Equity Markets Extend Gains

Aug 24 21, 06:12 GMT

General trend

Australian government bond yields rise; AOFM priced indexed bond syndicate.
Generally quiet session for the FX majors.
Spot iron ore prices continue to rise as China curbs steel manufacturing in order to help ease pressure on input costs (steel mills were told not to exceed 2020 levels in July).
Asian airlines stronger on the news that Pfizer-BioNTech COVID vaccine got FDA approval.
Financials generally lag.
Hang Seng has remained higher [TECH index rises over 4%, JD.com rises following earnings; Gaming sector tracks earlier rise on Wall St; Financials trade mixed].
Shanghai Composite rose by 1% during morning session [Consumer Staples index outperforms as liquor firms rise; Financials lag].
Nikkei 225 has extended gain [Topix Transport, Electric Appliances and Steel indices rise over 2%; Banks lag].
S&P ASX 200 has moved higher, but underperformed [Energy and Resources indices rise; Financials lag; Wesfarmers’ ex-dividend weighs on Consumer Discretionary index; Health Care index drops following results from Ansell].

Headlines/Economic data

Australia/New Zealand

ASX 200 opened 0.0%.
(NZ) New Zealand Q2 Retail Sales (ex-inflation) Q/Q: 3.3% v 2.5%e.
BLD.AU Reports FY21 (A$) Net +639.9M v -1.14B y/y; adj EBITDA 882M v 825M y/y; Rev 5.35B v 5.73B y/y.
AWC.AU Reports H1 Adj Net $69.2M v $85.7M y/y, Rev $2.38B v $2.15B y/y.
ASB.AU Reports FY21 (A$) Net 81.1M v 89.0M y/y; Rev 1.57B v 2.1B y/y.
MND.AU Reports FY21 (A$) Net 47.1M v 36.5M y/y; EBITDA 108.7M v 92.1M y/y; Rev 1.95B v 1.67B y/y.
(NZ) New Zealand reports 41 additional coronavirus cases, total cases reach 148.

Japan

Nikkei 225 opened +0.6%.
4004.JP Announces ¥109B share sale in domestic and overseas sale, to fund purchases of chip materials (yesterday after the close).
(JP) Japan PM Suga and LDP Official Nikai said to be meeting on Aug 25th to discuss elections – Press.
(JP) Japan MoF sells ¥2.5T v ¥2.5T indicated in 0.005% (prior 0.000%) 5-year JGBs; avg yield -0.1200% v -0.1150% prior, bid to cover 3.76x v 3.53x prior.

Korea

Kospi opened +1.0%.
(KR) South Korea Aug Consumer Confidence: 102.5 v 103.2 prior (second consecutive decline).
(KR) Speculation South Korea 2022 Budget may exceed KRW604.7T – Yonhap.

China/Hong Kong

Hang Seng opened +1.3%; Shanghai Composite opened +0.2%.
JD Reports Q2 $0.45 v $0.41e, Rev $39.3B v $38.3Be (US morning).
(CN) China economy likely to recover in H1 after slowdown in July – Economic Daily.
(CN) Meeting between China President Xi and US President Biden on sidelines of Italy G20 this fall looking less likely, due to virtual attendance looking more likely due to COVID – SCMP.
(CN) China PBOC sets Yuan reference rate: 6.4805 v 6.4969 prior.
(CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net CNY0B prior.
(HK) Macau to accept negative COVID tests that have been taken within 7 days of entering (update).

Other

(MY) Analysts expect chip shortage in auto industry to get worse as COVID continues to go unchecked in Malaysia, forcing factories of STMicoelectronics and Infineon to close – press.

North America

(CN) US SEC has given new disclosure requirements to Chinese companies looking to list in the US – press.
IFF Lanxess signs contract to acquire microbial control business from Iff; enterprise value $1.3B.
(US) SEMI July North America-based Manufacturers of Semi Equipment Billings: $3.86B, +4.5% m/m and +49.8% y/y.
NXPI Samsung said to be considering a bid but worried that regulatory issues will take the price even higher than the current leading bid of $68B, not given up on the idea all together; Texas Instruments also said to be interesting to Samsung – press.
(US) VP Harris: China continues to “coerce, intimidate” in the South China Sea; China’s actions undermine the rules based on order and sovereignty of nations; Indo-Pacific is a top priority for US – speech notes for Singapore.
(US) Energy Dept to auction 20M barrels of crude from Strategic Petroleum Reserve, since it is holding its largest reserve in 7-years – press.

Levels as of 01:15ET

Hang Seng +1.6%; Shanghai Composite +1.1%; Kospi +1.1%; Nikkei225 +1.0%; ASX 200 +0.2%.
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.1%, Dax +0.2%; FTSE100 +0.2%.
EUR 1.1749-1.1734; JPY 109.80-109.64 ;AUD 0.7225-0.7200; NZD 0.6909-0.6878.
Commodity Futures: Gold -0.1% at $1,804/oz; Crude Oil +0.3% at $65.83/brl; Copper +0.1% at $4.23/lb.