China Markets Lag After Hotter Inflation Data

General trend

• US equity FUTs have remained modestly lower; On Tues the S&P 500 snapped its 8-day winning streak.
• Nikkei 225 has also remained modestly lower.
• Japanese cos. due to report results include; Nissan Motor rises after earnings/guidance; Softbank Group drops after prior gain.
• Shanghai Composite extended declines following the release of the Oct inflation data; Consumer and Industrial indices lagged.
• Hang Seng has also continued to decline; Property developer Fantasia drops by over 45% after returning from extended trading halt; Evergrande New Energy Vehicle announced stock placement.
• China Evergrande has another payment deadline today, though they are thought to have put together enough cash to avoid default.
• Tencent is due to report earnings after the market close.
• S&P ASX 200 has reversed gain [Resources index declines].
• Has China’s PPI peaked?.
• China MOF is due to price EUR-denominated bonds.
• Australia Oct Labor market data is due on Thursday (Nov 11th).
• Taiwan Semi may release Oct sales later today.
• Companies due to report during the NY morning include Adient, AerCap, Arcos Dorados, Ardmore Shipping, Energizer, National Vision Holdings, Fiverr, Mogo, Navios Maritime Partners, Perrigo, Royalty Pharma, Carrols Restaurant, Wendy’s, Wolverine World Wide.

Headlines/Economic data

Australia/New Zealand

• ASX 200 opened -0.0%.
• (AU) Australia Total Weekly Payroll Jobs change Oct 16th: +1.3% v -0.7% prior; Wages Paid -0.9% v +1.8% prior.
• (NZ) New Zealand Oct Preliminary Activity Outlook: 15.6 v 21.1 prior; Business Confidence: -18.1 v -13.4 prior; Inflation expectation 4.33% v 3.45% prior.
• (AU) Australia sells A$1.0B v A$1.0B indicated in 1.50% Jun 2031 bonds, Avg Yield 1.7001% v 1.3348% prior, bid to cover 2.60x v 4.36x prior.

Japan

• Nikkei 225 opened -0.3%.
• (JP) Japan PM Suzuki: Still considering weather to means test cash handouts for those under 18.
• 7201.JP Reports H1 Net +¥54.1B v -¥16.7Be, Op +¥63.5B v -¥1.7Be; Rev ¥3.95T v ¥3.09T y/y; Cuts FY21 Rev outlook on lower deliveries. but raises profit outlook; Raises FY21/22 outlook (yesterday after the close).

Korea

• Kospi opened -0.5%.
• (KR) South Korea Oct Unemployment: 3.2% v 3.1%e (8th consecutive month of job additions, higher rate attributed to more people entering job seeking market).
• (KR) Bank of Korea (BOK) Sells KRW1.27T v 700B indicated in 1-year Monetary Stabilization Bonds (MSB): avg yield 1.32% v 1.20% prior.

China/Hong Kong

• Hang Seng opened -0.1%; Shanghai Composite opened -0.2%.
• (CN) CHINA OCT CPI M/M: +0.7% V 0.7%E; Y/Y: 1.5% V 1.4%E [fastest annual pace since Sept 2020]; PPI Y/Y: 13.5% v 12.3%e.
• (CN) China Embassy in the US: China President Xi said China stands ready to work with US on regional and international issues and properly manage issues.
• (CN) Land purchases by China developers have slowed – China Securities Journal.
• (CN) China PBoC Gov Yi Gang: Will test the eCNY’s impact on monetary policy and financial market.
• (CN) China President Xi and US President Biden to have virtual summit next week (no details given).
• (CN) Reportedly China regulators may ease rules for developers to issue bonds in effort to prevent deterioration in developers’ finance – press.
• (CN) China PBOC sets Yuan reference rate: 6.3948 v 6.3903 prior.
• (CN) China PBOC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v CNY100B prior; Net inject CNY50B v Net inject CNY90B prior.

North America

• RIVN Prices upsized 153M share IPO (prior 135M) at $78/shr v $72-74/shr range indicated.
• (US) Weekly API Crude Oil Inventories: -2.5M v +3.6M prior.
• (US) Treasury Sec Yellen: Build Back Better plan is anti inflation medium term; Inflation to be watched carefully, the fed is taking care of that; reiterates recession could happen if we don’t raise debt limit(US) Treasury Sec Yellen: Build Back Better plan is anti inflation medium term; Inflation to be watched carefully, the fed is taking care of that; reiterates recession could happen if we don’t raise debt limit.

Europe

• (EU) ECB’s Schnabel (Germany): Central banks must pay more attention to house prices (US session).

Levels as of 00:15ET

• Hang Seng -1.2%; Shanghai Composite -1.3%; Kospi -1.0%; Nikkei225 -0.5%; ASX 200 -0.1%.
• Equity Futures: S&P500 -0.4%; Nasdaq100 -0.3%, Dax -0.3%; FTSE100 -0.2%.
• EUR 1.1596-1.1581; JPY 112.96-112.78; AUD 0.7381-0.7362; NZD 0.7133-0.7103.
• Commodity Futures: Gold -0.1% at $1,828/oz; Crude Oil +0.0% at $84.17/brl; Copper -0.6% at $4.34/lb.