Asian equity markets opened mixed in line with what was seen in the US trading session. September Nikkei futures and options settled at 19,279.
In Japan, Q2 GDP growth was revised lower amid weaker CAPEX. According to the Japanese government, the downward revision in the GDP data was the largest under the current calculation method adopted in 2010.
China’s Aug Trade Surplus was below ests amid weaker than expected exports and higher imports.
Fed official Dudley commented earlier in the Asian session and did not repeat expectation for a rate hike this year.
China’s PBoC set the yuan stronger for the 10th straight session and amid this move, other Asian currencies, including the Taiwan dollar (TWD) and Hong Kong dollar (HKD) have moved higher against the broadly weaker US dollar.
Venezuela’s President Maduro said he was planning a new FX basket to be ‘free’ of the US dollar and the exchange mechanism to work with the Chinese yuan.
EUR/USD and AUD/USD have traded at highs not seen since 2015.
As the weekend approaches, North Korea is in focus following the nuclear test that it conducted last weekend. Earlier in the week, it was reported in the South Korean press that North Korea was said to be preparing another intercontinental ballistic missile (ICBM) launch and that it could come around Sat, Sept 9th.
Key economic data
(CN) CHINA AUG TRADE BALANCE: $42.0B V $48.5BE
(JP) JAPAN Q2 FINAL GDP SA Q/Q: 0.6% V 0.7%E; ANNUALIZED: 2.5% V 2.9%E
(JP) JAPAN JULY BOP CURRENT ACCOUNT ADJUSTED ¥2.03T V ¥1.65TE; CURRENT ACCOUNT BALANCE: ¥2.32T V ¥2.03TE; Trade Balance BoP Basis: ¥566.6B v ¥518Be
(JP) JAPAN BANK LENDING EX-TRUSTS Y/Y: 3.2% V 3.4%E; INCL TRUSTS Y/Y: 3.2% V 3.3% PRIOR
(AU) AUSTRALIA JULY HOME LOANS M/M: 2.9% V 1.0%E; INVESTMENT LENDING: -3.9% V +1.6% PRIOR
(NZ) NEW ZEALAND Q2 MFG ACTIVITY Q/Q: 3.9% V 2.8% PRIOR; MFG ACTIVITY VOLUME: +1.0% V -0.3% PRIOR
(CN) China Aug Retail Auto Sales: 1.9M units, +5.8% y/y – PCA
Speakers and Press
(CN) China’s Air Force said to have conducted exercises near Korean peninsula – China State Media
(AU) RBA Assist Gov Debelle: To move open-market operations to earlier time
(KR) South Korea: Exports to continue driving recovery; reiterates North Korea and trade negotiations risks to growth
(US) US House Majority Leader Mccarthy (R): House will vote on Harvey package on Friday
(US) Fed’s George (hawk, non-voter): US under full employment, sees labor market continuing to tighten; inflation relatively mild; It is time to continue to move rates higher.
(US) Fed’s Dudley (voter): Reiterates balance sheet rolloff likely to start relatively soon; Don’t expect Harvey to alter trajectory of US economy
(VE) Venezuela President Maduro: To adopt new FX basket to be ‘free’ of the US dollar, next week DICOM exchange mechanism to work with China yuan instead of US dollar
Asian Equity Indices/Futures (00:30ET)
Nikkei -0.5%, Hang Seng +0.6%, Shanghai Composite +0.2%, ASX200 -0.4%, Kospi -0.1%
Equity Futures: S&P500 -0.2 ; Nasdaq -0.1 , Dax -0.2% , FTSE100 -0.1%
FX ranges/Commodities/Fixed Income (00:30ET)
EUR 1.2018-1.2090 ; JPY 108.05-108.49; AUD 0.8043-0.8116; NZD 0.7228-0.7325
Aug Gold +0.2% at 1,354/oz; Aug Crude Oil +0.2% at $49.17/brl; Sept Copper -0.2% at $3.14/lb
GLD SPDR Gold Trust ETF daily holdings flat at 836.9 tons
(CN) PBOC SETS YUAN REFERENCE RATE AT: 6.5032 V 6.5269 PRIOR (10TH STRAIGHT STRONGER YUAN SETTING); strongest yuan fix since May 12, 2016
(CN) PBOC SKIPS OMO V SKIPPED PRIOR; For the week drains a net of CNY330B in liquidity vs CNY280B prior week; PBoC: Reiterated bank liquidity at ‘relatively high level’
(AU) Australia sells A$500M in 5.75% May 2021 Bonds, avg yield 2.0164%, bid to cover 7.04x (highest since at least 2007)
Equities notable movers
Hyundai Motor, 005380.KR Negotiating payments with supplier for one of its Chinese plants; -2.9%
US markets on close: Dow -0.1%, S&P500 flat%, Nasdaq +0.1%, Russell -0.3%
Best Sector in S&P500: Health Care +1.1%
Worst Sector in S&P500: Financials -1.7%
At the close: VIX 11.55 (-0.08 pts); Treasuries: 2-yr 1.29% (-5bps), 10-yr 2.06% (-9bps), 30-yr 2.68% (-9bps)
US Market Summary
Equities traded flat to slightly lower today as the effects of Harvey and expectations for Irma begin to take their toll. US jobless claims came in the highest this week in two years. Media stocks were particularly hard hit after cautious management commentary at a conference, with Walt Disney and Comcast weighing on the broader market. The Nasdaq managed to buck the general trend with help from Microsoft and Amazon. Crude oil prices pared recent rises but held its ground on lower than expected increase in crude oil stocks; price dropped less than 0.1% on the day after having been lower. Treasury yields declined across the curve as investors reacted to more dovish comments from Fed officials; 10-year and 30-year yields dropped 6 bps each to 2.04% and 2.66% respectively. Gold continued to climb for a 9th consecutive session, reaching a new recent high at $1,349.52, before closing slightly lower.
US Afterhours Movers
KURA Announces positive Phase 2 study for Tipifarnib in HRAS Mutant Head and Neck Cancer; +22.3% afterhours
ZUMZ Reports Q2 -$0.02 v -$0.06e, Rev $192.2M v $191Me; Guides Q3 $0.43-0.48 v $0.43e, R$236-241M v $227Me, SSS +4-6%; +9.5% afterhours
BV Reports Q1 $0.04 v -$0.00e, Rev $52.2M v $49.7Me- Adjusted EBITDA $6.7M v $3.9M y/y; +6.2% afterhours
EFX Announces cybersecurity incident involving consumer information; potentially impacts 143M US consumers; credit card numbers for 209K consumers were accessed; -5.4% afterhours
FNSR Reports Q1 $0.40 v $0.40e, Rev $341.8M v $342Me; Guides Q2 $0.27-0.33 v $0.49e, Rev $322-342M v $375Me; -7.6% afterhours
AOBC Reports Q1 $0.02 v $0.11e, Rev $129M v $148Me; Guides Q2 adj EPS $0.07-0.12 v $0.23e, Rev $140-150M v $164Me; -17% afterhours