply Y/Y: 7.1% v 6.3% prior [Aug Deposits Y/Y 15.3%, fastest increase on record]
- SBI Holdings [8473.JP]: Reported to withdraw from Hong Kong market [reason not initially disclosed] – Japan Press
Korea
- Kospi -1.2%
- (KR) SOUTH KOREA AUG UNEMPLOYMENT RATE: 3.2% V 4.2%E
- (KR) South Korea Fin Min: Aug Jobs survey taken before social distancing measures were tightened; Sept jobs data will include social distancing measures
- (KR) Memory chipmakers in South Korea are expected to be impacted by the additional US sanctions on Huawei [sanctions are due to take effect next week], cites industry sources – Yonhap
- Samsung and LG to stop smartphone panel supply to Huawei [unclear if the move is related to US Sanctions]- Press
- (KR) South Korea to issue USD and EUR denominated bonds: 10 year US dollar bond has initial pricing guidance of 90bps/Treasuries
- (KR) South Korea Govt to submit a 4th extra budget to Parliament this week – Press
- (KR) South Korea Vice Fin Min: Confirms to announce emergency stimulus measures this week [4th extra budget]; Will intervene in bond market if bond yield volatility rises
- (KR) South Korea confirms 156 additional coronavirus cases v 136 prior; 3 additional deaths
Other Asia
- (MY) Malaysia Politician (Former PM) Mahathir posts a call to propose a no confidence vote against PM Muhyiddin
- (PH) Philippines Central Bank (BSP): Amends rules to add BSP Bills and bonds; To hold weekly auctions for BSP Securities
- (TW) China Global Times Editor in Chief Hu Xijin: “Based on what I know, China will sanction senior US officials who visit Taiwan, and American companies which they have ties with. They will never be allowed to enter Chinese mainland and US companies they have ties with will also lose Chinese mainland market”
North America
- (US) Sen Maj Leader McConnell: GOP has tried to break the logjam over coronavirus aid talks; plan to vote on the GOP aid bill this week – press
- (US) Democratic leaders: Sen Maj Leader McConnell’s coronavirus bill is emaciated and is not going anywhere
- (US) President Trump could announce a move to deny retroactive biofuel waivers [sought by refiners] as soon as this week, the article suggests the move might be driven by politics/upcoming elections – Press
- (US) President Trump to announce further troop withdrawals from Iraq and Afghanistan in the next few days – Administration official
- Watford Holdings [WTRE]: Investor group led by Arch Capital makes a $500M ($26/share) bid for Watford [the composition of the offer was not immediately disclosed] – financial press
Europe
- AstraZeneca [AZN.UK]: Late-stage studies of AstraZeneca’s COVID-19 vaccine candidate are on temporary hold while the company investigates if a report of a patient with a serious side effect is linked
- Sabadell [SAB.ES]: Reported to be considering options due to consolidation in Spanish banking sector – Press
Levels as of 1:20 ET
- Nikkei 225, -1%, ASX 200 -2.2% , Hang Seng -0.6%; Shanghai Composite -0.9% ; Kospi -0.6%
- Equity S&P500 Futures: +0.5%; Nasdaq100 +1.2%, Dax +0.6%; FTSE100 -0.1%
- EUR 1.1782-1.1757 ; JPY 106.05-105.83 ; AUD 0.7229-0.7191 ;NZD 0.6627-0.6601
- Gold -0.3% at $1,937/oz; Crude Oil -0.5% at $36.58/brl; Copper +0.5% at $3.0335/lb
