General trend
- Better US retail sales were a focal point during NY session.
- Hang Seng has rebounded from the opening decline [TECH index rises; Financials trade generally lower amid drop in Ping An Insurance; Property names trade mixed, Evergrande extends decline].
- Shanghai Composite ended morning trading -0.6% [Industrials index lags; Consumer Staples index rises].
- Nikkei has remained modestly higher [Topix Marine Transportation index rises after guidance from Maersk].
- S&P ASX 200 has lagged [Resources index declines; China ore FUTs drop over 5%; Broker downgrade weighs on Fortescue].
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat.
- (AU) Australia sells A$1.5B v A$1.5B indicated in 4.50% Apr 2033 bonds, avg yield 1.3394%, bid to cover 3.88x.
- (AU) Australia seeking WTO China wine duties dispute settlement panel.
- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$362.6B v A$360.2B prior.
- (NZ) Reserve Bank of New Zealand (RBNZ) to publish Assistant Gov Hawkesby speech on Sept 21st on ‘Least Regrets’ Policy [**Reminder: Aug 18th RBNZ Monetary Policy Statement said: The Committee agreed that their least regrets policy stance is to further reduce the level of monetary stimulus so as to anchor inflation expectations and continue to contribute to maximum sustainable employment.].
- (NZ) New Zealand Aug Manufacturing PMI: 40.1 v 62.2 prior (1st contraction in 8 months); Manufacturing sector returned to contraction on the back of another nationwide lockdown; any moves towards the sector getting back into expansion will ultimately depend on how soon Auckland can also return to lower alert levels.
- (NZ) New Zealand Fin Min Robertson: Extended Trans-Tasman travel bubble pause for 8 weeks.
China/Hong Kong
- Hang Seng opened -0.3%, Shanghai Composite -0.3%.
- (CN) China PBOC Open Market Operation (OMO): Injects CNY50B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Sells CNY50B in 14-day reverse repos v CNY0B prior; Net inject CNY90B v Net CNY0B prior; Injects CNY50B v CNY0B prior in 14-day reverse reports at 2.35% v 2.35% prior [first 14-day operation since Feb 5th].
- (CN) PBOC: The purpose of today’s operation is to keep liquidity stable at quarter-end.
- (CN) China Commerce Ministry (MOFCOM): Economic teams from both US-China have maintained communications; US and China trade teams are in normal contact; Will work to implement agreements between Xi and Biden.
- (CN) China said to extend tariff exemption on some 81 US goods till Apr 16th, 2022 – press.
- (CN) China Aug Foreign Direct Investment (FDI) YTD Y/Y: 22.3% v 25.5% prior.
- (CN) China submits application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – press.
- (CN) China PBoC and Russia Central Bank said to be discussing deepening of bank cooperation – financial press.
- (CN) US and Australia Joint Statement: Countries share concern on China claims in South China Sea, Will strengthen ties with Taiwan.
- (CN) China is resolved to stabilize coal prices – Economic Daily.
- (CN) China Vice Premier Liu He: China to boost EVs consumption.
- CN) China Vice Transport Minister Wang: China to cover 80% of all highways with Electric Vehicle (EV) Charging by 2025.
- (CN) Said that Vaccine producers in China have begun to offer booster shots beginning this month, will start vaccinating certain groups through Nov – Press.
- (CN) China PBOC sets Yuan reference rate: 6.4527 v 6.4330 prior.
- (CN) China Trade-Weighted CFETS Yuan Basket Index hits the highest since Mar 2016 – financial press.
- (CN) China Ministry of Finance (MOF) sells 3-month bills and 30-year bonds.
- (HK) China PBOC to sell CNY5B in 6-month bills in Hong Kong on Sept 24th (Friday).
- (CN) Wanjia Enhanced Income Bond Fund [161911.CN] said to halt trading in Shenzhen – US financial press.
- Fantasia Holdings [property co., 1777.HK]: Fitch downgrades rating to B from B+; Outlook Negative.
- (HK) Hearing various HK property names have been downgraded by US broker (including Times China and China Aoyuan).
Japan
- Nikkei 225 opened +0.2%.
- (JP) BOJ: Japan End Jun (Q2) Household Assets: ¥1,992T, +6.3% y/y; BoJ holdings of JGBs: 44.1% v 44.5% prior – Quarterly Flow of Funds Report.
- (JP) Candidates Kono, Kishida, Noda, and Takaichi have registered for LDP leadership race [in line].
- (JP) Japan LDP Leadership Candidate Takaichi: Nuclear power is needed to reach 0 carbon goal – Press.
- (JP) Japan said to have decided to offer a 3rd coronavirus shot (booster) – Press.
- (JP) Japan Econ Min Nishimura: Need to determine if China meets standards to enter CPTPP.
Korea
- Kospi opened -0.1%.
- (KR) Said that North Korea may be expanding capacity for nuclear weapons at uranium plant – Press.
Other Asia
- (SG) SINGAPORE AUG NON-OIL DOMESTIC EXPORTS M/M: -3.6% V +2.4%E; Y/Y: 2.7% V 8.5%E; NODX to China and the EU 27 declined.
North America
- (US) AUG ADVANCE RETAIL SALES M/M: +0.7% V -0.7%E; RETAIL SALES (EX-AUTO) M/M: 1.8% V 0.0%E.
- (US) President Biden spoke with House Speaker Pelosi (D) and Senate Maj Leader Schumer (D): Agreed need to repeal Trump era tax cuts – US financial press.
- (US) Said that Senator Manchin (D-WV) has not been persuaded to vote for $3.5T infrastructure bill [in line] – Press.
- (BR) Brazil said to consider raising the IOF (financial transaction) tax to fund Auxilio Brasil (new social program) – Local press.
Europe
- (EU) ECB notes FT story of potential rate increase is not accurate; Conclusion on rates is not consistent with forward guidance.
- (EU) Reportedly unpublished ECB inflation estimate raises chance of a rate rise in just over 2-years; Expects to hit 2% inflation target by 2025 – Financial Times.
- (UK) Netherlands PM Rutte will reportedly invite the UK to join the [defense] deal with the EU – UK’s Times.
- (UK) Chancellor Rishi Sunak is planning to use next month’s Budget to set out new rules to reign in government borrowing – FT.
- (EU) EU Commission said to renew a series of anti-dumping duties on Chinese and Taiwanese exporters of flat rolled stainless steel products.
- Invesco [IVZ.UK]: Invesco reportedly in discussions to merge with State Street’s asset management division – press.
- Maersk [MAERSKB.DK]: Guides Q3 adj EBIT close to $6.0B, adj EBITDA close to $7B v $2.3B y/y; Raises FY21 outlook.
Levels as of 01:20 ET
- Nikkei 225,+0.6 %, ASX 200 -0.8% , Hang Seng +0.7%; Shanghai Composite -0.6% ; Kospi +0.3%.
- Equity S&P500 Futures: +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 flat.
- EUR 1.1773-1.1758; JPY 109.91-109.66 ; AUD 0.7302-0.7280 ;NZD 0.7083-0.7059.
- Gold +0.2% at $1,759/oz; Crude Oil -0.2% at $72.47/brl; Copper +0.5% at $4.3055/lb.
