Asia Summary
Following the declines seen in US equity markets on Friday’s session, Asian bourses have opened mixed.
In South Korea, cosmetics companies (including Amorepacific, LG Household and Cosmax) have traded higher, as companies release their sales figures from China’s ‘Singles Day.’ Alibaba reported that its gross merchandise value related to the annual shopping festival rose by 39% y/y to $25.3B. Japan’s Fast Retailing has declined by more than 1.5%.
Steelmakers in Japan are also trading lower, with shares of Nippon Steel down by over 2%. In Australia, the ASX 200 Resources Index has risen by over 0.5%, after declining by 1.6% on Friday’s session. At the same time, the Hang Seng Materials index has declined by more than 0.7%. Shares of Aluminum Corp of China have declined by more than 1.4%, while Rusal has moved lower by over 1% following the release of its earnings report .
Property developer, Country Garden, has gained over 7% in Hong Kong, as the company is due to be added to the Hang Seng index. Sunny Optical Technology, which is also due to be added to the index, has traded higher by more than 4%. Meanwhile, shares of Cathay Pacific and Kunlun Energy are trading lower by over 1% and 2.5% respectively, as both firms are due to be removed from the Hang Sang index.
At the same time, the Hang Seng Information Technology index has rallied by more than 1%. Shares of PC gaming firm Razer have moved higher by over 40% in their trading debut. Japanese online gaming firm Nexon has gained over 7%, following the release of its earnings report and guidance.
Amid today’s decline being seen in Japanese equity markets, the Topix Securities broker index has lost over 1%. Mega banks are also trading slightly lower, ahead of Mizuho Financial’s earnings release, which is expected later today. The Hang Seng Financials index has risen by more than 0.5%, amid the gains being seen in China’s bond yields.
China’s 10-year bond yield has risen to highs not seen since 2014. While today’s session, has been fairly light in terms of macro-economic data, various data points are due to be released by China’s on Tuesday’s session including, October Retail Sales, Industrial Production at Fixed Assets Investment.
In the currency markets, the US dollar is trading generally firmer. Data releases for the US include, Oct CPI and Retail Sales, which are both expected on Wednesday
GBP/USD has declined by over 0.5%. Forty UK MPs are said to have agreed to sign a letter of no confidence in PM May, according to a UK press report. Forty eight signatures are required to force a leader ship vote. The most recent report on PM May, followed prior reports that there were over two dozen parliament members that were said to be prepared to call for her to resign.
In Australia, the Q3 wage price index is due to be released on Wednesday, while the Oct Employment Change is expected to be released on Thursday.
In Japan, preliminary Q3 GDP data is due to be released on Wed.
Japanese companies expected to report earnings today include Aeon Financial Service, Aozora Bank, Ebara Corp, Funai Electric, Fukuoka Financial, Fukushima Industries, Hamamatsu Photonics KK, Hirata, Hokuetsu Paper, Hokuhoku Financial, J Trust, Kenedix, Kinetsu Corp, Juroku Bank, Konoike Transport, Mizuho Financial, Noritz Corp, Rakuten, Sawai Pharmaceuticals, Senshu Ikeda Holdings, Sumitomo Bakelite, T&D Holdings, THK, TPR, Taikisha, Takasago Thermal Eng, Temp Holdings, Toridoll Company and Towa Pharmaceuticals.
Key economic data
(KR) SOUTH KOREA OCT EXPORT PRICE INDEX M/M: 0.5% V 1.1% PRIOR; Y/Y: 8.0% V 11.2% PRIOR; Import Price Index M/M: 0.6% v 1.8% prior; Y/Y: 6.8% v 10.8% prior
(JP) JAPAN OCT PPI (CGPI) M/M: 0.3% V 0.1%E; Y/Y: 3.4% V 3.1%E
Speakers and Press
Japan
(JP) Follow Up: TPP members made significant progress toward reaching a major trade pact (without the US) but disagreements from Canada prevented a final deal – press
(JP) Ministerial meeting of Regional Comprehensive Economic Partnership (RCEP) member states concluded that negotiations will continue into 2018 rather than reaching an agreement this year – Nikkei
Korea
(KR) South Korea Foreign Min Kang: North Korea needs to show signs of change before any talks
Philippines
(PH) Philippines Central Bank (BSP) Gov Espenilla: Policy makers are considering slowly cutting banks’ reserve requirements
China/Hong Kong
(CN) President Trump: Expressed strong desire to conduct trade on a fair basis; will make bilateral trade deals with any APEC nation (Friday)
Australia/New Zealand
(AU) RBA Assist Gov Debelle: now appears that there has been a solid upward trajectory in non-mining business investment over the past couple of years
Outside Asia
(UK) 40 MPs have agreed to sign a letter of no confidence in PM May, short of number required to force leadership vote (48 required) – UK press
(US) Fed’s Harker (voter, hawk): Lightly penciled in Dec rate hike; Inflation weakness has been puzzling
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.5%, Hang Seng +0.3%; Shanghai Composite +0.3%; ASX200 -0.3%, Kospi -0.5%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 +0.3%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1668-1.1645; JPY 113.71-113.47; AUD 0.7664-0.7642;NZD 0.6936-0.6916
Dec Gold +0.1% at $1,275/oz; Nov Crude Oil +0.1% at $56.77/brl; Dec Copper +0.4% at $3.09/lb
USD/CNY (CN) PBOC sets yuan reference rate at 6.6347 v 6.6282 prior
(CN) PBoC OMO: CNY180B v CNY80B injected in 7, 14 and 63-day reverse repos prior; Net injection CNY150B v CNY50B prior
(KR) South Korea sells 10-yr pre-issuance Govt bonds at 2.61%
(KR) Bank of Korea (BOK) sells KRW400B in 1-yr monetary stabilization bonds at 1.87%
Equities notable movers
Australia/New Zealand
BLY.AU Reports Q3 (A$) Adj Net loss 3.0M v loss 23M y/y Rev 199M v 175M y/y; +18%
MLD.AU Trading update: revenue in line with expectations, earnings adversely affected by under-performing contracts; -21%
Japan
UBER.IPO Confirms investment by consortium led by Softbank
5706.JP Reports Q2 Net profit ¥5.82B v ¥5.90Be, Op profit ¥12.1B v ¥11.4Be; +14%
China/Hong Kong
2007.HK Country Garden added to Hang Seng Index; +7.5%
