Asia Summary
Asian equity markets opened generally higher, tracking the gains seen in the New York session.
Honda has gained over 1%, ahead of its earnings report which is expected later today. Nissan and Toyota are also trading higher. Electronic parts manufacturer Murata Manufacturing has declined by over 7%, after reducing its profit forecast. Australian building products manufacturer, CSR, has declined by over 5% after releasing its H1 results and guidance.
In the tech sector, Sony has gained over 9%, as the company reported better than expected Q2 results and raised its FY outlook. Shares of Softbank have rebounded by over 0.5%, after dropping over 4% during the prior session.
Chip equipment firm, Tokyo Electron has also gained over 9% after raising its FY forecast. In South Korea, Samsung Electronics is higher by over 3%. The company has added on to the gains seen in the prior session when it announced its financial results, shareholder return plan and management changes. Hynix has gained over 2%. During yesterday’s New York session, chipmaker Micron gained over 6% on above average volume.
Australian retailer Woolworth’s has risen by over 1%. During the prior session, the company’s shares rose by over 2% after it reported growth in its quarterly sales. Shares of Harvey Norman are higher by over 6% after Australia’s securities regulator (ASIC) said that it would not make any further inquiries related to the way the company consolidates its sales figures. Department store Myer Holdings has declined by more than 4%, after reporting a decline in Q1 sales and updating some of its medium-term targets.
Amid the gains being seen in oil prices, Australian energy producer Santos has risen by over 1%, while Woodside Petroleum is also trading higher. Oil Search has declined by over 2% after agreeing to pay $400M to acquire assets in Alaska’s North Slope.
In the steel sector, Kobe Steel has risen by over 3%. On yesterday’s session, the company’s shares gained over 3% amid the release of its most recent earnings report. Following the US equity close, shares of US Steel rose by over 7% on better than expected quarterly earnings.
Mega banks in Japan are generally higher with shares of Mitsubishi UFJ up over 0.7%. In Australia, the ‘big four’ banks are also trading generally higher. In China, insurers are trading higher, with shares of China Life up by over 2% and PICC Property P&C has gained over 6%. The Hang Seng Property Index has risen over 0.5%, as shares of Vanke are higher by more than 3%.
Hong Kong listed retailer Tapestry, formerly Coach, said it plans to withdraw its HK listing amid low trading volumes. Earlier in the week, miner Glencore made a similar announcement.
China’s Oct Caixin manufacturing PMI met market expectations and was unchanged from the prior figure.
Oct PMI data from Indonesia, Malaysia, Taiwan, Thailand, Vietnam and South Korea declined versus the prior month.
In South Korea, the Oct CPI and Trade Balance data also missed expectations. On yesterday’s session, Bank of Korea (BOK) Gov Lee said while Q3 GDP growth was ‘good’, he was still monitoring to see if growth continued for a rate hike.
In Japan, there has been renewed speculation in the press that PM Abe is expected to request an extra budget and that Kuroda is likely to be named to another term as governor of the Bank of Japan (BOJ).
USD/JPY has gained over 0.1%, ahead of the later today US Fed decision. The Kiwi has risen by over 0.7% after Q3 jobs data beat expectations.
Looking ahead, US House Tax Committee Chairman Brady said the text of the Republicans tax bill will be released on Thursday. He had previously said there was ‘no announcement of [a] change to Wed’s release for the tax bill.’
Japanese companies expected to report earnings later today include ANA Holdings, Hino Motors, IHI Corp, JFE Holdings, Japan Tobacco, KDDI, Mitsubishi Gas Chemical, Mitsui Chemicals, NSK, Rohm, Shinsei Bank, Takeda Pharmaceuticals, Ube Industries and Yamaha.
Key economic data
(NZ) NEW ZEALAND Q3 UNEMPLOYMENT RATE: 4.6% V 4.7%E, EMPLOYMENT CHANGE Q/Q: 2.2% V -0.2% PRIOR; Y/Y: 4.2% V 3.1% PRIOR
(KR) SOUTH KOREA OCT CPI M/M: -0.2% V 0.0%E; Y/Y: 1.8% V 1.9%E; CORE CPI Y/Y: 1.3% V 1.4%E
(KR) SOUTH KOREA OCT TRADE BALANCE: $7.3B V $8.7BE
(JP) JAPAN OCT FINAL PMI MANUFACTURING:52.8 V 52.5 PRELIM
(CN) CHINA OCT CAIXIN MAUFACTURING PMI: 51.0 V 51.0E (weakest pace since June, unchanged from prior)
Speakers and Press
Japan
(JP) BOJ Gov Kuroda being considered for another term – Japan press
(JP) BOJ Gov Kuroda: Reiterates that domestic economy is expanding moderately; downside risks to prices are larger – post rate decision press conference (yesterday)
(JP) Japan PM Abe expected to request extra budget at today’s cabinet meeting – Kyodo
(JP) Japan FIn Min Aso: Current economic trends aren’t ‘bad’
Korea
(KR) US said to pursue direct diplomacy with North Korea – financial press
(KR) South Korea President Moon seeking approval for 2018 budget – speaking at parliament
China/Hong Kong
(CN) PBOC Adviser: See conditions for additional FX reforms – Chinese press
US
(US) Follow Up: House GOP said to delay rolling out tax bill until Thursday – US financial press
Asian Equity Indices/Futures (00:00ET)
Nikkei +1.3%, Hang Seng +0.5%; Shanghai Composite +0.2%; ASX200 +0.5%, Kospi +1.1%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.7%; FTSE100 +0.2%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1655-1.1629; JPY 113.94-113.61; AUD 0.7669-0.7648;NZD 0.6914-0.6883
Dec Gold +0.0% at $1,270/oz; Dec Crude Oil +0.4% at $54.62/brl; Dec Copper +1.1% at $3.14/lb
(AU) Australia sells A$900M in 2.25% 2028 bonds; avg yield 2.7273%; bid-to-cover 5.3x
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6300 V 6.6487 PRIOR
(CN) PBoC OMO: Injects CNY240B combined in 7-day, 14-day and 63-day reverse repos v CNY300B prior; Net injection CNY0B v CNY80B prior
(CN) China MOF sells 1-year bonds at 3.54%, bid-to-cover 2.19x; Sells 10-year at 3.82%; bid-to-cover 4.16x
Equities notable movers
Australia/New Zealand
WLD.AU Reports first beef shipment to China after lifting of ban; +12.5%
Japan
6758.JP Reports H1 Net ¥211.7B v ¥26.0B y/y; Op ¥361.8B v ¥ 101.9B y/y; Rev ¥3.92T v ¥3.92T y/y; Raises FY17/18 guidance; +10%
2206.JP Reports H1 Net ¥11.4B v ¥11.6B y/y; Op ¥15.5B v ¥16.4B y/y; Rev ¥187.6B v ¥186.2B y/y; -10%
Korea
006400.KR Reports Q3 (KRW) Net 134.9B v -35.2B y/y, Op 60.2B v -110.4B y/y, Rev 1.71T v 1.63Te; +8%
