Most Asian Markets Rise By Less Than 1% After US Gains, Shanghai Lags

Oct 21 20, 08:04 GMT

General Trend

Japanese equities trade broadly higher
HKlisted telecoms rise following results from China Mobile; Vaccine makers also rise
China Unicom may report earnings later today
Shanghai Composite declined by ~0.4% during morning session; IT, Industrial and Property firms moved lower
Energy, Financial and Resources firms rise in Australia; Decliners include Consumer names
RBA Deputy Gov Debelle is due to speak on Oct 22nd (Thursday)
Companies expected to report earnings during the NY morning include Abbott Labs, AutoNation , Biogen, NASDAQ, Thermo Fisher Scientific, Verizon

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
(AU) Former Reserve Bank of Australia (RBA) official Edwards urged the RBA to increase QE, central bank should increase purchases of longerdated bonds; Edwards suggested that further cuts to the RBA cash rate would be less productive than additional bond purchases US financial press
(AU) Australia Sept Preliminary Retail sales M/M: 1.5% v 4.2% prior; The preliminary estimate shows the September quarter (Q3) rose 6.8% [This follows a fall of 2.3% in the June quarter]
(AU) Australia Sept Westpac Leading Index M/M: 0.2% v 0.5% prior
(AU) Australia sells A$2.0B v A$2.0B indicated in 1.00% Dec 2030 bonds, avg yield 0.7672% v 0.85% prior, bid to cover 6.4x v 4.2x prior
(NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$330M v NZ$330M prior in government bonds as part of QE v NZ$330M sought
(NZ) New Zealand reports 25 additional coronavirus cases, 23 at border
(NZ) New Zealand Oct Credit Card Spending M/M: +1.0% v 5.6% prior; Y/Y: 9.9% v 11.8% prior

China/Hong Kong

Hang Seng opened +0.5%, Shanghai Composite +0.1%
(CN) China PBOC sets Yuan reference rate: 6.6781 v 6.6930 prior (Strongest since July 16th 2018)
(CN) Hu Angang (Adviser to China President Xi) said China will maintain 5% GDP growth through 2035, said it is still too early to set a growth target for the next 5years; The adviser suggested that China could still set a growth target at the next National People’s Congress (NPC) [March 2021] Japanese press
(CN) Former NDRC official Peng Sen: China can maintain GDP growth of 56% in 20212025 Chinese press
Cathay Pacific [293.HK]: Updates on restructuring: To cut 8.5K jobs (Speculated 6.0K jobs)
(CN) Strength in HK pharmaceutical firms has been attributed to a report that China’s drug regulator said it would expedite the review of applications related to the clinical use of COVID19 vaccines
(CN) China firms including Huawei are said to seek limitations imposed on NVidia acquisition of ARM
(CN) China PBoC Open Market Operation (OMO): Injects CNY80B in 7day reverse repos v Injects CNY70B in 7day reverse repos prior; Net inject CNY80B v Net inject CNY70B prior
(CN) China NDRC Official: Possible for 2020 Domestic auto production and sales to return to 2019 levels if they keep growing in Q4
(CN) China Commerce Min (MOFCOM) Official: Expects China total vehicle ownership to be ~280M units by end of 2020
(CN) China Finance Ministry: JanSept revenues 6.4% y/y; Spending 1.9% y/y

Japan

Nikkei225 opened +0.2%
Shimachu [8184.JP]: Nitori [9843.JP] confirms has been considering acquiring Shimachu
(JP) Bank of Japan (BOJ) Official Sakurai: Expects inflation to remain weak for now; Will strive to aid corporate funding and maintain market stability
(JP) Japan PM Suga: Any liquidation of Japan assets by South Korea would be ‘serious’

Korea

Kospi opened +0.1%
(KR) South Korea 120th Exports Y/Y 5.8 v +3.6% prior; Imports Y/Y: 2.8 v 6.8% prior; Chip exports 12.1% y/y

Other Asia

Mediatek [2454.TW]: Said to supply high performance computing chips (SerDes chips) to AMD Press
UMC [2303.TW]: Said to be raising wafer foundry manufacturing prices in Q1 by up to 10% Taiwan press

North America

(US) Sen Majority Leader McConnell (RKY): Republicans will consider a larger aid bill if a deal is reached between Speaker Pelosi and the White House; would bring it to a vote if the White House supports it; not expecting any Democratic support for Senate GOP’s $500B proposal; GOP proposal does not include stimulus checks
(US) Speaker of the House Pelosi: Talks with Treasury Sec Mnuchin have provided more clarity on stimulus
(US) White House Chief of Staff Meadows: Mnuchin and Pelosi made good progress in stimulus talks this afternoon; They were productive enough to talk again tomorrow afternoon; We still have a ways to go on a stimulus deal; Pelosi’s offer remains in the $2.22.4T range
(US) NY Fed Head of Markets Group Singh: In scenario of significant market stress, Fed could buy both bonds and ETFs; If market stress returns Fed would initially focus support on direct purchase of corporate bonds; Corporate bond purchases intended to avoid bankruptcies and layoffs
PNM Resources [PNM]: Avangrid (Iberdrola unit) said to be in talks to acquire PNM financial press

Europe

(UK) House of Lords condemns Govt Internal Market Bill
(UK) Chancellor of the Exchequer Sunak (Fin Min) said to have told PM Johnson to ditch his comprehensive review due to corona virusravaged public finances financial press

Levels as of 1:20 ET

Nikkei 225, +0.4%, ASX 200 +0.1% , Hang Seng +0.6%; Shanghai Composite 0.5% ; Kospi +0.2%
Equity S&P500 Futures: +0.6%; Nasdaq100 +0.5%, Dax +0.5%; FTSE100 +0.1%
EUR 1.18481.1821 ; JPY 105.52105.28 ; AUD 0.70830.7046 ;NZD 0.66130.6573
Gold +0.4% at $1,922/oz; Crude Oil 0.4% at $41.52/brl; Copper +0.8% at $3.1667/lb