Aussie GDP Beats Ests, China Services PMI At 10-Month Low

Sep 05 18, 07:12 GMT

General Trend:

Asian equities track declines in the US
Materials companies trade generally lower
Tencent declines over 2%
Chinese telecoms decline despite M&A speculation
Indonesia equity market drops over 3%
Fast Retailing rises after Aug sales figures
Aussie rises on better than expected Q2 GDP data
China services PMI hits 10-month low
Hong Kong business confidence hits 20-month low amid US/China trade concerns (Aug PMI data)
Reminder: The public comment period related to the US’ proposed tariffs on $200B in China goods is due to end on Sept 6th (Thursday).
Malaysia Central Bank to hold policy meeting later today, no changes expected

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
ASX 200 Resources index -1.5%, Utilities -1.4%, Telecom -1%, Financials -0.9%; REIT +0.3%
(AU) AUSTRALIA Q2 GDP Q/Q: 0.9% V 0.7%E; Y/Y: 3.4% V 2.9%E (fastest growth rate since 2014)
(AU) Australia Weather Bureau: Rainfall deficiencies have worsened in parts of Eastern Australia
(AU) Australia Aug CBA PMI Services: 51.8 v 52.3 prior
(NZ) NEW ZEALAND Q2 VOLUME OF ALL BUILDINGS Q/Q: 0.8% V 2.9%E
(NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr to speak on Sept 7th about geopolitics
(NZ) New Zealand Aug ANZ Commodity Price: -1.1% v -3.2% prior
(NZ) New Zealand to auction NZ$100M in Sept 2040 indexed bonds on Sept 6th

China/Hong Kong

Shanghai Composite opened -0.3%, Hang Seng -0.7%
Hang Seng Property/Construction index -2.3%, Info Tech -2.1%, Materials -2%, Energy -1.9%, Services -1.9%, Industrial Goods -1.7%, Consumer Goods -1.5%, Telecom -1.3%, Financials -1.2%
(CN) CHINA AUG CAIXIN PMI SERVICES: 51.5 V 52.6E (10-month low)
(CN) China PBoC set yuan reference rate: 6.8266 v 6.8183 prior
(CN) China PBoC Open Market Operation (OMO):Skips OMO (11th straight skip)
(CN) China PBoC said to have drained CNY300B by using repos in Aug – US financial press
(CN) China said to begin crackdown related to foreign tax invasion – Global Times
(HK) Hong Kong Aug PMI: 48.5 v 48.2 prior

Japan

Nikkei 225 opened -0.2%
TOPIX Real Estate index -1.9%, Marine Transportation -1.7%, Information & Communication -1.7%, Iron & Steel -0.7%, Retail Trade -0.6%, Electric Appliances -0.6%
(JP) Japan MoF sells ¥2.2T v ¥2.2T indicated in 0.10% 10-year JGBs, avg yield 0.1130% v 0.126% prior, bid to cover 4.55x v 4.17x prior
(JP) JAPAN AUG PMI SERVICES: 51.5 V 51.3 PRIOR (4-month high)
(JP) BoJ would need to see the 10-year JGB yield test 0.20% before any change; the central bank is said to believe its policy tweaks are working and it is satisfied with the yield range – US financial press

Korea

Kospi opened -0.2%
(KR) South Korea President Moon’s Envoys have departed for North Korea – South Korean Press
(KR) South Korea Aug Foreign Reserves: $401.1B v $402.5B prior (first decline in 6 months)

Other

(MY) Malaysia July Trade Balance (MYR): 8.3B v 6.7Be
(PH) Philippines Central Bank (BSP) Chief Espenilla comments after higher than expected Aug inflation data: CPI warrants more decisive non-monetary measures; will weigh the need for further monetary policy action
(PH) PHILIPPINES AUG CPI Y/Y: 6.4% V 5.9%E (new multi-year high)
(SG) Singapore Aug PMI: 51.1 v 53.0 prior
(SG) Singapore Monetary Authority Quarterly Survey: 2018 GDP growth seen at 3.2% v 3.2% in June; USD/SGD forecast raised to S$1.37 by year end v S$1.32 prior

North America

US equities ended lower: Dow -0.1%, S&P500 -0.2%, Nasdaq -0.2%, Russell 2000 -0.4%
S&P500 Communication Services -1.2%
(US) Special Counsel Mueller said to plan to accept written answers from US President Trump – NYT
(US) Fed Study: There is little evidence that major US companies are using the benefits from tax cuts for Capex – financial press
(US) SIA: July global sales of semiconductors $39.5B, +17.4% y/y and +0.4% m/m

Europe

Reportedly EU Brexit negotiator Barnier told UK that the Chequers plan is unacceptable – press
(UK) Germany Chancellor Merkel: aim is to come to agreement with UK on Brexit; Britain can’t enjoy same rights as EU members post-exit
(UK) BOE Gov Mark Carney reportedly expecting to remain in post until 2020 – FT
(DE) German Finance Ministry reportedly set to drop plan to tax internet companies – press
(SA) Saudi Arabia said to be seeking to keep oil prices in the $70-80/bbl range – financial press

Levels as of 01:30ET

Nikkei 225, -0.2%, ASX 200 -0.9%, Hang Seng -1.7%; Shanghai Composite -0.7%; Kospi -0.3%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.2%; FTSE100 -0.2%
EUR 1.1609-1.1576 ; JPY 111.73-111.33 ; AUD 0.7220-0.7171 ;NZD 0.6563-0.6530
Aug Gold flat at $1,199/oz; Sept Crude Oil -0.7% at $69.40/brl; Sept Copper flat at $2.599 /lb