Asian Equity Markets Decline Amid Rise In Treasury Yields: Trade Concerns Continued To Weigh On Hong Kong PMI Data

Oct 04 18, 07:22 GMT

General Trend:

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.3%
(AU) AUSTRALIA AUG TRADE BALANCE (A$) 1.60B V 1.45BE
(AU) Australia Sept CBA Services PMI: 52.2 v 51.8 prior
(AU) Australia sells A$500M v A$500M indicated in Dec 7 2018 notes, avg yield 1.862%, bid to cover: 5.72x
(NZ) New Zealand sells NZ$100M in 2.5% Sept 2040 inflation-indexed bonds: avg yield 1.8114%, bid to cover 3.65x
(NZ) Moody’s: Stable outlook for New Zealand banking system

China/Hong Kong

Shanghai Composite closed, Hang Seng opened -0.2%
ZTE [763.HK]: Confirms US Court extended the term for the court-appointed monitor to March 22, 2022
(CN) World Bank maintains China 2018 GDP growth forecast at 6.5%
(CN) US Navy said to propose ‘major’ show of force to warn China – CNN
(CN) US Scretary of State Pompeo to visit China on Oct 8th
(HK) Hong Kong Sept PMI: 47.9 v 48.5 prior
(HK) Certain banks in Hong Kong said to increase mortgage rebates amid recent rise in interest rates – HK Press
(HK) Certain Hong Kong property developers said to use incentives to increase sales – HK Press

Japan

Nikkei 225 opened +0.5%
Nintendo: Said to plan to release new version of ‘Switch’ in H2 2019 – US financial press
Toyota: Confirms plans to start the ‘Monet Technologies Corporation’ jv with Softbank by April 2019
(JP) Japan said to consider a reduced sales tax for convenience store food – Japanese Press
(JP) Prime Min Abe cabinet approval rating at 50% (post reshuffle) – Nikkei
(JP) Japan Finance Ministry (MOF) to sell ¥700B in 30-yr JGBs on Thursday Oct 11th

South Korea

Kospi opened +0.1%
Hynix: To raise investment in new South Korea chip plant to KRW20T ($17.7B)
(KR) Bank of Korea Gov Lee: Financial imbalances accumulating in South Korea with rising household debt
(KR) South Korea Sept Foreign Reserves: $403B v $401.1B prior (Record high)

Other

(TH) Thailand Central Bank said to place curbs on mortgage lending – Local Press
(TW) Taiwan Central Bank Gov Yang: No need to raise key rate for now; Global trade risks may affect financial markets; US dollar (USD) accounts for more than 70% of Taiwan’s FX reserves
(TW) Taiwan Sept exports may rise more than 2% y/y (vs. 1.9% prior) – Local Press

North America

US equity markets ended higher: Dow +0.2%, S&P500 +0.1%, Nasdaq +0.3%, Russell 2000 +0.9%
Alphabet [GOOGL]: US Justice Dept (DoJ) may investigate the company for anti-competitive behavior in connection with the Android operating system – NY Post
Cummins [CMI]: Isuzu confirms to explore the establishment of a partnership with Cummins
(US) DOE CRUDE: +8.0M V +1.5ME
(US) Fed Chair Powell: Need to keep moving rates gradually toward normal; policy is still accommodative; rates may go past ‘neutral’
(US) Fed’s Barkin (Voter, Leaning Hawk): Policy rate is still below neutral; supports gradual path so long as data fits
(US) Fed’s Evans (non-voter, dove): Policy to turn mildly restrictive in 2019
(US) Fed’s Mester (hawk, FOMC voter): US divergence from other economies could feed back through USD and other markets and would have to be factored in policy; A one-day move in US bonds is not concerning.

Europe

(IT) Italy PM Conte: Italy’s debt/GDP Target is below 130% in 2019, and down to 126.5% in 2021
(IT) Italy govt reportedly agrees to deficit/GDP target of 2.4% in 2019, 2.1% in 2020, and 1.8% in 2021 – Italian press
RU) Russia Energy Min Novak: there’s always the risk of oil prices going too high; oil prices are probably a bit too high already

Levels as of 01:30ET

Nikkei 225, -0.3%, ASX 200 +0.5%, Hang Seng -2%; Shanghai Composite closed; Kospi -1.6%
Equity Futures: S&P500 -0.4%; Nasdaq100 -0.5%, Dax +0.1%; FTSE100 -0.1%
EUR 1.1495-1.1463 ; JPY 114.56-114.21; AUD 0.7114-0.7078 ;NZD 0.6521-0.6488
Dec Gold -0.2% at $1,200/oz; Oct Crude Oil -0.3% at $76.24/brl; Dec Copper +0.3% at $2.833/lb

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