Equities Trade Mixed Amid Headlines Related To US/China Trade And US Politics

Oct 07 19, 06:41 GMT

General Trend:

China said to have narrowed the scope for trade deal with the US and is signaling China is reluctant to agree to a broad trade deal pursued by President Trump (US press); Offshore yuan (CNH) declines
US and China trade negotiators are expected to hold high-level talks in Washington DC Oct 10-11 (Thursday-Friday)
China Sept FX reserves registered its first decline in 4 months while its gold holdings continued to rise
Chinese soldiers said to have had first direct interaction with HK protesters since the demonstrations started 4 months ago
Japanese banks decline as BoJ left daily bond purchases unchanged
Australian equities rise on gains in the Telecom Services, Consumer Staples, Energy and Resources sectors; financials lag as 10-year yields decline
HSBC speculated to cut up to 10K jobs
GM’s labor strike continues
Fed’s George (hawk, voter): If consumer was losing confidence then may reconsider rates, currently consumers have been confident amid wage gains
Chinese markets to return from weeklong holiday on Tuesday (Oct 8th)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.4%
(AU) Australia Sept AIG Performance of Construction Index: 42.6 v 44.6 prior
(AU) Australia Shadow treasurer Chalmers: All options are under consideration including increasing bank levy or approving new ACCC if banks do not fully pass on the most recent rate cut – AFR
(AU) Australia PM Morrison said to be resisting internal pressure to add new fiscal stimulus, reiterated pledge to returning budget to surplus – press
(AU) Australia Treasurer Frydenberg considering another inquiry into banking competition; Govt continues to work through recommendations from the banking royal commission – Aussie press

Japan

Korea

Kospi opened +0.5%
(KR) North Korea has ruled out talks with the US, until the US ends its “hostile anti-North Korea policy”; Doubts that US will have an alternative plan within the next 2 weeks – Korean press

China/Hong Kong

Hang Seng opened %; Shanghai Composite opened %
(CN) China Sept Foreign Reserves: $3.092T v $3.105Te (1st decline in 4 months); Decline in FX reserves mainly due to declines of bond prices in major economies and a stronger US dollar that depreciated the value of non-dollar assets.
(CN) China said to have narrowed the scope for trade deal with the US and are signaling they are reluctant to agree to a broad trade deal pursued by President Trump – US press
5.HK Interim CEO Quinn expected to announce up to 10,000 jobs cuts as part of plan to reduce costs – FT
(CN) China soldiers issued arrest warning to Hong Kong protesters Sunday after they pointed lasers at the China barracks in HK (1st direct interaction with mainland military forces amid the 4 months of protests)
(HK) Hong Kong Association of Banks: City’s banking system is stable and there is sufficient cash to meet consumer needs amid reports of long lines at some cashpoints – HK Press

Other Asia

(SG) Singapore Central Bank (MAS) to issue semi-annual monetary policy statement Monday, Oct 14th

North America

(US) Fed’s George (hawk, voter): Leaving US rates unchanged would have been appropriate given moderate growth, benign inflation outlook and record low unemployment
GM UAW union: Talks with GM have “taken a turn for the worse” – US press
AAPL Said to have told suppliers to increase production for the iPhone 11 by 10% due to stronger than expected sales – Nikkei
(US) A second whistleblower has come forward with 1st hand knowledge of President Trump’s attempts to get the Ukraine President to investigate rival Biden – US press (update)

Europe

(UK) PM Johnson will seek a Supreme Court ruling on a no deal Brexit – Telegraph
(PT) Portugal Election Results: Socialist party won, but fell short of an outright majority (106 of 230 seats), PM Costa vows to work with partners in parliament

Levels as of 01:20ET

Hang Seng closed; Shanghai Composite closed; Kospi +0.1%; Nikkei225 -0.2%; ASX 200 +0.7%
Equity Futures: S&P500 -0.4%; Nasdaq100 -0.4%, Dax -0.4%; FTSE100 -0.4%
EUR 1.0974-1.0991; JPY 106.66-106.89; AUD 0.6747-0.6766; NZD 0.6303-0.6323
Commodity Futures: Gold -0.1% at $1,510/oz; Crude Oil 0.0% at $52.80/brl; Copper -0.1% at $2.56/lb