General Trend:
- Asian equities trade generally higher; Shanghai and Hong Kong rise over 1% in early trade
- Japanese automakers and steel companies trade lower amid comments from BMW
- Today’s Abe/Trump meeting in focus
- Asia Development Bank (ADB) trims China’s 2019 growth forecast
- There is speculation that China might soon ease liquidity conditions (US financial press)
- Japan sells 40-yr JGBs at higher yield and lower bid to cover (first 40-yr auction since BoJ announced forward guidance in late July)
- Later today’s US Fed decision and forecasts in focus
- China PBoC is expected to continue to not follow the US Fed FOMC rate hikes, according to analysts (US financial press)
- FTSE Russell said to soon make decision on China A-shares
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (AU) Australia sells A$1.5B v A$1.5B indicated in May 2030 bonds, avg yield 2.8035%, bid to cover 2.5x
- (NZ) NEW ZEALAND AUG TRADE BALANCE (NZ$): -1.5B V -925ME (widest monthly deficit on record)
- (NZ) NEW ZEALAND SEPT ANZ BUSINESS CONFIDENCE: -38.3 V -50.3 PRIOR (highest since May)
China/Hong Kong
- Shanghai Composite opened +0.2%, Hang Seng +0.4%
- (US) Pres Trump: US was harmed economically after China joined the WTO; China market distortions and “the way they deal cannot be tolerated”
- (CN) China Senior Diplomat Wang Yi: China and the US should avoid falling into a zero-sum game trap; hopes the US meets China halfway to prevent the spread of negative momentum
- (CN) China PBoC set yuan reference rate: 6.8571 v 6.8440 prior (weakest yuan fix since Aug 24th)
- (CN) China PBoC Open Market Operation (OMO): Skips OMO v CNY60B injected in 14-day reverse repos prior; Net: CNY40B drain v CNY90B drain prior
- (CN) According to analysts, China banking liquidity to be ‘loose’ at the end of September – PBoC backed Financial News
- (CN) China should unclog monetary policy transmission – China Securities Journal
- (CN) Analyst at Founder Securities speculates that China PBoC might soon announce another cut in the banks’ reserve ratio requirement (RRR) – US financial press
- (CN) China NDRC: Issues guidelines to develop the digital economy, expand employment
- (CN) Asia Development Bank (ADB): Trims China 2019 GDP growth forecast to 6.3% vs 6.4% July forecast
- (CN) MSCI: To consult on increasing the weight of China A-shares in its indexes; considering whether to raise the weighting of A-shares to 20% of the free float-adjusted market cap of its global indices
- (HK) Hong Kong money market rates remain at 2008 highs ahead of Wed’s US FOMC decision
Japan
- Nikkei 225 opened -0.4%
- (JP) Japan and US said to reach ‘basic agreement’ on ways to promote trade – Japanese Press
- (JP) Japan FSA said to probe regional banks investment in property loans – Japanese Press
- (JP) Japan MoF sells ¥400B v ¥400B indicated in 0.80% 40-yr JGBs, highest accepted yield 1.0250% v 0.880% prior, bid to cover: 3.24x v 3.30x prior
- (JP) Bank of Japan (BoJ) Aug Core CPI Y/Y: 0.5% v 0.5% prior
Korea
- Kospi closed for holiday
- (KR) General Robert Abrams: planning continues for joint US-South Korea military exercises in Spring 2019; decision whether to go ahead with the exercises will be up to political leaders
North America
- US equity markets ended mixed: Dow -0.3%, S&P500 -0.1%, Nasdaq +0.2%, Russell 2000 +0.2%
- CBS: Board member Richard Parsons named as interim Chairman; Board members Bruce Gordon and William Cohen to resign
- (US) Weekly API Oil Inventories: Crude: +2.9M v +1.2M prior
- (IA) US Special Envoy for Iran Hook: US will ensure prior to the imposition of Iran sanctions that we have a well-supplied oil market
- (CA) Ontario expected to announce retail cannabis laws later this week – US financial press
- (US) White House: US President Trump to meet with UK PM May on Wed in NYC; confirms Trump and Japan PM Abe to meet on Wed
Europe
- (UK) Prime Min May reportedly to lay out in speech tomorrow plans to cut UK corporate tax rates to lowest in the G20 – The Telegraph
- (IT) Italy Deputy PM Di Maio: 5-Star Party will not support 2019 budget targets without its demands for ‘citizens income’ provision and pension reform
- (TR) EU Commissioner Hahn rejects financial aid to Turkey – German Press
- Deutsche Bank [DBK.DE]: Reportedly studied possible UBS, Commerzbank merger scenarios – Handelsblatt
- Banco Santander [SAN.ES]: Names Andrea Orcel as new CEO; names Jose Antonio Alvarez as Executive Chairman of Santander Spain; effective as early as Jan 1st
Levels as of 01:30ET
- Nikkei 225, +0.4%, ASX 200 flat, Hang Seng +1.9%; Shanghai Composite +1.6%; Kospi closed
- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.4%, Dax +0.3%; FTSE100 +0.4%
- EUR 1.1771-1.1756; JPY 113.04-112.88 ; AUD 0.7285-0.7244 ;NZD 0.6688-0.6634
- Dec Gold +0.1% at $1,206/oz; Oct Crude Oil -0.2% at $72.16/brl; Dec Copper +0.4% at $2.832/lb