General Trend
- Tech sector weighs on the Hang Seng, Alibaba drops after the news related to Ant; Tencent also declines
- Shanghai Composite traded flat during morning session, financials rose after MLF operation
- Topix Pharma, Retail and Information/Communication indices are among the decliners; Air Transportation, Iron/Steel and Insurance indices rise
- Australian equities outperform after the comments from Lowe; ASX 200 Energy, Resources and Financial indices rise
- More analysts call for near-term easing after RBA Lowe’s comments (RBC and CBA)
- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thursday
- Fast Retailing and Taiwan Semi are expected to report earnings today
- Companies expected to report earnings during the NY morning include Morgan Stanley, Charles Schwab
Headlines/Economic Data
Australia/New Zealand
- ASX200 opened +0.2%
- (AU) RBA Gov Lowe: Board has made no decisions about further easing; 10-year yields are among highest in Developed world, RBA looking into this; Reasonable to expect further monetary easing will get more traction than was case earlier; Have not yet decided on expansion of Govt debt buying program; Considering what benefits would come from buying longer dated Govt bonds; Reiterates It is possible to cut rates to 10bps (Current rate 25bps); it is not enough for inflation to be forecast to be in the target range; Does not see room to expand Term Funding Facility at the moment.
- (AU) AUSTRALIA SEPT EMPLOYMENT CHANGE: -29.5K V -40.0KE (1st decline in 4 months); UNEMPLOYMENT RATE: 6.9% V 7.0%E
- Whitehaven Coal [WHC.AU]: Reports Q1 Managed ROM coal output 4.49Mt v 4.42Mt y/y; said China coal import restrictions have been persistent theme, situation remains unclear
China/Hong Kong
- Hang Seng opened -0.5%, Shanghai Composite +0.1%
- (HK) Reportedly US State Dept report to Congress lists 10 people subject to sanctions over the China crackdown, including HK Chief Executive Carrie Lam – press
- (HK) Follow Up: Nikkei: US State Dept formally warned international financial institutions that they could ‘soon’ face sanctions for doing business with individuals believed by the US to be responsible for China’s crackdown in Hong Kong; The US State Dept said it would identify the financial institutions within 60 days.
- US State Dept submits application to Trump administration to put Alibaba unit Ant Group on trade blacklist – press
- (CN) China PBoC official Sun (monetary policy chief): CNY currency appreciation reflects China’s good growth prospects
- (CN) China Finance Ministry (MOF) priced $6.0B vs $6.0B indicated in 3-year, 5-year, 10-year and 30-year USD denominated bonds; all 4 tranches were priced at yields that were below the initial pricing guidance; total orders exceeded $27.2B – press
- (CN) CHINA SEPT CPI M/M: +0.2% V +0.4% PRIOR; Y/Y: 1.7% V 1.9%E (lowest annualized reading since Feb 2019)
- (CN) CHINA PBOC CONDUCTS CNY500B 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) OPERATION: RATE 2.95% V 2.95% PRIOR [MLF rate left unchanged for 6th straight month]; CNY200B in MLF funds due to expire in Oct
- (CN) China PBoC official: China GDP growth to see further improvement in Q3 [Reminder: China Q3 GDP data is due to be released on Monday (Oct 19th)]
- (CN) CHINA SEPT M2 MONEY SUPPLY Y/Y: 10.9% V 10.4%E (from Oct 14th)
- (CN) China PBoC Open Market Operation (OMO): Injects CNY50B in 7-day reverse repos v Skips reverse repos prior; Net inject CNY50B v Net drain CNY50B prior
- (CN) China PBOC sets Yuan reference rate: 6.7374 v 6.7473 prior
- (CN) China probing Qingdao City Municipal Health Commission Head due to outbreak of coronavirus
Japan
- Nikkei 225 opened -0.3%
- (JP) Japan Chief Cabinet Sec Kato: Cabinet will approve use of remaining reserve funds soon (Comments on stimulus)
- (JP) Japan-made coronavirus vaccine will not be ready until 2022 – Japan Press
- (JP) Japan Investors Net Buying of Foreign Bonds: +¥1.95T v -¥341.3B prior week; Foreign Net Buying of Japan Stocks: +¥1.42T v +¥530.9B prior week
Korea
- Kospi opened -0.2%
Other Asia
- (TW) Taiwan Central Bank Gov Yang: NT$29/USD is not normal in the mid to long term; Unlikely that US names Taiwan as currency manipulator
- (TW) US Guided Missile Destroyer ship sailed through Strait of Taiwan on Oct 14th – Press
- (TW) Follow Up: China Military followed the US Missile Destroy Ship through the Strait of Taiwan on Weds Oct 14th; China said its military is staying on high alert in the Taiwan Strait – Press
North America
- (US) Treasury Sec Mnuchin: still working on a comprehensive stimulus package; Getting something done before the election will be difficult
- (US) Speaker Pelosi spokesperson: Pelosi and Mnuchin spent time this morning seeking clarification on coronavirus bill language; the two principals will speak again tomorrow
Europe
- (FR) France govt declares public health state of emergency beginning Saturday – Sky News
- (FR) France President Macron: will implement curfew in major cities to stem coronavirus; would be disproportionate to have a national lockdown; Curfew to last four weeks from 9PM to 6AM, beginning Sat, Oct 17th – address to nation
Levels as of 1:20 ET
- Nikkei 225, -0.6%, ASX 200 +0.5% , Hang Seng -1.4%; Shanghai Composite flat ; Kospi -1.1%
- Equity S&P500 Futures: -0.3%; Nasdaq100 -0.6%, Dax -0.2%; FTSE100 -0.6%
- EUR 1.1755-1.1740 ; JPY 105.29-105.07 ; AUD 0.7172-0.7123 ;NZD 0.6668-0.6640
- Gold -0.3% at $1,904/oz; Crude Oil +0.2% at $41.11/brl; Copper -0.2% at $3.0463/lb
