Headlines/Economic Data

  • China tech names trade generally lower amid hacking concerns; China released new cybersecurity rules
  • Tencent trades at the lowest level since July 2017
  • China Caixin PMI Services data hits 3-month high, in line with earlier released official services PMI data
  • (CN) Offshore yuan (CNH) Hibor rates rise despite China PBoC RRR cut
  • In Q2, Yu’E Bao (largest money market fund in China) had the highest outflows in its history, assets declined to CNY1.45T v CNY1.69T (record) q/q (Fitch report)
  • LME Aluminum declines over 3.5%: Norsk Hydro [NHY.NO] Alunorte received an approval related to its operations in Brazil
  • China’s PBOC cuts RRR 100bps to 14.5% over the weekend, saying the cut will free up CNY 1.2T ($175M) of funds for lenders to provide to small businesses and offset short term borrowing by the banks. Will become effective Oct 15th
  • China Sept Foreign Reserves fall more than expected, $3.087B v 3.105Te
  • Taiwan dollar falls to March 2017 low and Singapore dollar a one year low

Australia/New Zealand

  • ASX 200 opened -0.7%
  • ANZ.AU Recorded A$374M in charges in H2 related to refunds to customers and related remediation costs; FY18 Cash profit to be impacted
  • (AU) Australia Sept ANZ Job Advertisements m/m: -0.8% v -0.7% prior
  • (AU) Australia sells A$500M v A$500M indicated in 2.75% Nov 2028 bonds, avg yield 2.7698%, bid to cover: 4.94x
  • MYOB,[+19%], MYO.AU Confirms KKR affilliate TP offers to acquire 17.6% stake from Bain at A$3.70/shr cash 24% premium
  • Medical Developments International, [+12%], MVP.AU Signs exclutive PENTROX deal for China
  • (AU) JPMorgan analyst expects the Reserve Bank of Australia (RBA) to say the current macro-prudential and regulatory oversight are still required in its upcoming Financial Stability Review – US financial press (report to be released Friday)

Japan

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  • Nikkei 225 closed for holiday
  • (JP) Japan PM Abe says would welcome the UK to the trans-pacific partnership (TPP) trade deal with ‘open arms’ – FT
  • Sony, 6758.JP “Venom” top film in the N. American box office with $80.0M in sales; Worldwide $205.2M
  • (JP) Japan PM Abe ruling party will not submit its constitutional revision proposal to the upcoming parliamentary session despite its promise to do so, because of lack of support from coalition partner Komeito – Nikkei

Korea

  • Kospi opened -0.4%
  • (KR) Bank of Korea (BoK) Gov Lee said the central bank may ‘trim’ its GDP growth forecast later in Oct, but it won’t necessarily mean the BoK will stop seeking a rate increase – US financial press
  • (KR) North Korea leader Kim has offered to stop ICBMs in return for war ending – Korean press
  • (KR) China President Xi to visit North Korea soon according to South Korea president Moon
  • (KR) North Korea leader Kim satisfied with US Sec of State Pompeo talks; US and N. Korea to hold working level talks at next summit
  • (KR) South Korea sells KRW1.0T in 5-yr bonds, avg yield 2.285%; bid to cover 2.89x

China/Hong Kong

  • Hang Seng opened +0.6%, Shanghai Composite -1.9%
  • (US) Commerce Sec Ross considering anti-China poison pill, similar to those made with Mexico and Canada, could be made for future trade deals – financial press
  • (CN) China released new cybersecurity rules which will give officials power to inspect the information technology of companies; the rules take effect as of Nov 1st – US financial press
  • (CN) China Fin Min Liu Kun: Govt will adopt a more proactive fiscal policy but will not use strong stimulus policies – Xinhua
  • (CN) China PBoC Open Market Operation (OMO): Skips OMO v skipped prior: Net: CNY100B drain v CNY40B drain prior (drains liquidity for the 7th straight session)
  • (CN) China PBoC set yuan reference rate: 6.8957 v 6.8792 prior (weakest setting since March 11, 2017)
  • (CN) CHINA SEPT CAIXIN PMI SERVICES: 53.1 V 51.4E (3-month high); PMI COMPOSITE: 52.1 V 52.0 PRIOR

Americas

  • (US) US Congressional Budget Office (CBO) projects fiscal year 2018 federal budget deficit of $782B – US financial press
  • (BR) Brazil candidate Bolsonaro leads Presidential race with 46.4% of the vote vs 28.8% for Haddad; The race to move to runoff on Oct 28th
  • (US) Fed’s Bullard (dove, non-voter): Reiterates does not see much inflation pressure for the US economy; my view is we are close to neutral [interest rates], don’t need to get a lot higher with policy rate

Europe

  • FCCN.UK Confirms reviewing strategic options including sale
  • (UK) UK Brexiteers said to set 2022 limit to PM May’s EU customs arrangement – UK press
  • (EU) ECB said to warn lenders to curtail bookings in the UK following Brexit – FT
  • (UK) EU President Juncker: Expect to reach a deal on Brexit in November if not done in October – Austrian press

Levels as of 01:30ET

  • Hang Seng -0.6%; Shanghai Composite -2.7%; Kospi -0.4%; Nikkei225 closed; ASX 200 -1.4%
  • Equity Futures: S&P500 +0.0%; Nasdaq100 +0.0%, Dax -0.0%; FTSE100 -0.2%
  • EUR 1.1532-1.1510; JPY 113.94-113.66; AUD 0.7064-0.7046;NZD 0.6447-0.6424
  • Dec Gold -0.4% at $1,200/oz; Nov Crude Oil -0.7% at $73.81/brl; Dec Copper -0.1% at $2.76/lb
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