HomeContributorsFundamental AnalysisModest Moves Seen In AU Bond/FX Markets After The RBA Announced More...

Modest Moves Seen In AU Bond/FX Markets After The RBA Announced More Easing

General Trend

  • Asian energy firms trade generally higher after the recent rebound in oil prices
  • Banks rise in Hong Kong after recent earnings, ahead of US elections; Energy firms also gain; Early gainers in Shanghai included Financial and IT firms
  • Geely rises over 4%; China announced new energy vehicle (EV) industry plan for 2021-2035
  • Gainers in Australia include Energy, Resources, Consumer Discretionary and Financial firms
  • RBA cut rates and expanded QE program (as expected), did not announce yield target related to 5 or 10-year maturity: AUD/USD holds above 70 cents ahead of Tuesday’s US elections
  • RBA Gov Lowe: 5-year bond yield target is not appropriate; Other tools include asset purchases, transaction in FX market, and liquidity provisions
  • China may now target wheat from Australia (HK press); Sandfire Resources [SFR.AU] declines by over 6% amid speculation that China might ban imports of copper from Australia
  • Quiet session for the offshore Yuan (CNH) ahead of US elections
  • South Korea CPI data weighed down by mobile phone-related subsidy
  • South Korea said to cancel plan to increase capital gains taxes on large stockholders (local press)
  • Malaysia Central Bank is due to hold rate decision later today (no changes expected)
  • Companies expected to report during the NY morning include Emerson Electric, Eaton Corp, Humana, Johnson Controls, McKesson, Spirit Aerosystems, Sysco Corp, Thomson Reuters, Wayfair

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened +0.1%
  • AU) RESERVE BANK OF AUSTRALIA (RBA) CUTS CASH RATE TARGET BY 15BPS TO 0.10%; LOWERS 3-YEAR YIELD TARGET BY 15BPS TO 0.10%; BOTH AS EXPECTED
  • (AU) RESERVE BANK OF AUSTRALIA (RBA) ANNOUNCES NEW QE PROGRAM TO PURCHASE A$100B IN 5-10 YEAR BONDS OVER 6 MONTHS; AS EXPECTED
  • (AU) Reserve Bank of Australia (RBA) Gov Lowe: Negative policy rate in Australia is extraordinarily unlikely; Higher bond yields have added upward pressure on the A$ – post rate decision press conference
  • (AU) China said to be considering banning wheat imports from Australia – SCMP
  • BXB.AU Reports Q1 (A$) Rev 1.19B v 1.16B y/y
  • SFR.AU Comments on speculation that China may ban imports of copper from Australia: not aware of the reasons for the reported potential ban or the reliability of the media reports

Japan

  • Nikkei 225 closed for holiday
  • (JP) Japan said to consider cutting aviation fuel tax on domestic flights – Press

Korea

  • Kospi opened +0.7%
  • (KR) SOUTH KOREA OCT CPI M/M: -0.6% V 0.0%E; Y/Y: 0.1% V 0.8%E (1st decline in 4 months)
  • (KR) South Korea said to stop its plan to tighten taxes on large stockholders – Korea press

China/Hong Kong

  • Hang Seng opened +0.9%; Shanghai Composite opened +0.5%
  • (HK) Hong Kong SFC CEO Alder: To require all cryptocurrency trading platforms to be regulated whether or not they trade securities
  • (CN) China announces new energy vehicle (EV) industry plan for 2021-2035
  • 6688.HK MSCI to add A and H shares to MSCI Indexes
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 7-day reverse repos v Injects CNY50B in 7-day reverse repos prior; Net inject CN20YB v Net inject CNY0B prior
  • 1055.HK China CAAC (Aviation Regulator) To allow company to establish a unit for Cargo services
  • (CN) China PBOC sets Yuan reference rate: 6.6957 v 6.7050 prior
  • (HK) Hong Kong Chief Exec Lam: Aims to deliver policy address on Nov 25th; Hong Kong to extend social distancing rules for 7 additional days
  • 992.HK Reports Q2 Net $310M v $202.2M y/y, Op $565M v $441.7M y/y Rev $14.5B v $13.5B y/y
  • 1114.HK China province considering debt restructuring for the Company
  • (CN) China PBOC and CBIRC issues draft rules on online micro-lending; requiring lenders offering loans across different regions should have registered capital of at least CNY5.0B

Other

  • (SG) Monetary Authority of Singapore (MAS) To discontinue S$1,000 note starting Jan 1st; saying discontinuation will pre-empt money laundering and terrorism financing risks

North America

  • US Presidential election voting to take place on Nov 3rd
  • MDLZ Reports Q3 $0.63 v $0.63e, Rev $6.67B v $6.49Be
  • PYPL Reports Q3 $1.07 v $0.94e, Rev $5.46B v $5.40Be
  • JPM Raises FY21 NII $54B (prior $53B)

Europe

  • (DE) Germany audit office said to criticize high levels of debt – press

Levels as of 12:15ET

  • Hang Seng +2.0%; Shanghai Composite +1.1%; Kospi +1.4%; Nikkei225 +1.4%; ASX 200 +2.0%
  • Equity Futures: S&P500 +0.4%; Nasdaq100 +0.1%, Dax +0.6%; FTSE100 +0.9%
  • EUR 1.1655-1.1636; JPY 104.81-104.66; AUD 0.7063-0.7028; NZD 0.6647-0.6611
  • Commodity Futures: Gold +0.1% at $1,893/oz; Crude Oil -0.0% at $36.80/brl; Copper +0.1% at $3.09/lb

 

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