Asia Summary
Asian equity markets opened mixed, China electric vehicle names were higher on expected policy guidelines in October. Japan markets were notably weaker with more than 120 stocks on Nikkei225 and 1,100 on the Topix trading ex-dividend. Regional currencies weakened against the dollar, which extended gains to a 3rd day after Fed Chair Yellen boosted expectations for an interest rate increase in December. US financial press leaked what is said to be Trump’s tax framework, which will cap corporate tax rate at 20% (from 35%) and have a 35% individual tax rate that has option to go higher based on what Senate wants. PBOC skipped OMO with the onshore yuan strengthening for the first time in three sessions after PBOC set reference rate higher.
Key economic data
(NZ) New Zealand Q3 Employment Confidence Index: 113.8 v 113.4 prior (highest since 2008)
(CN) CHINA AUG INDUSTRIAL PROFITS Y/Y: 24.0% V 16.5% PRIOR
Speakers and Press
China/Hong Kong
(US) Commerce Sec Ross: US wants better physical access to China, China needs to respect IP rights
(CN) China NDRC fines 18 PVC companies for monopoly
(CN) Beijing city to release guidelines in Oct. on new-energy vehicle components, batteries and supporting facilities to boost development of the industry – Chinese press
(CN) China Beige Book International (CBB): economy may be faring well this year but 2018 is shaping up to be less positive, with progress on reducing debt and industrial capacity proving elusive
Korea
(US) Pres Trump: we are totally prepared for North Korea military option if we have to resort to that; the North Korean Leader is acting very badly – joint press conf with Spain PM Rajoy (US session)
(KR) US Treasury Dept announces new sanctions on North Korean banks and individuals
Japan
(JP) Nikkei225 more than 120 stocks will trad ex-dividend today and over 1,000 in Topix
New Zealand/Australia
(NZ) New Zealand First Party Leader Peters: Will wait until special votes are in on Oct 7th before deciding on what party to support, possible will talk to Labour Party or National Party before the 7th
(AU) Australia PM Turnbull: Gas industry executives have agreed to 2-yr supply deal for enough gas for Australia’s domestic market, govt won’t have to impose LNG export curbs for 2018 – Sky
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.4%, Hang Seng +0.5%; Shanghai Composite +0.0%, ASX200 -0.3%, Kospi -0.0%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.0%, FTSE100 -0.1%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1795-1.1776; JPY 112.54-112.23; AUD 0.7888-0.7871;NZD 0.7216-0.7187
Dec Gold -0.3% at $1,297/oz; Nov Crude Oil +0.5% at $52.13/brl; Dec Copper +0.4% at $2.93/lb
GLD SPDR Gold Trust ETF daily holdings +0.8% t0 862.6 metric tonnes
(AU) Australia buys back A$700M in March and Oct 2019 bonds; March weighted avg yield 1.8099%; Oct weighted avg yield 1.9464%
(AU) Australia sells A$700M in 2027 bonds, avg yield 2.7834%, bid to cover 4.34x
(CN) PBOC OMO: skips v injected CNY50B in 14 and 28-day reverse repo prior; drains net CNY40B v CNY80B prior
USD/CNY (CN) China PBOC sets yuan reference rate at 6.6192 v 6.6076 prior (2nd consecutive weaker setting, weakest since Aug 29th)
Equities notable movers
Australia/New Zealand
CDU.AU Enters into copper concentrate sales agreement with Mitsui; +7.4%
YAL.AU Exercises option to acquire Mitsubishi’s 28.9% stake in Warkworth for $230M; -4.5%
MYR.AU Said that major holder Solomon Lew hopes to either buy the company at an opportunistic price or that someone else will. – Australian; +2.8%
Singapore
MAND.SG Bids for Excelsior did not meet expectations, continues to review all options; -31.7%
Hong Kong/China
317.HK Strength attributed to parent China State Shipbuilding Corporation (600150.CN) suspended due to significant transaction/possible restructuring; +13.4%
US
BBD.CA US Commerce Dept applies duties of 220% as it says the company’s C-Series jets are subsidized
