Asia Trades Generally Lower After US Losses

Oct 14 20, 06:11 GMT

General Trend

Shanghai and HK markets traded lower during the morning sessions amid the comments from Xi; The Property and Financial indices decline in HK, Tech index rises
Topix Air Transportation, Iron/Steel and Banks indices are among the decliners in Japan; Information/Communication and Retail indices rise
Consumer firms rise in Australia, decliners include Energy and Financial firms
RBA Gov Lowe is due to speak on Thursday (Oct 15th) at 10 PM GMT [the speech’s title is “The Recovery from a Very Uneven Recession”]
Australia Sept jobs data also due on Thursday (Oct 15th)
Fast Retailing and Taiwan Semi are expected to report earnings on Thursday (Oct 15th)
Companies expected to report earnings during the NY morning include Bank of America, Goldman Sachs, UnitedHealth, Wells Fargo

Headlines/Economic Data

Australia/New Zealand

ASX200 opened flat
(AU) Australia Treasurer Frydenberg: China-Australia relationship is mutually beneficial, despite the difficulties at times
(AU) New South Wales (state in Australia) to delay the further easing of COVID-19 related restrictions, notes rise in locally acquired COVID-19 infections – US financial press
(AU) Australia sells A$2.5B v A$2.5B indicated in 1.25% May 2032 bonds, avg yield 0.9241%, bid to cover 4.4x
(NZ) Reserve Bank of New Zealand (RBNZ) Assistant Gov Hawkesby: Some data is surprising on the upside; Lower exchange rate could provide additional stimulus if interest rates go negative; Negative rates is not a game of bluff
(NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$350M v NZ$380M prior in government bonds as part of QE v NZ$350M sought

China/HongKong

Hang Seng opened +0.7%, Shanghai Composite -0.2%
(CN) China President Xi: Shenzhen will become a modern city for a modern socialist country; China will push forward Greater Bay area construction; China to rely more on domestic market; Urges Shenzhen to advance digital economy and accelerate research; Shenzhen should also develop financial and designing sectors; China to speed up railway construction in Greater Bay area
(CN) China PBOC sets Yuan reference rate: 6.7473 v 6.7296 prior
(CN) China Finance Ministry (MOF) issues initial pricing guidance related to the sale of 3-year, 5-year, 10-year and 30-year USD denominated bonds
HSBC [5.HK] China did not select HSBC to help arrange its (China’s) US dollar denominated bond sale (financial press)
Huawei: Reportedly in talks with multiple companies on sale of part of Honor smartphone business, sale could be worth up to $3.7B – Press
(CN) China PBoC Open Market Operation (OMO): Skips reverse repos v Skips reverse repos prior; Net drain CNY50B v Net drain CNY100B prior

Japan

Nikkei225 opened -0.2%
(JP) Japan govt reportedly mulling lowering the level of its global travel warning – Japanese press
(JP) Japan Aug Final Industrial Production M/M: 1.0% v 1.7% prelim; Y/Y: -13.8% v -13.3% prelim

Korea

Kospi opened flat
(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 0.50%; AS EXPECTED; Economy to show modest export recovery; Not time to implement full scale QE; BOK does not have plan to expand KRW5.0T in T-bond purchases; Expectations for interest rate cut in Nov are not high
(KR) South Korea Vice Min Fin: Gains in Won (KRW) seem to be relatively fast

Other Asia

(SG) SINGAPORE CENTRAL BANK (MAS) SEMI-ANNUAL MONETARY POLICY STATEMENT: WIDTH AND CENTER OF POLICY BAND UNCHANGED; Sees initial 2021 headline inflation -0.5% to +0.5%; Sees initial 2021 core inflation 0-1%; Sees 2020 core CPI to avg -0.5% to 0.0% (prior -1.0% to 0.0%)
(SG) SINGAPORE Q3 ADVANCE GDP Q/Q: +7.9% (seasonally adj basis*) V 33.5%E; Y/Y: -7.0% V -6.8%E [*Note: The Q3 advance Q/Q GDP est relates to the seasonally adjusted ‘annualized’ rate of growth (saa growth rate)]
(SG) Singapore Stats Agency: With effect from the advance GDP estimates for the third quarter of 2020 published on 14 October 2020, MTI will provide the qoq sa growth rate as supplementary information in its press releases on GDP estimates, instead of the qoq saa growth rate, for the purpose of identifying turning points.
(SG) Follow Up: Singapore Q3 GDP said to rise 35.4% q/q on annualized basis (vs 33.5%e) – US financial press

North America

(US) Senate Minority Leader Schumer (D): Trump Admin $1.8T stimulus offer has wrong priorities; Pelosi is right to reject proposals by Trump Admin
(US) Senate Majority Leader McConnell (R): Senate will vote again on ‘targeted’ coronavirus relief; Senate will vote on PPP funding the week of Oct 19th
(US) House Maj Leader Hoyer (D): negotiators agree on airlines and can make a deal on family payments but have not come to agreement on coronavirus testing
(US) Fed’s Daly (non-voter): Reiterates Fed will not hike rates to ward off ‘theoretical’ inflation threat
Apple: CEO: Announces iPhone 12 with 5G support; launches iPhone 12 mini – Apple event comments (from Oct 13th)
Eli Lilly [LLY]: Lilly monoclonal antibody trial has been paused due to safety concerns – press
(US) CDC issues order restricting visitors to the US from certain countries deemed to have a COVID-19 health threat; Order applies to travelers coming from Canada or Mexico – press
Concho Resources [CXO]: ConocoPhillips said to be in talks to acquire the company – US financial press

Europe

(EU) EU Leaders Draft Document: No breakthrough in Brexit negotiations; to step up preparations for no-deal outcome

Levels as of 1:20 ET

Nikkei 225, flat, ASX 200 -0.3% , Hang Seng -0.2%; Shanghai -0.7% Composite ; Kospi -0.9%
Equity S&P500 Futures: +0.2%; Nasdaq100 +0.4%, Dax +0.2%; FTSE100 +0.4%
EUR 1.1751-1.1735 ; JPY 105.51-105.30 ; AUD 0.7175-0.7152 ;NZD 0.6667-0.6644
Gold +0.2% at $1,898/oz; Crude Oil -0.3% at $40.09/brl; Copper +0.3% at $3.0492/lb