Asia Trades Mixed Amid US Holiday, US Equity FUTs Pare Losses

Sep 07 20, 05:59 GMT

General Trend:

Large-cap tech names and property firms trade generally lower in HK, Financial index rises
Hang Seng index changes take effect from today [originally announced on Aug 14th]
Decliners in Japan include Information/Communication and auto firms; Iron/Steel, Transportation and Financial firms gain
Nikkei-weighted Softbank drops over 6% after recent FT article
Shanghai Composite declined by less than 0.2% during morning session; decliners included IT and Consumer firms, financials traded generally higher
Australian equities opened flat as Victoria released its coronavirus-related roadmap; Consumer related firms trade generally lower, Aged-care firms continue to trade generally lower; Financial and Resource names rise
Samsung rises after receiving over $6.0B network equipment order from Verizon
LARGAN Precision (Taiwanese Apple supplier) declines by over 2%, Aug revenues -22% y/y
Oil prices decline amid reported price cut by Saudi Arabia
Pound (GBP) declines, various press articles focused on the Brexit talks
CME Globex equity products will be halted between 13:00 ET/17:00 GMT until 18:00 ET/22:00 GMT, Interest Rate products will be halted between 13:00 ET/17:00 GMT until 18:00 ET/22:00 GMT

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat
(AU) Victoria (Australia) government released roadmap for easing coronavirus lockdown restrictions (as expected), stage 4 restrictions will remain in Melbourne for at least 2 more weeks [until Sept 28th]; The stage 4 restrictions were initially expected to end by Sept 13th
(AU) Victoria state (Australia) reports 41 additional coronavirus cases (Lowest daily total since June); 9 additional deaths
(AU) Australia Aug AiG Performance of Services Index: 42.5 v 44.0 prior
(AU) Australia Aug ANZ Job Advertisements M/M: +1.6% v +19.1% prior
CSL Limited [CSL.AU]: Announces agreement with multiple entities (Univ of Queensland and AstraZeneca/Oxford Univ) to manufacture COVID-19 vaccines; Vaccines to be distributed in Australia in early 2021
(AU) Australia reported to extend its bankruptcy protection rules and regulations until the end of 2020 due to the coronavirus impact on the economy – Press
(AU) Australia sells A$2.0B v A$2.0B indicated in 2.75% Nov 2029 bonds, avg yield 0.9238%, bid to cover 4.8x

China/Hong Kong

Hang Seng opened -0.3%, Shanghai Composite -0.2%
Semiconductor Manufacturing International (SMIC) [981.HK]: Trump administration considers adding China’s SMIC to trade blacklist – press
SMIC [981.HK]: Says it has no ties with China People’s liberation Army (PLA); Any reports of ties with the military are false; Open to communications with the US Govt to resolve misunderstandings
(CN) CHINA AUG TRADE BALANCE: $58.9B V $49.4BE; Exports Y/Y: 9.5% v 7.5%e; Imports Y/Y: -2.1% v +0.2%e; Aug Iron Ore imports 104Mt v 112.7Mt m/m
(CN) Hangzhou (China) tightened rules for homebuyers -SCMP
(CN) China PBOC sets Yuan reference rate: 6.8386 v 6.8359 prior
(CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v Injects CNY100B in 7-day prior; Net Inject CNY20B v Net inject CNY0B prior
Ant Financial: China reported to put a cap on interest rates that can be charged by consumer lending companies following a China Supreme Court ruling – Financial Press
(CN) China President XI: Nations face tough tasks of stabilizing economies (from Sept 4th)
(HK) Hong Kong Police arrest ~300 protesters on the delay to the Hong Kong Elections – Nikkei
Goldman Sachs: Reportedly Goldman tapped as joint lead manager for Ant Group’s Hong Kong IPO which is expected at up to $30B (press from Sept 5th)

Japan

Nikkei225 opened -0.3%
Softbank [9984.JP]: Reportedly Softbank has been buying options in tech stocks over the last month – FT (from Sept 4th)
Nikkei 225 contract rolled over to the Dec 2020 contract
(JP) Japan Chief Cabinet Secretary Suga: I highly approve of BoJ governor Kuroda; would like to see a continuation of easing policies – Nikkei interview (from Sept 5th)
(JP) Japan Aug Official Reserve Assets: $1.40T v $1.40T prior
(JP) Japan has urged people in the southern islands to exercise caution due to Typhoon Haishen – press
(JP) Japan July Preliminary Leading Index Ci: 86.9 V 84.4 prior; Coincident Index: 76.2 v 76.6 prior

Korea

Kospi opened flat
Samsung Electronics [005930.KR]: Awarded KRW7.9T (~$6.6B) order from Verizon for wireless communications solutions (including 5G); The 5 year agreement will last until Dec 2025 [agreement is said to be Samsung’s largest network equipment supply deal ever]
(KR) South Korea extends social distancing level 2.5 for 1 additional week in Seoul (capital) – Yonhap
(KR) South Korea confirms 119 additional coronavirus cases v 167 prior; 2 additional deaths
Shinhan Financial [055550.KR]: To raise KRW1.16T through rights offering

North America

(US) Fed’s Powell: today’s jobs reports was a good one; jobs are growing faster than many had expected; the economy will need low interest rates for years – NPR interview (from Sept 4th)
Etsy, Teradyne and Catalent Set to Join S&P 500 (Tesla NOT included in S&P500 additions) [from Sept 4th]
(US) US Treasury Sec Mnuchin said he expects a government funding bill to cover US agencies through the beginning of Dec, expected details to be ‘firmed up’ by the end of the week – US press

Europe

UK PM Johnson expected to warn the EU that if there is no breakthrough Brexit deal by Oct 15th, Britain will accept no deal and ‘move on’, according to the UK press; FT says the UK government is planning new legislation that will override parts of the Brexit withdrawal agreement, risking the collapse of trade negotiations with Brussels
Saudi Arabia cuts Oct official selling price for Arab light crude exported to Asia by $1.40/barrel

Levels as of 1:20 ET

Nikkei 225, -0.4%, ASX 200 flat , Hang Seng -0.2%; Shanghai Composite -0.4% ; Kospi +0.6%
Equity S&P500 Futures: -0.3%; Nasdaq100 -1.1%, Dax -0.2%; FTSE100 +0.4%
EUR 1.1847-1.1830 ; JPY 106.38-106.21 ; AUD 0.7299-0.7272 ;NZD 0.6724-0.6703
Gold +0.4% at $1,940/oz; Crude Oil -1.5% at $39.19/brl; Copper -0.4% at $3.0660/lb