Asian Equities Trade Generally Lower After US Losses

General Trend

• Equity markets struggle to shake US sell off as US stimulus deal looks less hopeful before election and COVID cases continue to rise and countries continue to re-implement measures to control spread
• Asian travel-sensitive stocks trade generally lower, US airlines declined amid the recent focus on virus headlines
• Ant Financial priced its HK and Shanghai IPOs, seeking to raise over $34B in the dual IPOs (in line with prior speculation) ; HIBOR rates rise in HK
• Financial, Energy and Property firms are among the decliners in HK; Tech firms trade mixed
• Shanghai Composite declined by less than 0.5% during morning session, Kweichow Moutai extended drop after recently reported earnings; Property index drops over 1.5%
• Topix Air Transportation, Iron/Steel, Real Estate and Banks indices are among the decliners in Japan
• Canon Inc rises over 5% after reporting 9 month results, raised outlook; Noted factors including ‘strong’ Q3 sales of new mirrorless cameras and inkjet printers [that capture home demand]
• Japanese companies expected to report earnings include ANA Holdings, Fujitsu, Shin-Etsu Chemical
• Decliners in Australia include Energy, Resource and Consumer Discretionary cos.
• Kospi index outperformed ; Kia and Hyundai rise following their respective Q3 results; Samsung Display said to receive US license related to Huawei (press)
• US equity FUTs rise by less than 0.5% after over 1.5% losses on Monday
• South Korea exited technical recession during Q3, quarterly exports rose at the fastest q/q pace since 1986
• China’s industrial profit growth slowed in Sept; China cited factors including higher costs for companies and PPI deflation
• RBA Dep Gov said Q3 GDP likely expanded, declined comment on QE
• Australia Q3 CPI data is due on Wed (Oct 28th), y/y figure expected to remain below the RBA’s 2-3% target
• RBNZ Assist Gov Hawkesby is expected to speak on Wed (Oct 28th) at Retail Conference 2020
• China’s 5th plenary session is being held Oct 26-29th
• Companies expected to report earnings during the NY morning include Caterpillar, Cummins, Corning, Harley Davidson, JetBlue, Kroger, Lab Corp, Eli Lilly, 3M, Merck, Pfizer, Polaris Industries, Raytheon, Steven Madden, Sherwin-Williams, S&P Global, Stanley Black & Decker

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.7%
• Boral [BLD.AU] Reports Q1 (A$) EBIT -5% y/y; Rev -9% y/y; To sell 50% stake in USG Boral to Knauf for $1.02B
• (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$330M v NZ$220M prior in government bonds as part of QE v NZ$330M sought
• (AU) Reserve Bank of Australia (RBA) Dep Gov Debelle: Sub 6% unemployment goal is reasonable; GDP likely expanded in Q3; no comment on chance of QE at next week’s RBA meeting (Nov 3rd) – Senate Economics Legislation Committee

Japan

• Nikkei 225 opened -0.5%
• (JP) Japan Fin Min Aso: Hong Kong’s ability to function as a finance hub is eroding, must consider setting up a special zone for financial hub
• (JP) Japan Internal Affairs Min Takeda: Govt task it to create environment of competition between businesses especially in mobile cell phone market
• Nissan [7201.JP]:Plans to boost China output capacity by 30% in FY21 – Japanese press
• (JP) Japan MOF sells ¥3.0T v ¥3.0T indicated in 0.1% 2-year JGBs: avg yield: -0.1300% v -0.141% prior, bid to cover 3.98x v 4.02x prior

Korea

• Kospi opened -0.7%
• (KR) SOUTH KOREA Q3 PRELIMINARY GDP Q/Q: 1.9% V 1.3%E; Y/Y: -1.3% V -1.9%E
• (KR) South Korea Fin Min Hong: Q3 GDP data give hope for economic recovery
• (KR) South Korea Vice Fin Min Kim: Reiterates to closely monitor FX market and take measures if needed
• Samsung [005930.KR] Said that Samsung Display receives US Licenses to supply Huawei – Press

China/Hong Kong

• Hang Seng opened -0.3%; Shanghai Composite opened -0.3%
• Ant Financial [6688.HK]: Prices 1.67B A-share IPO at CNY68.8/shr, prices 1.67B H-share tranche [includes the international offer shares] at HK$80.00/shr, to trade under ticker 6688.HK in Hong Kong
• (CN) China ‘pauses’ new Chinext IPOs due to strong demand; CSRC said to be asking underwriters to hold applications for IPOs on Chinext – US financial press
• (HK) Hong Kong Chief Exec Lam: Will discuss economic policies with China next week during visit
• (CN) China Sept Industrial Profits Y/Y: 10.1% v 19.1% prior
• HSBC [5.HK] Reports Q3 adj Pretax $4.3B v $2.8Be, Rev $12.1B v $11.8Be; considering a “conservative dividend”
• (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v Injects CNY50B in 7-day reverse repos prior; Net inject CNY30B v Net inject CNY0B prior
• (CN) China said to be closer to legalizing Digital Yuan (CNY) and banning crypto currency competitors in a new draft law – SCMP
• (IR) US plans to sanction additional critical sectors in Iran; China firms (largest buyer of goods from Iran) to also be subject to the sanctions – US financial press
• (HK) Hong Kong Monetary Authority (HKMA) sells HK$30.0B to again defend peg as HKD currency trades at strong end of trading band
• (CN) China PBOC sets Yuan reference rate: 6.6989 v 6.6725 prior (weakest fix since Oct 19)

Other

• (TW) US govt approves possible $2.37B military arms sale to Taiwan
• (TW) Taiwan Lawmaker Wang: Imbalance in [Taiwan] Strait could lead to ‘war’; US arm sales help make attack on Taiwan too costly

North America

• Eli Lilly [LLY] Comments on ACTIV-3 Clinical trial: Says no more COVID-19 patients in hospitalized setting to get BAMLANIVIMAB; treatment unlikely to help hospitalized patients recover; all other studies related to the treatment remain ongoing
• Las Vegas Sands [LVS] Reportedly considering sale of its flagship casinos in Las Vegas, deal seen around $6.0B – press
• (US) Senate confirms Amy Coney Barrett to Supreme Court (as expected)

Europe

• (DE) Germany Chancellor Merkel reportedly plans to implement a ‘lockdown light’ program to tackle COVID issues; will discuss new measures on Weds; new plan to focus on restaurants and events – German press

Levels as of 1:20 ET

• Nikkei 225, -0.2%, ASX 200 -1.7% , Hang Seng -1%; Shanghai Composite -0.1% ; Kospi -0.5%
• Equity S&P500 Futures: +0.2%; Nasdaq100 +0.2%, Dax -0.1%; FTSE100 flat
• EUR 1.1827-1.1806 ; JPY 104.89-104.68 ; AUD 0.7138-0.7113 ;NZD 0.6694-0.6672
• Gold +0.3% at $1,910/oz; Crude Oil +0.6% at $38.79/brl; Copper flat at $3.0892/lb