HomeContributorsFundamental AnalysisAustralian Yields Rise After Better Than Expected Employment Data

Australian Yields Rise After Better Than Expected Employment Data

General Trend:

  • Markets later pare opening gains
  • Australia S&P ASX200 index lags on declines in financials and utilities
  • Taiwan Semi declines in the aftermath of Apple’s product announcements
  • US reportedly planning new round of trade talks with China led by Treasury Sec Mnuchin to get economic negotiations back on track (press)
  • China Soybean Futures decline, while Shanghai Copper rises amid the trade optimism
  • NZD declines as milk company Fonterra reports first ever annual loss; Next week’s GDP data in focus (Sept 20th)
  • South Korea bond yields rise after PM was said to comment on interest rates; curve flattens
  • ECB and BoE due to hold policy meetings later today

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened -0.1%
  • ASX 200 Utilities index -1.5%, Financials -1%, Consumer Discretionary -0.3%, Telecom -0.3%; Resources +1.1%, REIT +0.6%
  • (AU) AUSTRALIA AUG EMPLOYMENT CHANGE: +44K V 18.0KE; UNEMPLOYMENT RATE: 5.3% V 5.3%E
  • (AU) Australia 3-year bond yield rises after better than expected employment change; up over 3bps on session
  • (AU) Australia Sept Consumer Inflation Expectation: 4.0% v 4.0% prior
  • (AU) Australia Trade Min Ciobo: The policies of the India and Pakistan government have contributed to the glut in the global sugar market
  • (NZ) New Zealand Aug REINZ House Sales Y/Y: +3.1% v +0.7% prior
  • (NZ) New Zealand Aug Food Prices M/M: -0.5% v 0.7% prior (first decline since Feb)
  • (NZ) New Zealand sells NZ$250M v NZ$250M indicated in April 2029 bonds, avg yield 2.5711%, bid to cover: 3.1x
  • Fonterra [FCG.NZ]: Reports FY18 (NZ$) Net loss 196M; Normalized EBIT 902M, -22% y/y; Rev 20.4B, +6% y/y

China/Hong Kong

  • Shanghai Composite opened +0.9%, Hang Seng +1.7%
  • Hang Seng Info Tech index +2.7%, Energy +2.7%, Materials +2.6%, Services +2.5%, Industrial Goods +2.2%, Financials +1.3%, Property/Construction +1.3%, Consumer Goods +0.2%
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 7 and 14-day reverse repos v CNY60B injected in 7-day reverse repos prior: Net: CNY120B injection v CNY60B injection prior
  • (CN) China PBoC comments on earlier injection in open market operation (OMO): Says the fund injection aimed at countering factors related to tax payments and government bond issuance
  • (CN) China PBoC set yuan reference rate: 6.8488 v 6.8546 prior
  • (CN) China said to end output cuts for steel companies with low emissions – Chinese Press
  • *(CN) CHINA AUG M2 MONEY SUPPLY Y/Y: 8.2% V 8.6%E (released on Sept 12th)
  • (CN) CHINA AUG NEW YUAN LOANS (CNY): 1.280T V 1.350TE (released on Sept 12th)

Japan

  • Nikkei 225 opened +0.2%
  • TOPIX Marine Transportation index +2%, Info & Communications +1.7%, Iron & Steel +1.5%, Retail Trade +1.5%, Real Estate +1.1%, Electric Appliances +0.4%
  • Automakers generally outperform
  • Toyota: Said to have received a technology sharing request from China related to hybrid car technology, in talks to license hybrid system to Geely – US financial press
  • (JP) Japan Jul Core Machine Orders M/M: 11.0% v 5.5%e (fastest rise since Jan 2016); Y/Y: 13.9% v 4.3%e
  • (JP) According to the Japan Center for Economic Research, July GDP declined by 0.5% m/m; cited narrowing trade balance and flat domestic demand – Japanese Press
  • (JP) Japan MoF sells ¥2.0T v ¥2.0T indicated in 0.10% 5-year JGBs, avg yield -0.0710% v -0.0760% prior, bid to cover: 5.53x v 3.95x prior

Korea

  • Kospi opened +0.1%
  • (KR) South Korea PM Lee Nak-yon said it is time to ‘seriously’ discuss raising policy interest rate – SK Press
  • (KR) South Korea reportedly to raises taxes on property ownership for multiple homeowners to curb speculative buying – press
  • (KR) South Korea Finance Ministry: Plans to issue 10 and 30-year US dollar denominated bonds; details to be decided at a later date
  • (KR) South Korea President said to have asked Samsung and Hyundai to visit North Korea – South Korean Press
  • (KR) North Korea may name new UN Ambassador next week – South Korean Press

Other

  • (ID) Moody’s: Indonesia credit is resilient to Rupiah (IDR) weakness, but further currency declines would be broadly credit negative
  • (SG) Singapore Monetary Authority (MAS) Managing Dir Menon: Global economy is currently remarkably resilient; tariffs thus far are not yet in the data; Global growth ‘bound’ for slowdown into 2019

North America

  • US equity markets ended mixed: Dow +0.1%, S&P500 flat, Nasdaq -0.2%, Russell 2000 -0.2%
  • S&P500 Financials -0.9%; Consumer Staples +1.2%
  • (US) National Hurricane Center (NHC): Hurricane Florence downgraded to a Category 2 storm (vs. Category 3 prior), maximum sustained winds 110 mph v 115 prior
  • (US) DOE CRUDE: -5.3M V -1.5ME;
  • (CA) Canada Foreign Min: Will not be at the Thursday talks related to NAFTA, officials to work on NAFTA in Washington on Thursday; talks are not at a ‘stalemate’

Europe

  • (IT) Italy Fin Min Tria reportedly threatening to quit over budget – press
  • (UK) EU reportedly has started redrafting an Irish Brexit protocol as a conciliatory gesture toward UK – press
  • (UK) Group of Tory Party rebels reportedly sets three-week deadline for PM May to ditch current ‘Chequers’ plan for Brexit deal – press
  • (UK) Brexit Min Raab: Warns that UK will not pay EU divorce bill without a Brexit agreement
  • (UK) UK Government: To publish ‘no deal’ Brexit papers on mobile roaming charges and vehicle standards on Thursday
  • (UK) UK PM May expected to discuss immigration rules at a meeting on Sept 24th – UK Press
  • RBS: Chairman said to consider up to £4.0B special dividend – UK Press
  • (TR) Turkey has decided that property sales and rental agreements cannot be made in foreign currency – Local Press
  • (PT) IMF: Portugal outlook is ‘positive’, sees external risks – Article IV Consultation

Levels as of 01:30ET

  • Nikkei 225, +1%, ASX 200 -0.7%, Hang Seng +1.2%; Shanghai Composite +0.2%; Kospi +0.1%
  • Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax flat; FTSE100 +0.2%
  • EUR 1.1643-1.1622 ; JPY 111.47-111.15 ; AUD 0.7201-0.7165 ;NZD 0.6567-0.6549
  • Dec Gold -0.1% at $1,210/oz; Oct Crude Oil -0.7% at $69.86/brl; Dec Copper -0.2% at $2.680/lb
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