Asia Summary
Asian equity markets have opened generally lower, after various indices moved to multi-year highs during the prior session. Markets are, however, off of their worst levels as of the time of writing.
Singapore Air’s shares have risen by over 2%, as the company reported an over 190% rise in Q2 profits.
South Korea’s Kospi has moved off of the worst levels for the session amid the comments by US President Trump before the country’s national assembly.
Samsung Electronics and Hynix have moved higher by over 1%. On Tuesday’s, session chipmaker Micron gained over 1.4%. In Hong Kong, shares of China Literature (eBook unit of Tencent), have risen by over 95% in their debut. Incidentally, shares of Tencent have rebounded after opening the session lower and are currently gaining for the 9th straight session.
The Hang Seng Consumer Goods index is higher by more than 0.7%, amid gains in automakers, including Geely Automobile, Brilliance China Auto and BYD.
Toyota Motor has traded higher by over 0.5%, following its most recent financial results and guidance. Mitsubishi Motors has declined by over 4% after reporting first half results. Nissan has declined by over 0.5% after reporting its results and revising its full year operating profit forecast.
In Australia, the ASX 200 Consumer Discretionary Index has declined by over 0.3%, while Japan’s Fast Retailing is also trading lower. The S&P 500 Consumer Discretionary sector declined by 0.6% on Tuesday’s session.
Commodity-related sectors have also moved lower following the gains seen in the prior session. The Hang Seng and ASX 200 Energy indices have moved somewhat lower, while the ASX 200 Resources index has declined by over 0.7%. On yesterday’s session, Comex Copper prices dropped by over 1.7%. Steelmakers in Japan are trading generally lower, with shares of Nippon Steel, JFE and Kobe Steel all lower by over 0.5%.
Japanese mega banks are also declining on the session. Mitsubishi UFJ is lower by over 0.9%. The ASX 200 Financials (ex-REIT) index has gained over 0.6% in Australia. Shares of Commonwealth Bank have gained more than 1.5% on better than expected Q1 earnings.
Some of the other interest rate sensitive sectors are also trading higher. The Australian REIT and Hang Seng Utilities indices have each gained over 0.5% on the session. The S&P 500 Utilities sector gained over 1% on yesterday’s session.
The Aussie has traded little changed, while China’s 10-year bond yields has risen by over 2bps. China’s Oct Trade Surplus missed market expectations as exports were below expectations, while imports were slightly higher
Japanese companies expected to report financial results later today include Japan Display, McDonald’s Japan, Mitsubishi Materials, Mixi, Nippon Paper, Olympus, Square Enix, Sumitomo Rubber, Toppan Printing, Tsumura, Universal Entertainment, Yamada Denki and Yomiuri Land
Key economic data
(AU) Australia Oct Foreign Reserves: A$78.1B v A$74.9B prior
(CN) CHINA OCT TRADE BALANCE (CNY) 254.5B V 280.5BE
(CN) CHINA OCT TRADE BALANCE: $38.2B V $39.1BE
Speakers and Press
Japan
(JP) Bank of Japan (BOJ) Member Funo: Vital to keep pushing strong monetary easing; CPI to rise to 2% target and help stabilize FX
(JP) Japan LDP Tax Chief: Not considering high tax on cigarettes
Korea
(KR) US President Trump calls on North Korea to "make a deal" on its nuclear weapons program – financial press
(KR) US President Trump: North Korea must be denied support, supply and acceptance – speech to Korea National Assembly
Australia/New Zealand
(AU) Australia debt management agency (AOFM) to resume RMBS auctions on Nov 23rd
(AU) Australia PM Turnbull one-seat lower house majority in jeopardy now that Liberal MP John Alexander may be a dual citizen – press (late yesterday)
China/Hong Kong
(CN) China National Development and Reform Commission (NDRC) draft proposal aims to amend its overseas investment regulations to cover a widely used method of securing loans to buy assets abroad
(CN) China Commerce Ministry: Sets 2018 non-state crude oil import quota at ~142.4M tons
Asian Equity Indices/Futures (23:00ET)
Nikkei -0.1%, Hang Seng +0.4%; Shanghai Composite +0.5%; ASX200 +0.1%, Kospi +0.4%
Equity Futures: S&P500 -0.2%; Nasdaq100 -0.0%, Dax -0.2%; FTSE100 +0.0%
FX ranges/Commodities/Fixed Income (23:00ET)
EUR 1.606-1.1586; JPY 114.02-113.64; AUD 0.7659-0.7640;NZD 0.6919-0.6897
Dec Gold +0.2% at $1,278/oz; Dec Crude Oil -0.3% at $57.01/brl; Dec Copper +0.1% at $3.09/lb
(AU) Australia sells A$1.5B v A$1.5B indicated in 2.25% Nov 2022 bonds; avg yield 2.1756%; bid-to-cover 4.51x
(CN) PBoC OMO: injects CNY160B v CNY180B prior in 7-day, 14-day and 63-day reverse repos; Net drain CNY40B v drain CNY80B prior
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6277 V 6.6216 PRIOR
JGB (JP) Japan MoF sells ¥1.874T in 6-month bills; avg yield -0.2376%; bid-to-cover 5.52x
(TH) Thailand sells THB15.4B in 49.6-yr Gov bonds, avg yield 3.4394%
Equities notable movers
Australia/New Zealand
AAD.AU Guides Trading broadly in line with expectations for FY18 Core EBITDA; CEO Simon Kelly resigns, CFO Geoff Richardson appointed interim CEO; -3.5%
JHX.AU To acquire XI (DL) Holdings GmbH for €437M cash from Xella International; -2.4%
Japan
6448.JP Reports Q2 Net ¥22.7B v ¥26.9B y/y; Op ¥31.3B v ¥36.2B y/y; Rev ¥346B v ¥310B y/y; +10%
2531.JP Reports H1 Op ¥6.1B, +17.7% y/y, to cancel 7.35% of shares on Dec 29th; to sell Cho Un unit to Aspirant Group; to buyback 0.99% of shares for ¥2B; +9%
7201.JP Reports H1 Net ¥276.5B v ¥282.4B y/y; Op ¥281.8B v ¥339.7B y/y; Rev ¥5.65T v ¥5.32T y/y; -1.3%
Hong Kong
772.HK Tencent unit China Literature set to open at HK$90/shr v HK$55/shr IPO price; +15.4%
