Australian Yields Rise After Better Than Expected Employment Data

Sep 13 18, 06:31 GMT

General Trend:

Markets later pare opening gains
Australia S&P ASX200 index lags on declines in financials and utilities
Taiwan Semi declines in the aftermath of Apple’s product announcements
US reportedly planning new round of trade talks with China led by Treasury Sec Mnuchin to get economic negotiations back on track (press)
China Soybean Futures decline, while Shanghai Copper rises amid the trade optimism
NZD declines as milk company Fonterra reports first ever annual loss; Next week’s GDP data in focus (Sept 20th)
South Korea bond yields rise after PM was said to comment on interest rates; curve flattens
ECB and BoE due to hold policy meetings later today

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
ASX 200 Utilities index -1.5%, Financials -1%, Consumer Discretionary -0.3%, Telecom -0.3%; Resources +1.1%, REIT +0.6%
(AU) AUSTRALIA AUG EMPLOYMENT CHANGE: +44K V 18.0KE; UNEMPLOYMENT RATE: 5.3% V 5.3%E
(AU) Australia 3-year bond yield rises after better than expected employment change; up over 3bps on session
(AU) Australia Sept Consumer Inflation Expectation: 4.0% v 4.0% prior
(AU) Australia Trade Min Ciobo: The policies of the India and Pakistan government have contributed to the glut in the global sugar market
(NZ) New Zealand Aug REINZ House Sales Y/Y: +3.1% v +0.7% prior
(NZ) New Zealand Aug Food Prices M/M: -0.5% v 0.7% prior (first decline since Feb)
(NZ) New Zealand sells NZ$250M v NZ$250M indicated in April 2029 bonds, avg yield 2.5711%, bid to cover: 3.1x
Fonterra [FCG.NZ]: Reports FY18 (NZ$) Net loss 196M; Normalized EBIT 902M, -22% y/y; Rev 20.4B, +6% y/y

China/Hong Kong

Shanghai Composite opened +0.9%, Hang Seng +1.7%
Hang Seng Info Tech index +2.7%, Energy +2.7%, Materials +2.6%, Services +2.5%, Industrial Goods +2.2%, Financials +1.3%, Property/Construction +1.3%, Consumer Goods +0.2%
(CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 7 and 14-day reverse repos v CNY60B injected in 7-day reverse repos prior: Net: CNY120B injection v CNY60B injection prior
(CN) China PBoC comments on earlier injection in open market operation (OMO): Says the fund injection aimed at countering factors related to tax payments and government bond issuance
(CN) China PBoC set yuan reference rate: 6.8488 v 6.8546 prior
(CN) China said to end output cuts for steel companies with low emissions – Chinese Press
*(CN) CHINA AUG M2 MONEY SUPPLY Y/Y: 8.2% V 8.6%E (released on Sept 12th)
(CN) CHINA AUG NEW YUAN LOANS (CNY): 1.280T V 1.350TE (released on Sept 12th)

Japan

Nikkei 225 opened +0.2%
TOPIX Marine Transportation index +2%, Info & Communications +1.7%, Iron & Steel +1.5%, Retail Trade +1.5%, Real Estate +1.1%, Electric Appliances +0.4%
Automakers generally outperform
Toyota: Said to have received a technology sharing request from China related to hybrid car technology, in talks to license hybrid system to Geely – US financial press
(JP) Japan Jul Core Machine Orders M/M: 11.0% v 5.5%e (fastest rise since Jan 2016); Y/Y: 13.9% v 4.3%e
(JP) According to the Japan Center for Economic Research, July GDP declined by 0.5% m/m; cited narrowing trade balance and flat domestic demand – Japanese Press
(JP) Japan MoF sells ¥2.0T v ¥2.0T indicated in 0.10% 5-year JGBs, avg yield -0.0710% v -0.0760% prior, bid to cover: 5.53x v 3.95x prior

Korea

Kospi opened +0.1%
(KR) South Korea PM Lee Nak-yon said it is time to ‘seriously’ discuss raising policy interest rate – SK Press
(KR) South Korea reportedly to raises taxes on property ownership for multiple homeowners to curb speculative buying – press
(KR) South Korea Finance Ministry: Plans to issue 10 and 30-year US dollar denominated bonds; details to be decided at a later date
(KR) South Korea President said to have asked Samsung and Hyundai to visit North Korea – South Korean Press
(KR) North Korea may name new UN Ambassador next week – South Korean Press

Other

(ID) Moody’s: Indonesia credit is resilient to Rupiah (IDR) weakness, but further currency declines would be broadly credit negative
(SG) Singapore Monetary Authority (MAS) Managing Dir Menon: Global economy is currently remarkably resilient; tariffs thus far are not yet in the data; Global growth ‘bound’ for slowdown into 2019

North America

US equity markets ended mixed: Dow +0.1%, S&P500 flat, Nasdaq -0.2%, Russell 2000 -0.2%
S&P500 Financials -0.9%; Consumer Staples +1.2%
(US) National Hurricane Center (NHC): Hurricane Florence downgraded to a Category 2 storm (vs. Category 3 prior), maximum sustained winds 110 mph v 115 prior
(US) DOE CRUDE: -5.3M V -1.5ME;
(CA) Canada Foreign Min: Will not be at the Thursday talks related to NAFTA, officials to work on NAFTA in Washington on Thursday; talks are not at a ‘stalemate’

Europe

(IT) Italy Fin Min Tria reportedly threatening to quit over budget – press
(UK) EU reportedly has started redrafting an Irish Brexit protocol as a conciliatory gesture toward UK – press
(UK) Group of Tory Party rebels reportedly sets three-week deadline for PM May to ditch current ‘Chequers’ plan for Brexit deal – press
(UK) Brexit Min Raab: Warns that UK will not pay EU divorce bill without a Brexit agreement
(UK) UK Government: To publish ‘no deal’ Brexit papers on mobile roaming charges and vehicle standards on Thursday
(UK) UK PM May expected to discuss immigration rules at a meeting on Sept 24th – UK Press
RBS: Chairman said to consider up to £4.0B special dividend – UK Press
(TR) Turkey has decided that property sales and rental agreements cannot be made in foreign currency – Local Press
(PT) IMF: Portugal outlook is ‘positive’, sees external risks – Article IV Consultation

Levels as of 01:30ET

Nikkei 225, +1%, ASX 200 -0.7%, Hang Seng +1.2%; Shanghai Composite +0.2%; Kospi +0.1%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax flat; FTSE100 +0.2%
EUR 1.1643-1.1622 ; JPY 111.47-111.15 ; AUD 0.7201-0.7165 ;NZD 0.6567-0.6549
Dec Gold -0.1% at $1,210/oz; Oct Crude Oil -0.7% at $69.86/brl; Dec Copper -0.2% at $2.680/lb