General Trend
- Hang Seng lags as protest concerns remain
- Smartphone maker Xiaomi rises over 5% in HK, board approved utilization of the maximum HK$12.0B in share buyback authority
- Property shares lag in Shanghai
- Nikkei 225 outperforms amid gains in Iron/Steel, Marine/Transportation and Securities companies
- Fast Retailing is due to report its Aug sales after the Japan close
- Australia Q2 current account and net exports of GDP data beat ests, July retail sales unexpectedly decline; Aussie Q2 GDP data due on Wed
- RBA left rates unchanged (as expected), reiterated domestic economic growth over first half of this year has been lower than earlier expected
- Japan monetary base growth declines to multi-year low as some call for additional easing from BOJ
- South Korea Aug CPI misses est as foreshadowed by the Bank of Korea
- US 30-yr T-Bond Futures drop, tracks weakness in Germany’s Buxl Futures
- US dollar (USD) index rises in Asian trading amid higher yields; EUR/USD hits lowest since May 2017
- Japan and Taiwan sold bonds at lower yields and bid to covers
- US markets return from the Labor Day holiday on Tuesday
- Various US companies announce preparations for Hurricane Dorian
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat
- (AU) AUSTRALIA Q2 CURRENT ACCOUNT (A$): +5.9B V +1.5BE (1st surplus in 44-years); Net Exports To GDP: 0.6% v 0.3%e
- (AU) AUSTRALIA JULY RETAIL SALES M/M: -0.1% V 0.2%E
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.00%; AS EXPECTED; reasonable to expect that an extended period of low interest rates will be required in Australia; GDP in H1 was lower than expected
- (AU) Australia Trade Min Birmingham: US China trade impasse is a concern, looking at diversifying trade opportunities
- (NZ) New Zealand Fin Min Robertson: There is till some solid data in the New Zealand economy; fundamentals remain strong; don’t see unconventional policy in NZ in short term
Japan
- Nikkei 225 opened -0.2%
- (JP) Follow Up: Japan PM Abe to announce Cabinet reshuffle Wed Sept 11th – Japan press
- (JP) Japan Govt and automakers to set up guidelines that will have electric vehicles show how much charge they can still hold in their batteries – Nikkei
- (JP) Japan to establish armed police unit to defend islands disputed with China – Japan Press
- (JP) Japan Atomic Energy Commission White Paper: Japan utilities must develop new technologies and systems to safely decommission and dispose of radioactive waste from the 24 (40%) of Japan’s reactors slated to be decommissioned
- (JP) Japan Fin Min Aso: Reiterates consumption shows no sign of last minute rush in demand ahead of Oct sales tax increase
- (JP) Japan Trade Min Seko: Watching US China trade talks for influence on Japanese firms
- (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.265% v -0.152% prior, bid to cover 3.60x v 3.76x prior (lowest bid to cover since May 2016)
Korea
- Kospi opened -0.1%
- (KR) SOUTH KOREA AUG CPI M/M: 0.2% V 0.5%E; Y/Y: 0.0% V 0.2%E (weakest reading on record)
- (KR) Bank of Korea (BOK) Official Yoon: Not a situation to worry about deflation; low inflation mostly due to supply side factors, expected to rebound towards the end of the year
- (KR) SOUTH KOREA Q2 FINAL GDP Q/Q: 1.0% V 1.1%E; Y/Y: 2.0% V 2.1%E
- 005380.KR Union official accepts prelim wage agreement (without strike)
- (CN) China and North Korea foreign ministers met in Pyongyang and discussed Korean peninsula issues – Xinhua
- (KR) South Korea Vice Fin Min: Will prepare steps to revitalize demand; will coordinate with BOK for a stable macro economy
China/Hong Kong
- Hang Seng opened -0.3%; Shanghai Composite opened +0.1%
- (CN) China State Council financial stability and development committee reiterates China will maintain “reasonably ample” liquidity and “reasonable growth” in aggregate financing as it implements a prudent monetary policy; various risks are “controllable” overall as the economy is stable and financial system is stable and healthy
- (HK) Hong Kong CEO Carrie Lam would quit and apologize for pushing the extradition bill if she ‘had a choice’ – Press
- (HK) Hong Kong Chief Exec Lam: Disruption at airport has harmed international image, all business sectors have been affected by protests; economy is seeking an obvious downturn; Have not resigned and never asked China for permission to resign
- (HK) Hong Kong Deputy leader Cheung: Have not ruled out declaring a state of emergency in responds to tens of thousands of high school and university students boycott classes and violence increases between police and protesters – press
- (CN) China PBOC sets Yuan Reference Rate: 7.0884 v 7.0883 prior
- (CN) China PBoC Open Market Operation (OMO):Skips for 4th consecutive session; Net CNY80B drain v drain CNY0B prior
- 1810.HK Board formally approves to utilize the maximum HK$12B share buyback mandate
- (CN) China Narcotics Control Commissions says it will release laws on fentanyl ‘soon’; China is not the main source of fentanyl to the US; Fentanyl is totally irrelevant to US China trade talks
- (CN) China Commerce Ministry (MOFCOM): To impose anti-dumping tariffs on phenol imported from US, EU, South Korea, Japan and Thailand
North America
- (US) Reportedly US and China are struggling to set a date for Sept trade talks after US officials rejected China’s request to delay Sept 1st tariffs – press
- (US) National Hurricane Center (NHC) issues update on Hurricane Dorian: Maximum sustained winds decline to 145 MPH vs 165 MPH prior
Europe
- (UK) PM Johnson: Chances of a new Brexit deal are rising, seeing encouraging progress; there is no circumstance in which I will ask Brussels for a delay of Oct 31 Brexit date; will ask MPs to back a general election on Oct 14th if I lose vote on delaying no-deal Brexit tomorrow
- (UK) MP Hilary Benn, leading push from “Rebel” Mps, who are seeking to extend Article 50 to January 2020, if UK does not vote a deal through by middle of Oct – FT
- (DE) German Chancellor Merkel to pay official visit to China Sept 6-7th at the invitation of China Premier Li – Chinese press
Levels as of 1:20 ET
- Nikkei 225, +0.1%, ASX 200 -0.3%, Hang Seng -0.4%; Shanghai Composite -0.1%; Kospi -0.2%
- Equity Futures: S&P500 -0.6%; Nasdaq100 -0.8%, Dax flat; FTSE100 flat
- EUR 1.0973-1.0930 ; JPY 106.38-106.17 ; AUD 0.6720-0.6687 ;NZD 0.6312-0.6269
- Gold +0.3% at $1,533/oz; Crude Oil -0.4% at $54.87/brl; Copper +0.4% at $2.540/lb
