Equity Markets Track Thursday’s US Gains, US Payrolls Report And Fed Chair Powell On Radar For Later Today

Sep 06 19, 07:03 GMT

General Trend:

Financials trade generally higher in Asia as government bond yields rise
Australian equities outperform as energy and financial companies gain
Hong Kong Exchanges rises after the company resumed trading on its derivatives market. The firm had disclosed certain connectivity issues on Thursday
ZTE rises over 9% in HK, strength attributed to report related to the winning of 5G business in Europe and resumption of US/China trade talks
Shanghai Telecom Services Index rises over 1.5%, tracks gains in ZTE
Fitch downgraded Hong Kong’s sovereign rating due to the impact of the recent protests
Berkshire Hathaway sold ¥430B in bonds in 6 tranches, debt offering is said to be the largest ever yen denominated bond sale by a non-Japanese issuer
Fed Chair Powell due to speak after the release of the Aug US jobs report

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.3%
(AU) Collins Food, Gold Road, Jumbo, Silver Lake, and Netweatlh to be added to S&P/ASX 200 Index on Sept 23; Ardent Leisure and Australian Pharma to be removed
(AU) AUSTRALIA AUG AIG PERFORMANCE OF CONSTRUCTION INDEX: 44.6 V 39.1 PRIOR
(AU) Australia Port Hedland Aug Iron Ore Exports: 45.4 Mt v 41.0 Mt m/m; Port Hedland Iron Ore Shipments to China +10%
(NZ) ANZ Bank forecasts RBNZ will cut key rate to 0.25% by May 2020 (currently the Reserve Bank of New Zealand official cash rate is 1.00%); Sees rate cuts in Nov 2019, Feb 2020 and May 2020

China/Hong Kong

Shanghai opened +0.4%, Hang Seng +1%
(CN) China Daily: PBOC expected to release more capital, markets expect an overall cut in the reserve requirement ratio (RRR) by as soon as this weekend [China last announced a ‘full-scale’ RRR cut in January 2019]
(CN) China Vice Premier Liu He: Reiterates that domestic economy faces increasing downward pressure but capable and confident to address any difficulties (comments from Sept 5th)
(CN) China PBOC sets Yuan Reference Rate: 7.0855 v 7.0852 prior
(CN) China PBoC Open Market Operation (OMO): Injects CNY40B v skips prior; Net CNY40B injects v drain CNY0B prior
(CN) China State Administration of Foreign Exchange (SAFE) to allow 3 securities firms to participate in a pilot program related to foreign exchange settlement and sales; Says the move may help improve the market-based exchange rate formation for the yuan (CNY) – Xinhua
(CN) Speaking to mid-career officials at the Central Party School, China Pres Xi on Tuesday listed Hong Kong, Macau and Taiwan as a major risk and challenge for the China Communist Party – SCMP
(CN) China Premier Li: China will open its economy even more, also for foreign investment
(HK) Fitch downgrades Hong Kong sovereign rating by 1 notch from AA+ to AA; outlook negative
(HK) Protests expected this weekend at subway stations and government buildings on Friday and at the Hong Kong airport Saturday – US Financial Press

Japan

Nikkei 225 opened +0.6%
(JP) Bank of Japan (BOJ) Gov Kuroda: 20 and 30 year yields have fallen a bit too far; Reiterates lowering negative rate is always an option – Nikkei Interview
(JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Unchanged
(JP) JAPAN JULY LABOR CASH EARNINGS Y/Y: -0.3% V 0.1%E; REAL CASH EARNINGS Y/Y: -0.9% V -0.7%E (7th straight decline in real wages)
(JP) Japan Aug Official Reserve Assets: $1.33T v $1.32T prior
(JP) Japan July Household Spending Y/Y: 0.8% v 0.8%e (8th consecutive rise, longest streak since data became available in 2000)
(JP) Japan July Preliminary Leading Index CI: 93.6 v 93.2e; Coincident Index: 99.8 v 100.7e

Korea

North America

US Fed Chair Powell is scheduled to speak at the University of Zurich on Friday (Sept 6th) at 12:30 PM EST, expected to discuss US economic outlook and interest-rate policy; The comments are seen as being the last remarks by Powell before the Fed goes into silent mode ahead of its Sept 17-18 policy meeting -US financial press
The US Aug nonfarm payrolls report is also due to be released on Friday (8:30 AM EST).

Europe

(UK) UK Labour Party and SNP said to discuss calling for Oct 29 election – US financial press
(US) Pres Trump and French Pres Macron spoke Thursday regarding the digital sales tax; Trump also noted that Iran sanctions would not be dropped at this time
(DE) German Chancellor Merkel: Hopes US-China trade dispute will be over soon as it impacts the entire world; Germany is open for Chinese investment – comments from Beijing

Levels as of 1:20 ET

Nikkei 225, +0.3%, ASX 200 +0.6%, Hang Seng +0.2%; Shanghai Composite +0.1%; Kospi +0.1%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.2%; FTSE100 -0.1%
EUR 1.1040-1.1022 ; JPY 107.10-106.86 ; AUD 0.6825-0.6806 ;NZD 0.6392-0.6363
Gold +0.1% at $1,526/oz; Crude Oil +0.1% at $56.34/brl; Copper -0.2% at $2.626/lb