Asian Equities Trade Generally Weaker Amid US Holiday

General Trend:

• Chinese automakers decline as the NDRC commented on industry investment
• Shanghai Composite Property index drops over 1.5%
• HK casino names decline following release of Aug Macau gaming revenues
• Aussie declines after weaker than expected retail sales
• Australia CoreLogic housing prices decline for 11th straight month
• Japan 10-yr JGB yield hits the highest since early Aug
• Japan Q2 Capex rises at the fastest y/y pace since late 2006
• China Caixin Manufacturing PMI hits 14-month low, new export orders continue to contract
• Reminder: The public comment period related to the US’ proposed tariffs on $200B in China goods is due to end on Sept 6th (Thursday).
• Emerging market currencies remain under pressure
• Canadian Dollar declines, US President Trump said a trilateral NAFTA deal with Canada is not necessary
• US and Canada are closed on Monday in observance of holiday
• Reserve Bank of Australia (RBA) rate decision expected on Tuesday
• Fast Retailing expected to report Aug SSS on Tuesday

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.1%
• ASX Consumer Discretionary index +0.2%, REIT +0.2%; Resources -0.3%, Telecom -1.8%, Utilities -0.5%, Energy -0.2%, Financials -0.1%
• (AU) AUSTRALIA JUL RETAIL SALES M/M: 0.0% V 0.3%E
• (AU) Australia Q2 Company Operating Profit Q/Q: 2.0% v 1.3%e; Inventories SA Q/Q: 0.6% v 0.2%e
• (AU) Australia Aug CoreLogic House Price M/M: -0.4% v -0.6% prior (11th straight decline)
• (AU) Australia new PM Morrison said he is open to ordering a judicial inquiry into pricing in the energy industry – US financial press
• (AU) According to Rabobank, the drought in eastern Australia has pushed confidence in the agricultural sector to the lowest since 2006 – US financial press
• (NZ) NEW ZEALAND Q2 TERMS OF TRADE INDEX Q/Q: 0.6% V 1.0%E
• (NZ) New Zealand Treasury: Maintains forecast for 0.7% GDP growth in Q2, private consumption may exceed forecast in Q2 – Monthly Economic Indicators Report
• (NZ) The market is now pricing in an ~50% chance of a rate cut by the Reserve Bank of New Zealand (RBNZ) by mid-2019 – US financial press

China/Hong Kong

• Shanghai Composite opened -0.3%, Hang Seng -0.3%
• Hang Seng Info Tech index -2.7%, Consumer Goods -2.2%, Materials -2.1%, Services -1.8%, Property/Construction -1.5%, Energy -1.3%, Industrial Goods -1.1%, Financials -0.6%; Telecom +0.4%
• (CN) CHINA AUG CAIXIN PMI MANUFACTURING: 50.6 V 50.7E (14-month low)
• (HK) Macau Aug gaming revenue MOP26.6B v MOP25.3B m/m, +17.1% y/y
• (CN) On Aug 31 China legislative branch passed the e-commerce law, due to take effect from Jan 1 2019, according to Australia’s A2 Milk
• (CN) China NDRC said to strictly prevent haphazard investment and low-level redundant development in the auto industry – financial press
• (CN) China Agriculture Ministry: Confirmed the 6th outbreak of African Swine Fever in China; has culled more than 38K hogs by Sept 1st due to the outbreak
• (CN) China Communist Party journal (Qiushi) said the country may see near-term pain from trade friction with the US, including a negative impact on financial stability; reiterates stability growth trend would not change – financial press
• (CN) China said to consider revision to law in order to allow issuance of dual-class shares – US financial press
• (CN) China PBoC Deputy Gov reiterates to firmly push forward deepening of reform and further opening up – local press
• (CN) China PBoC set yuan reference rate: 6.8347 v 6.8246 prior
• (CN) China PBoC Open Market Operation (OMO): Skips OMO (9th straight skip)

Japan

• Nikkei 225 opened -0.2%
• TOPIX Real Estate index -2%, Iron & Steel -1.8%, Electric Appliances -1.6%, Marine Transportation -1.3%, Securities -0.5%, Info & Communications -0.3%; Retail trade +0.3%
• Automakers trade generally lower
• (JP) On Saturday, Bank of Japan (BoJ) Gov Kuroda reiterated the central bank’s forward guidance, unlikely to raise interest rates for ‘quite some time’ – financial press
• (JP) JAPAN Q2 CAPITAL SPENDING (CAPEX) EX SOFTWARE: 14.0% V 7.4%E; CAPITAL SPENDING Y/Y: 12.8% V 6.5%E
• (JP) Japan Aug Final Manufacturing PMI: 52.5 v 52.5 prior
• (JP) Follow Up: At talks held in Beijing last week, top finance officials from China and Japan agreed to work expeditiously on initiatives agreed to in May 2018, including the resumption of currency swap agreement – Japanese Press
• (JP) Japan PM Abe said relations with China are back on normal track – Press
• (JP) Japan Chief Cabinet Sec Suga: PM Abe to visit Russia for economic forum on Sept 11th

Korea

• Kospi opened -0.2%
• (KR) South Korea Aug Trade Balance: $6.9B v $7.3Be
• (KR) South Korea Aug Manufacturing PMI: 49.9 v 48.3 prior
• (KR) South Korea sells KRW1.2T v KRW1.2T indicated in 5-year bonds: yield 2.105%
• (KR) South Korea President Moon said to have floated the idea of a 4-way summit which would include the two Koreas, in addition to the US and China – South Korean press

Other

• Indonesia Rupiah currency (IDR) continues to trade at lowest levels in more than 20 years
• (ID) Indonesia 10-yr bond yield trades near 8.22% (highest since Nov 2016)
• (ID) Indonesia Central Bank: To remain a stand-by buyer of bonds
• (ID) Fitch affirms Indonesia sovereign rating at BBB; Outlook Stable
• (ID) Indonesia Aug CPI M/M: -0.1% v 0.1%e; Y/Y: 3.2% v 3.3%e
• (TH) Thailand Aug CPI M/M: 0.3% v 0.2%e; Y/Y: 1.6% v 1.5%e

North America

• (US) Pres Trump tweets that a trilateral NAFTA deal with Canada is not necessary and Congress should not “interfere” with trade negotiations; Canada must agree to new terms or US will terminate and “go back to pre-NAFTA”
• (AR) Follow Up: Argentina Treasury Minister is expected to speak on Monday at 9:45 AM (local time) – US financial press
• Ford: Said to plan to end production of certain automobile models as part of its previously announced operational restructuring plan – UK Press

Europe

• (UK) UK PM May said there will be no compromise with EU on Brexit plan, reiterates will not give in to those calling for a second referendum on Brexit – UK Press
• (IT) Fitch revises Italy sovereign debt rating outlook to Negative from Stable; affirms BBB rating (from Aug 31st)
• (IT) Italy Interior Min Salvini: Italy will touch the 3% EU budget deficit limit without breaching it – Local Media
• (DE) Qatar said to plan to invest billions of dollars in Germany – German Press

Levels as of 01:30ET

• Nikkei 225, -0.6%, ASX 200 +0.1%, Hang Seng -1%; Shanghai Composite -1.1%; Kospi -0.8%
• Equity Futures: S&P500 flat; Nasdaq100 flat, Dax -0.2%; FTSE100 -0.4%
• EUR 1.1606-1.1589 ; JPY 111.20-110.85 ; AUD 0.7196-0.7166 ;NZD 0.6622-0.6593
• Aug Gold -0.2% at $1,204/oz; Sept Crude Oil -0.3% at $69.62/brl; Sept Copper -0.2% at $2.659/lb