Fundamental Analysis

Market Update - Asian Session: UN Security Council Passes N. Korea Sanctions

Typography

Asia Summary

Asian equity markets opened higher tracking the strength in the US session. Where the USD continued its relief rally after north Korea failed to launch as missile over the weekend and Hurricane Irma impact was less than expected in the US. Some analysts have also pointed towards increasingly stronger China data and rising inflation as another trigger to spur the buying along. The PBOC weakened the yuan reference rate by 0.4% to 6.5277, the first time in 12 sessions. Offshore yuan fell to a 6-month low on the weaker setting. PBOC did again skip open market operations for the 4th consecutive session, has not happened since early January.

The UN Security Council voted unanimously to implement stronger sanctions against North Korea. New measures will ban all textile exports, however are softer than US’s initial proposal. USD/KRW was little changed in the session and North Korea failed to comment. In the UK Lawmakers voted against opposition labor party attempt to block EU withdrawal bill; vote 326-290, Brexit bill to move to next stage. The Sterling showed muted gains on the news.

Key economic data

(AU) AUSTRALIA AUG NAB BUSINESS CONFIDENCE: 5 V 12 PRIOR; CONDITIONS: 15 V 14 PRIOR (highest level since early 2008)

(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 109.8 v 114.1 prior

(PH) Philippines Jul Trade Balance: -$1.65B v -$2.4Be

(KR) South Korea Jul M2 Money Supply M/M: -0.2% v 0.4% prior; L Money Supply M/M: 0.9% v 0.3% prior

Speakers and Press

China/Hong Kong

(CN) PBoC Vice Gov Yin Yong: financial risks are on the rise while anti money-laundering efforts face challenges

(HK) Hong Kong Financial Sec Chan: HK's economy has been "very positive" in recent two months after better-than-expected growth in Q2

(CN) China Premier Li: China is resolute about opening up; Reiterates to continue proactive Fiscal policy and prudent monetary policy - press

Korea

(KR) UN SECURITY COUNCIL VOTES IN FAVOR OF INCREASING SANCTIONS AGAINST NORTH KOREA

(KR) South Korea: N. Korea is technically ready for a nuclear test

(US) US launches missile tracking plane from Kadena airbase - Japan press

Japan

(JP) Japan PM Abe Cabinet approval rating rises to 50%, up 8 pct points in poll taken Sept 8-10 – Yomiuri

Other

(UK) Lawmakers votes against opposition labor party attempt to block EU withdrawal bill; vote 326-290, Brexit bill to move to next stage

(US) US Senate Majority Leader McConnell said the debt limit will not have to be increased until 'well into 2018' 'amid the availability of extraordinary measures' - NYT Interview

Asian Equity Indices/Futures (00:00ET)

Nikkei 1.0%, Hang Seng 0.0%; Shanghai Composite +0.1%, ASX200 +0.7%, Kospi +0.1%

Equity Futures: S&P500 -0.0%; Nasdaq100 +0.0%, Dax -0.1%, FTSE100 -0.1%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.1964-1.1946; JPY 109.58-109.24; AUD 0.8034-0.7998; NZD 0.7267-0.7226

Dec Gold -0.4% at $1,329/oz; Oct Crude Oil -0.1% at $48.02/brl; Sept Copper -0.6% at $3.05/lb

GLD SPDR Gold Trust ETF daily holdings +0.1% to 835.7 metric tonnes

(AU) Australia sells A$150M 2022 Indexed Bonds; avg yield 0.4025%; bid-to-cover 3.98x

(CN) PBOC SKIPS OPEN MARKET OPERATIONS (OMO) V SKIPPED PRIOR (4th consecutive skip, most since early Jan)

USD/CNY (CN) PBOC SETS YUAN REFERENCE RATE AT: 6.5277 V 6.4997 PRIOR (1st weaker setting in 12 sessions)

JGB (JP) Japan MoF sells ¥1.78T in 5-yr JGBS; avg yield -0.110%; bid-to-cover 4.07x

Equities notable movers

Australia/New Zealand

SGH.AU nnounces cost cutting measures, to cut 7% of employees in Australia; +3%

RAP.AU Developing the world’s first clinically-tested, regulatory-cleared respiratory disease diagnostic test and management tools for smartphones - Investor presentation; +16%

Hong Kong/China

1222.HK To sell 60% stake in site in Hong Kong for HK$2.44B; +4.3%

Japan

6502.JP Toshiba reportedly to sell chip unit to Western Digital-led consortium - Japanese press; +0.3%

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