US Stocks Rose Amid Fed Decision

Sep 23 21, 06:05 GMT

General trend

Chinese markets and Evergrande have pared gains.
Shanghai Composite ended morning trading off of the best levels [China Merchants Bank lagged; Property index trimmed gain].
Hang Seng has pared gain after rising >2% [Property index opened higher by more than 5%].
Evergrande’s debt remains in focus; Scheduled debt payments for today [Sept 23rd] include $83.5M of interest on 8.25%, 5-year USD bond and $36M on an onshore bond.
Chinese property developers downgraded ahead of Oct debt repayment deadlines [Sinic Holdings, Xinyuan Real Estate].
S&P ASX 200 has risen after the flat open [Energy and Financial indices gain].
Global officials continue to comment on Evergrande.
BOE rate decision due later today.
China Ministry of Finance (MOF) to sell CNY5.0B in 2-year bonds and CNY2.0B in 5-year bonds in Hong Kong on Sept 23rd.
China PBOC to sell CNY5B in 6-month bills in Hong Kong on Sept 24th (Friday).

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat.
(AU) AUSTRALIA SEPT PRELIMINARY PMI MANUFACTURING: 57.3 V 52.0 PRIOR; PMI Services: 44.9 v 42.9 prior.
(AU) Australia ASIC: Warns of social media led pump and dump campaigns; Working with Market operators to identify and disrupt campaigns.
(AU) Australia total weekly payroll jobs change from Aug 15th to Aug 28th: -0.4% v -0.7% prior.
(NZ) Reserve Bank of New Zealand (RBNZ): To proceed with proposal on Loan to Value Ratio (LVR) restrictions on owner occupied mortgages to reduce risky lending (as expected), effective Nov 1st.
(NZ) New Zealand sells NZ$500M v NZ$500M indicated in 2024, 2031 and 2037 bonds.

China/Hong Kong

Hang Seng opened +1.6% , Shanghai Composite +0.6%.
(CN) China Cabinet: Reiterates view that economy is challenged by pandemic and rising commodity costs continuity; Looks to strengthen macroeconomic policy; to stabilize market expectations; Reiterates call for cross-cyclical adjustment; Looking at measures to further increase consumption; Approves 5-year plan to increase its new infrastructure (seeks both private and overseas capital).
(CN) China President Xi: Reiterates China to give priority to agriculture and accelerate the modernization of the sector.
(CN) China Aug Smartphone Shipments Y/Y: -9.9% v +30.6% prior – CAICT.
(HK) Hong Kong Monetary Authority (HKMA) comments after US Fed meeting: HKD exchange rate and interest rates remain steady; HK money markets continue to operate smoothly.
(CN) China Sec Daily: China Loan Prime rates are more likely to decline in Q4.
(CN) Fitch cuts China 2021 GDP forecast to 8.1% from 8.4%, cites property slowdown.
(CN) China PBOC Open Market Operation (OMO): Injects CNY60B in 7-day reverse repos v CNY60B in 7-day reverse repos prior; injects CNY60B in 14-day reverse repos v CNY60B prior; Net inject CNY110B v Net inject CNY90B prior.
(CN) China PBOC sets Yuan reference rate: 6.4749 v 6.4693 prior.
(CN) PBOC to auction CNY70B in Ministry of Finance Deposits on Sept 26th (Sunday).
(CN) China MOF to sell CNY12.0B of bonds in Hong Kong in Oct and Nov – Chinese press.

Japan

Korea

Kospi opened -0.5%.
(KR) Bank of Korea (BOK): Will strengthen monitoring of risks including Evergrande; Ready to respond to stabilize markets if needed.
(KR) South Korea Finance Ministry: Financial Market volatility could rise in the future; US FOMC results in line with expectations; To closely monitor US Fed tapering speed and risks from Evergrande.
(KR) South Korea Finance Minister to meet with Bank of Korea (BOK) Gov Lee on Sept 30th (Thurs).
(KR) South Korea Sept 1-20 Exports y/y: 22.9% v 40.9% prior; Imports y/y: 38.8% v 52.1% prior.
(KR) Said that South Korea will increase power prices in Q4 – Yonhap.

Other Asia

(SG) Singapore Aug CPI M/M: 0.5% v 0.5%e; Y/Y: 2.4% v 2.4%e; CPI Core Y/Y: 1.1% v 1.0%e.

North America

(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25% (AS EXPECTED); POLICYMAKERS EXPECT FIRST RATE HIKE IN 2022; BOND TAPER MAY SOON BE WARRANTED.
(US) Fed Chief Powell: We could reach conclusion that both tests have been met for tapering as soon as the next meeting; Taper test is ‘all but met’; There is very broad support on timing and pace of taper; Would take reasonably good jobs report in next month to feel taper test has been met; Would not need a ‘knock out’ report; Evergrande situation seems ‘very particular to China’; China has very high debt for an emerging market economy – rate decision Q&A.
(US) ‘Centrist” Democrats said to have discussed cutting the size of the Social-Welfare bill to below $3.0T – US financial press.
(US) President Biden: Committed to delivering on infrastructure and spending plans.
(BR) BRAZIL CENTRAL BANK (BCB) RAISES SELIC TARGET RATE BY 100BPS TO 6.25%; AS EXPECTED; Sees a rate hike of the same magnitude at the next meeting.

Levels as of 01:20 ET

Nikkei 225, closed, ASX 200 +1% , Hang Seng +0.7%; Shanghai Composite +0.4% ; Kospi -0.3%.
Equity S&P500 Futures: +0.3%; Nasdaq100 +0.3%, Dax +0.4%; FTSE100 +0.5%.
EUR 1.1709-1.1683 ; JPY 109.92-109.76 ; AUD 0.7251-0.7222 ;NZD 0.7013-0.6981.
Gold -0.8% at $1,764/oz; Crude Oil +0.2% at $72.38/brl; Copper -0.3% at $4.2095/lb.