Equity Markets Open Mostly Higher After US Gains

Aug 22 19, 06:36 GMT

General Trend:

Henderson Land and BYD decline in Hong Kong following earnings
Trade-exposed Li & Fung may report results after the HK close
Shanghai property index declines over 1% after recent gains
Nikkei opened higher, but later pared gains as Yen strengthened
Japanese construction/mining equipment firm Komatsu said to consider inventory reduction (Japanese press)
Equities in Australia outperform amid focus on earnings; Santos rises after issuing results, drives energy index higher
Qantas rises after announcing FY results and stock buyback
South Korean chipmakers drop, Bank of Korea said chip exports decline likely to persist for the rest of 2019
Aug PMI data in focus: Japan manufacturing PMI contracts for 4th straight month, Aussie services PMI sees first contraction in 5 months
Offshore yuan (CNH) declines after weaker CNY fixing
NZD declines ahead of retail sales data on Friday
Markets now look ahead to Jackson Hole after Fed minutes release
Fed Chairman Powell expected to deliver Jackson Hole speech on Friday morning (Aug 23rd)
Indonesia Central Bank decision due later today (majority of analysts see rates unchanged)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
(AU) Australia Aug Preliminary PMI Manufacturing 51.3 v 51.6 prior; PMI Services: 49.2 v 52.3 prior; PMI Composite: 49.5 v 52.1 prior
QAN.AU Reports FY19 (A$) Underlying pretax profit 1.30B v 1.60B y/y, Rev 17.96B v 17.13B y/y
CCL.AU Reports H1 (A$) Net 168.0M v 158.1M y/y; EBIT 289.9M v 301.4M y/y; Rev 2.43B v 2.31B y/y; declares special dividend of A$0.04/share
(AU) Australia ACCC releases its seventh Gas Inquiry Report: Not likely to experience a shortfall in 2020 but supply remains tight and more development and production is needed

Japan

Nikkei 225 opened +0.4%
6301.JP Said to reduce inventory by 10% from Q1 levels by end of FY – Nikkei
(JP) Japan Aug Preliminary PMI Manufacturing: 49.5 v 49.4 prior (4th consecutive contraction)
(JP) Japan Economy Min Motegi: Issues that need to be discussed with US at ministerial level have been narrowed down; Agreed to speed up discussions with USTR Lighthizer; Negotiations are ‘pretty tough’ but we were able to conduct discussions with mutual trust

Korea

Kospi opened +0.1%
(KR) Bank of Korea (BOK): Japan export curbs could be more damaging to local economy than tariff hikes; chip exports likely to continue to fall y/y for the duration of 2019
(JP) South Korea is considering a conditional extension to defense pact with Japan – Japan Press
(KR) South Korea to end the fuel tax cut at the end of Aug (as planned) – financial press
139480.KR To pay KRW130B to 1,000 suppliers and E-Mart Everyday KRW17.5B to 350 suppliers ahead of Sept 10th deadline – Korean press
(KR) North Korea has carried out live fire drills by bombing replicas of South Korea’s F-15K fighter jets, surface-to-air missiles and a radar – Korean press

China/Hong Kong

Hang Seng opened flat; Shanghai Composite opened +0.3%
(CN) China said to have threatened sanctions over US arm sales to Taiwan – financial press
(CN) China PBoC Open Market Operation (OMO): Injects CNY60B in 7-day reverse repos v Injects CNY60B prior; Net injection CNY30B v drain CNY40B prior (1st injection in 4 sessions)
(CN) China PBoC sets yuan reference rate: 7.0490 v 7.0433 prior
(CN) According to Xinhua 14 listed China banks reported H1, of which 13 reported double digit Rev growth, 11 reported net higher than 10% y/y
1910.HK Reports H1 Net $97M v $67.8M y/y, Rev $1.76B v $1.85B y/y
(CN) Major China state owned banks seen supporting yuan and receiving USD/CNY swaps

Other Asia

(SG) Singapore Central Bank (MAS) offering S$2.9B in July 2029 bonds on Aug 28th (2nd highest on record going back to 1998)

North America

(US) FOMC MINUTES FROM JULY 31 MEETING: MOST OFFICIALS SAW RATE CUT AS ‘MID-CYCLE ADJUSTMENT’ OR POLICY ‘RECALIBRATION’; TWO POLICYMAKERS WOULD HAVE PREFERRED A 50BPS CUT IN JULY RATHER THAN 25BPS CUT
(US) US Pres Trump tweets: our “only problem” is Powell and the Fed; urges a ‘BIG CUT’, but “don’t count on him”

Europe

(DE) German Finance Ministry: Early indicators point to sustained slowdown in industrial sector; labor market situation is still favorable
(GE) Germany said to consider negative interest ban for retail savers (in line with earlier speculation from Wed)- German press

Levels as of 1:20 ET

Nikkei 225, -0.1%, ASX 200 +0.4%, Hang Seng -1.2%; Shanghai Composite -0.4%; Kospi -0.4%
Equity Futures: S&P500 +0.1%; Nasdaq100 -0.2%, Dax -0.4%; FTSE100 -0.2%
EUR 1.1093-1.1084 ; JPY 106.65-106.40 ; AUD 0.6789-0.6757 ;NZD 0.6409-0.6371
Gold -0.3% at $1,511/oz; Crude Oil +0.1% at $55.72/brl; Copper -0.3% at $2.571/lb