General Trend
- Hang Seng TECH index drops over 2% after losses on the Nasdaq; Financial and Property indices decline by over 1%, Gaming firms also drop
- Shanghai Composite declines by 1% during morning session, Consumer Staples index dropped over 2.3% (Kweichow Moutai dropped over 3%)
- Australia Resources index declines by over 1.5%, tracks the recent declines in metals; Energy index tracks Wed’s rise in oil prices
- Japanese equities outperform in Asia; Marine Transportation and Bank indices rise; Iron/Steel and Air Transportation indices are among the decliners
- AUD/JPY declines after initially rising after Aussie jobs data
- US 30-year Treasury FUTs rise in Asia after dropping on Wed
- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thursday
- Indonesia and Taiwan Central Banks expected to hold rate decisions later today (consensus is unchanged)
- BOE also due to hold rate decision later today
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat
- (AU) AUSTRALIA AUG EMPLOYMENT CHANGE: +111.0K V -35.0KE; UNEMPLOYMENT RATE: 6.8% V 7.7%E; Full Time Employment Change: 36.2K v +43.5K prior; hours worked rose more modestly
- (AU) Reserve Bank of Australia (RBA) Skips offering to buy bonds v skips prior (4 straight skips)
- Scentre Group [SCG.AU]: Prices $3.0B in subordinated hybrid 60-yr notes [2 tranches]
- (NZ) NEW ZEALAND Q2 GDP Q/Q: -12.2% V -12.5%E; Y/Y: -12.4% V -12.8%E (CONFIRMS TECHNICAL RECESSION, FIRST SINCE 2010)
- NZ) New Zealand Debt Management Office (DMO) sells NZ$950M v NZ$950M indicated in 2023, 2029 and 2033 bonds; sells NZ$450M in Apr 2023 bonds, avg yield -0.213%, bid to cover 2.33x
- (NZ) Reserve Bank of New Zealand (RBNZ) released stress test results
- (NZ) New Zealand Aug Non Resident Bond Holdings: 49.5% v 51.6% prior
China/Hong Kong
- Hang Seng opened -0.2%, Shanghai Composite opened -0.2%
- (CN) China PBOC sets Yuan reference rate: 6.7675 v 6.7825 prior
- (CN) Former China PBOC official Sheng Songcheng said China should closely monitor the risk of ‘rapid’ yuan (CNY) appreciation; expects capital inflow pressure to increase further – financial press
- ICBC [1398.HK]: Prices $2.9B (~CNY19.6B) in 3.58% non-cumulative perpetual offshore preference shares [Reminder: ICBC said to consider issuance of up to CNY30B equivalent in US dollar denominated AT1 perpetual shares [preference shares] (from Sept 14th)]
- (HK) Hong Kong Monetary Authority (HKMA) says rates have a slight increase but remain relatively low; rates will be influenced by local funding supply and demand
- (CN) China Vice Minister of Commerce Wang Shouwen: China is seriously implementing the ‘Phase 1’ trade deal with the US
- (CN) China PBoC Open Market Operation (OMO): Injects CNY110B in 7-day reverse repos v injects CNY120B 7-day reverse repos prior
- (CN) US DOJ charges 5 Chinese nationals with hacking over 100 companies – press
Japan
- Nikkei 225 opened -0.3%
- (JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED; Maintains policy framework of “QQE with Yield Control” from around 0.00% (as expected); Maintains asset purchases at annual pace of ‘unlimited’; raises assessments of industrial production and exports; notes the domestic economy has started to ‘pick up’
- Sony [6758.JP]: To price Playstation 5 at $399.99 (no disc drive) and $499.99 (with disc drive); consoles to launch Nov 12th
- (JP) Japan PM Suga: Will continue with Abenomics; top priority to deal with pandemic issues – inaugural press conference as PM (from Sept 16th)
- (JP) Japan Aug Tokyo Condo Sales Y/Y: -8.2% v 7.8% prior
Korea
- Kospi opened -0.2%
- Kia Motors [000270.KR]: Said to suspend all factories in Sohari near Seoul after multiple workers test positive for coronavirus – Autoworker Union
- (KR) Server DRAM prices are expected to continue their decline in Q4 – Korea Press citing TrendForce
- (KR) US Govt said to offer talks with North Korea on Humanitarian Aid – Korea press
- (KR) South Korea confirms 153 additional coronavirus cases v 113 prior; 5 Additional deaths (15 straight days of <200 cases)
- LG Chem [051910.KR] Confirms spin off of battery business, considering IPO of business following spin off
Other Asia
- (SG) SINGAPORE AUG NON-OIL DOMESTIC EXPORTS M/M: 10.5% V 2.2%E; Y/Y: 7.7% V 3.3%E
- (US) US govt reportedly confirms it will sell $7B in arms to Taiwan, including cruise missiles and drones – press
- Top Glove [TOPG.MY]: Reports Q4 (MYR) Net 1.3B v 74.2M y/y, Rev 3.1B v 1.2B y/y; gloves demand remains ‘paranormal’
North America
- (US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25%; AS EXPECTED; FED WILL MAINTAIN LOW RATES UNTIL JOB AND INFLATION GOALS MET; 13 OF 17 MEMBERS PROJECT NO RATE RISE THROUGH AT LEAST 2023; Decision was 8-2; Kaplan and Kashkari dissent
- (US) Fed Chair Powell: today’s policy statement contained ‘powerful forward guidance’; expects guidance offered today will be ‘durable’ – post rate decision Q&A
- (US) White House Chief of Staff Meadows: $1.5T stimulus proposal could be acceptable to Pres Trump
Levels as of 1:20 ET
- Nikkei 225, -0.6%, ASX 200 -1.1% , Hang Seng -1.6%; Shanghai Composite -0.8% ; Kospi -1.3%
- Equity S&P500 Futures: -1%; Nasdaq100 -1.1%, Dax -0.6%; FTSE100 -1.2%
- EUR 1.1819-1.1737 ; JPY 105.17-104.87 ; AUD 0.7312-0.7255 ;NZD 0.6746-0.6681
- Gold -1.2% at $1,946/oz; Crude Oil -1.5% at $39.55/brl; Copper -1.5% at $3.0213/lb
