General Trend
- Asia markets broadly weaker as Fed comments send a wave of worry that the US is still a long way from recovery and the second wave of COVID seems to be starting in some of the world’s major economies. Fed’s Daly indicated that inflation will be the guide on full US employment. Rosengren called on more targeted spending to help the economy amid the pandemic.
- Risk off sentiment kept some strength in the USD, oil, gold and silver all saw a decline in the session with only copper keeping a bit of strength.
- Australia Treasurer indicated that Oct 6th budget would focus on spending and recovery of jobs rather than a surplus, which would not be prudent given the pandemic
- Japan PM Suga after a call with South Korea President Moon said the countries need to repair ties
- China Beige Book indicates that there are 2 sides to the economy and the Govt is only highlighting the side that is doing well, large corporations
- Japan 40-year JGB auction saw its lowest bid to cover since 2015
- Tensions between Australia and China continue to bubble as China bans 2 scholars from Australia from entering the country
- After failed deal with Softbank, WeWork sells controlling stake of its China unit for $200M in funding
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.4%
- WBC.AU Confirms A$1.3B penalty related to to AUSTRAC AML/CTF proceedings for money laundering lawsuit
- (AU) Australia Treasurer Frydenberg: Oct 6th budget to deal with a unique recession; Revised strategy to focus on jobs led recovery, to provide fiscal support through tax measures
- (NZ) New Zealand Aug Trade Balance (NZ$): -0.4B v -0.4Be
Japan
- Nikkei 225 opened -0.6%
- (JP) Bank of Japan (BOJ) minutes for July 14-15th policy meeting: Virus measures exerting intended effects; Members agreed to add easing without hesitation, with eye on impact of coronavirus on economy
- (JP) Japan PM Suga: Told South Korea President Moon we cannot leave severe relations at where they are now
- (JP) Japan MoF sells ¥500B v ¥500B indicated in 0.50% 40-year JGBs, highest accepted yield 0.6100% v 0.5750% prior, bid to cover: 2.65x v 3.11x prior (Lowest bid to cover since 2015)
- (JP) Japan said to have set aluminum premium for Q4 shipments at $88/t, ~11% increase q/q – Press
Korea
- Kospi opened -1.6%
- (KR) South Korea Finance Ministry: Looking at a plan to expand coverage of state employment insurance to non-regular workers in certain types of hiring
- (KR) South Korea Vice fin Min Kim: Stock Market volatility may expand; to closely monitor and stabilize FX and financial markets; increase in KRW value may be due to CNY rise
- (KR) South Korea Govt: To make efforts to stabilize bond market via active steps, measures to be announced in October – Financial Press
China/Hong Kong
- Hang Seng opened -0.9%; Shanghai Composite opened -0.5%
- (CN) China Sept Beige Book: Larger corporate companies are recovering faster than smaller companies; China is experiences two different economic recoveries
- (CN) China National Health Commission Coronavirus Update for Sept 23rd: 7 additional cases v 10 prior; Additional deaths: 0 v 0 prior
- (CN) China FX Regulator (SAFE) approved $3.36B in in outbound investment scheme, the first approval since Spring 2019 – press
- (CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 14-day reverse repos v CNY200B in 7-day and 14-day reverse repos prior; Net inject CNY10B v Net inject CNY80B prior
- BYTEDANCE.IPO Applies for license in China (in line with China tech export requirements) for exporting prohibited or restricted technologies
- (CN) China PBOC sets Yuan reference rate: 6.8028 v 6.7986 prior
- ANT.IPO Expected to not seek cornerstone investors for IPO in Hong Kong – press
North America
- (US) Fed’s Evans (dove, non-voter): it’s probably a bit ambitious to think there will be $1T in fiscal help; Fed will keep rates where they are until full employment is reached and inflation gets to 2% and overshoots (US session)
- (CA) Canada PM Trudeau: Doing less would mean slower recovery and bigger deficits in long run; We can afford extra spending to tackle pandemic because interest rates are low
- (US) Sec State Pompeo issues warning to US politicians at the state and local level to be vigilant around Chinese diplomats who could be trying to woo them as part of China’s propaganda and espionage campaign – speaking from Wisconsin
- (US) President Trump: Awarding $200M of Cares Act funding to states for Vaccines; Encouraging to see increase in flu vaccine uptake; To decide on FDA vaccine rules
Europe
- (UK) British Chambers of Commerce: UK companies aren’t preparing for the next stage of Brexit, fewer are assessing risks, the Govt needs to do more to help them – press
Levels as of 1:15ET
- Hang Seng -2.2%; Shanghai Composite -1.6%; Kospi -2.5%; Nikkei225 -1.3%; ASX 200 -1.1%
- Equity Futures: S&P500 -0.5%; Nasdaq100 -0.8%, Dax -0.6%; FTSE100 -1.2%
- EUR 1.1682-1.1651; JPY 105.47-105.28; AUD 0.7083-0.7038; NZD 0.6558-0.6529
- Commodity Futures: Gold -0.8% at $1,854/oz; Crude Oil -1.3% at $39.41/brl; Copper -0.3% at $2.94/lb
