Asia Summary
Asian equity markets opened mixed again before turning positive, the Nikkei 225 is heading for its highest close since December 1996, thought the yen remained slightly weaker; the upward trend in equities being attributed to more solid economic and market conditions. Uncertainty around the upcoming Japan election and the ramifications of BOJ Gov Kuroda losing his position if PM Abe is not re-elected have started to circulate in the press. Currencies on the whole were little changed in the session, with little economic data to give direction.
China MOF to offer $2B in 5 and 10-year sovereign bonds in Hong Kong, this is the 1st dollar bond offering since 2004, and will compromise of $1B in 5-year bonds and $1B in 10-year bonds. There is speculation that the bonds could be sold at the end of October. The offshore yuan fell for the first time in four sessions amid speculation that traders are squaring up positions amid recent performance and ahead of China’s 19th congress next week. China property names fell after a press report citing China National Development and Reform Commission (NDRC) official that China was developing property measures that would have long lasting effects.
Key economic data
(AU) Australia Sept Westpac Consumer Conf Index: 101.4 v 97.9 prior; m/m: 3.6% v 2.5% prior
(JP) JAPAN AUG CORE MACHINE ORDERS M/M: 3.4% V 1.0%E; Y/Y: 4.4% V 0.7%E
Speakers and Press
China/Hong Kong
(HK) Hong Kong Chief Exec Lam: Sees 2017 GDP higher than 3.5%
(CN) China National Development and Reform Commission (NDRC) deputy chief Ning Jizhe: China is formulating a set of property control measures that will have long-lasting effects, and will unveil the measures at an appropriate time – Xinhua
Japan
(JP) Financial press comments on future of BOJ Gov Kuroda may depend on PM Abe’s re-election
US
(US) Fed’s Kaplan (moderate, voter): will be assessing the progress of the US economy toward full employment and looking for more signs of upward inflation as while weighing potential interest-rate hikes
Asian Equity Indices/Futures (00:00ET)
Nikkei +0.3%, Hang Seng -0.0%; Shanghai Composite +0.3%; ASX200 +0.6%, Kospi +0.8%
Equity Futures: S&P500 +0.0%; Nasdaq100 +0.1%, Dax +0.0%; FTSE100 +0.0%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1828-1.1795; JPY 112.58-112.22; AUD 0.7809-0.7777;NZD 0.7098-0.7069
Dec Gold -0.3% at $1,289/oz; Nov Crude Oil +0.3% at $51.09/brl; Dec Copper -0.1% at $3.06/lb
(AU) Australia buys backs A$900M v A$900M indicated in 2018 (avg yield 1.7925%) and 2019 bonds (avg yield 1.9492%)
(AU) Australia sells A$3.5B (record amount) v A$3.5B indicated in Nov 2022 bonds, bid to cover 3.68x, avg yield 2.4167%
(CN) China MOF to offer $2B in 5 and 10-year sovereign bonds in Hong Kong
USD/CNY (CN) China PBOC sets yuan reference rate at 6.5841 v 6.6273 prior
(CN) China PBOC injects CNY20B v CNY40B in 7-day reverse repos prior, injections match maturities for 2nd consecutive day
(KR) Bank of Korea (BOK) sells KRW2.77T v KRW2.8T indicated in 2-yr monetary stabilization bonds; avg yield 1.85% v 1.73% prior
(CN) China MOF sells 1-yr and 10-yr bonds
(JP) Japan MoF sells ¥643B v ¥800B indicated in 0.80% (0.8% prior) 30-yr bonds; Avg yield: 0.8810% v 0.8320% prior; Bid to cover: 3.98x v 3.67x prior
Equities notable movers
Australia/New Zealand
LHC.AU Acquires rights to promote spinal allograft biologics range from Australian Biotechnologies for A$3.3M; +5.5%
PEB.NZ Announces NZ$21.3M capital raise through a fully underwritten 1 for 6 pro-rata Rights Offer; -16.5%
Japan
5406.JP Follow Up: Says reports about iron powder data are ‘true’; founder falsified information for 1 product, no safety issues; -16%
8136.JP Cuts FY17/18 guidance Net ¥4.8B from ¥7.6B; Op ¥6.3B from ¥10.8B; Rev ¥60.3B from ¥65.7B; cuts dividend to ¥55 from ¥80; -9.3%
Korea
069620.KR To expand production of botulinum toxin, named “Nabota”, at new plant in Hwaseong city, South Korea following govt approval; +12%
China/Hong Kong
2333.HK Reports Sept sales 102K units, +4.5% y/y; production 97.8K units, +0.2% y/y; +15%
