General trend
- Hang Seng has remained modestly higher; China Merchants Bank is expected to report earnings.
- Shanghai Composite ended morning trading fractionally higher; Property index outperformed amid the Evergrande news.
- Nikkei has moved higher after the lower open; Tokyo Steel is due to report earnings.
- S&P ASX 200 has traded roughly flat.
- Chinese coal FUTs continue to drop amid comments from officials.
- Companies due to report during the NY morning include Autoliv, American Express, Cleveland-Cliffs, HCA, Honeywell, Regions Financial, Schlumberger, Seagate, VF Corp.
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened -0.1%.
- (AU) RBA OFFERS TO BUY A$1.0B IN GOVT SECURITIES IN UNSCHEDULED OPERATIONS (FIRST PURCHASE SINCE FEB TO DEFEND YIELD CURVE).
- (AU) Reserve Bank of Australia (RBA) Gov Lowe: Expanding foreign exchange objective would severely compromise other goals.
- (AU) AUSTRALIA OCT PRELIMINARY PMI MANUFACTURING: 57.3 V 56.8 PRIOR; PMI Services: 52.0 v 45.5 prior (1st expansion in 5 months).
- (NZ) New Zealand PM Ardern: Target for vaccinations is 90% before easing restrictions.
China/Hong Kong
- Hang Seng opened +0.4%, Shanghai Composite flat.
- Evergrande [3333.HK] *SAID TO HAVE PAID $83.5M IN INTEREST DUE ON SEPT 23RD; GRACE PERIOD WOULD HAVE ENDED ON OCT 23RD – China Securities Times.
- (CN) Mortgage rates in 20 cities in China have fallen in Oct [first decline in 2021] – China Press.
- (CN) Fitch Downgrades Sinic [property co.] to Restricted Default After Missed Payments; Withdraws Ratings.
- (CN) China PBOC Gov Yi Gang: Keeping normal monetary policy and retaining interest margin within reasonable range will help promote banks to better serve real economy [from Oct 21st].
- (US) Said that the US Is seeking a virtual summit between US President Biden and China President Xi in Nov – Press.
- (CN) China Commerce Ministry (MOFCOM) Reiterates China and US should work together to create conditions for implementation of the phase-1 trade agreement.
- Huawei: Said that the US Commerce Dept has issued >$100B in export licenses to Huawei and SMIC suppliers [issued between Nov 2020 and Apr 2021] – Press.
- (CN) China Ministry of Commerce (MOFCOM): Expects FDI to hit CNY1.0T in 2021.
- (CN) China State Planner (NDRC): Studying methods to keep Coal companies from seeking excessive profits.
- (CN) China State Planner (NDRC): To investigate coal production and distribution, as well as circulating costs and selling prices [from Oct 21st].
- (CN) China said to have suspended tax collection from Coal miners and Heating companies.
- (CN) China FX Regulator (SAFE): Market expectations are relatively stable and conducive to maintaining stable CNY; Breach of 6.4000 vs USD was normal.
- (CN) Hog farmers in China said to be using derivatives in order to hedge losses – China press.
- (CN) China Ministry of Finance (MOF): 9M Fiscal Rev +16.3% y/y; Expenditures 2.3% y/y.
- (CN) Beijing asks residents to avoid outbound trips that are unnecessary.
- (CN) China PBOC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v CNY100B prior; Net inject CNY90B v Net inject CNY90B prior.
- (CN) China PBOC sets Yuan reference rate: 6.4032 v 6.3890 prior.
Japan
- Nikkei 225 opened -0.5%.
- (JP) Bank of Japan (BOJ) said to be discussing phasing out of pandemic support [COVID loan program] if virus cases continue to decline; no decision is expected before Dec – Press.
- (JP) IMF Japan Mission Chief Salgado: Capital gains tax is an option for Japan.
- (JP) JAPAN SEPT NATIONAL CPI Y/Y: 0.2% V 0.2%E; CPI EX-FRESH FOOD (CORE) Y/Y: 0.1% V 0.1%E (First y/y increase since Mar 2020).
- (JP) *(JP) JAPAN OCT PRELIMINARY PMI MANUFACTURING: 53.0 V 51.5 PRIOR; PMI Services: 50.7 v 47.8 prior (1st expansion in 53 months).
Korea
- Kospi opened -0.1%
- (KR) South Korea Vice Fin Min Lee: Korea to temporarily cut fuel taxes, Tariff reduction on LNG imports; Will formally announces cuts next week.
North America
- (US) Fed’s Williams (FOMC voter): Longer run inflation expectations in line with 2.0% goal – Comments at China 40 Forum.
- (US) US President Biden: Thinks close to deal [referring to economic agenda]; does not expect broad corporate tax rate hike to be in [reconciliation] bill; Confirms minimum corporate tax proposal could help pay for the bill.; ability to use tax incentives on climate; Would consider getting rid of filibuster on debt limit.
- (US) Fed to limit active trading and have timelier reporting of trades for Fed officials.
- (US) SEMI Sept North America-based Manufacturers of Semi Equipment Billings: $3.72B, 1.7% m/m and 35.5% y/y (near record high set in July).
- Puerto Rico Senate President: Do not have votes to pass Debt Restructuring bond bill.
- AerCap [AER]: Announces pricing of $21B in bonds due 2023, 2024, 2026, 2028, 2032, 2033 and 2041 [9-tranche offering].
Europe
- (UK) Said that the UK may accept the role of the EU Court in North Ireland Protocol.
- (EU) European Commission to look into possible speculation into Carbon market.
- (UK) Oct GfK consumer Confidence: -17 v -16e.
- (IE) Ireland Oct Consumer Confidence Index: 86.8 v 86.4 prior.
- (NL) Netherlands Sept House Price Index M/M: 1.6% v 2.1% prior; Y/Y: 18.5% v 17.8% prior.
Levels as of 01:20 ET
- Nikkei 225, +0.4%, ASX 200 flat , Hang Seng +0.5%; Shanghai Composite +0.3% ; Kospi flat.
- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.5%, Dax +0.4%; FTSE100 +0.3%.
- EUR 1.1631-1.1621 ; JPY 114.20-113.81 ; AUD 0.7490-0.7452 ;NZD 0.7173-0.7145.
- Gold +0.3% at $1,787/oz; Crude Oil -0.3% at $82.27/brl; Copper +0.8% at $4.5920/lb.
