General Trend:
- Asian equity markets trade generally weaker, recently released Fed minutes eyed
- Shanghai Composite falls to lowest level since November 2014, declines over 2% in early trade
- China local government moves to ease risks related to share pledging agreements
- Australian energy producers Santos and Woodside decline following production updates
- Australia Sept unemployment rate hit the lowest level since 2012, labor participation rate declined
- Japan’s exports declined in Sept for the first time in 22 months
- Former PBoC member Fan Gang said China will never sell off its Treasury holdings amid trade war
- Bank of Korea Gov Lee said ‘time to pay attention to risks to financial stability’
- Taiwan Semi is expected to report earnings later today
- US companies expected to report earnings on Thursday (including afterhours) include American Express, Bank of New York, Intuitive Surgical , Nucor, PayPal, Philip Morris, Blackstone Group, Travelers
- China Q3 GDP data due for release on Friday
Headlines/Economic Data
Japan
- Nikkei 225 opened +0.1%
- (JP) Japan Investors Weekly Net Buying of Foreign Bonds: +¥1.02T v -¥200.5B prior; Foreign Buying of Japan Stocks: ¥52.6B v +¥1.58T prior
- (JP) Japan Sept Trade Balance: +¥139.6B v -¥45.1Be; Adj Trade Balance: -¥238.9B v -¥333.4Be; Exports y/y: -1.2% v 2.1%e (1st decline in 22-months); Imports y/y: 7.0% v 13.7%e
- (US) Treasury Currency Report: Leaves Japan on the watch list
- (JP) Bank of Japan (BoJ) Gov Kuroda: Expect CPI to pick up towards 2% target, core currently ~1%; reiterates will keep rates very low for an extended period
- (JP) Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.70% (prior 0.50%) 20-yr bonds; avg yield 0.6830% v 0.4920% prior; bid to cover 4.23x v 4.54x prior
Korea
- Kospi opened -0.4%
- (US) Treasury Currency Report: Leaves South Korea on the watch list
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50% (AS EXPECTED) ; Reiterates to keep policy accomodative, to see if more adjustment in policy accomodation needed; decision was not unanimous with 2 dissenters v 1 at prior decision
China/Hong Kong
- Hang Seng opened +0.8%, Shanghai Composite -0.7%
- (CN) China local govt of Guangzhou considering measures to ease share pledge risk
- (CN) China Securities Regulatory Commission (CSRC) planning to ease up on A-share funding via stock issues and investment banking – press
- (CN) China Policy Adviser/former PBoC Member Fan Gang says China will never sell off its US Treasury holdings to hit back at the US amid trade war; China must not launch retaliatory attacks against US companies – financial press
- (US) Treasury Currency Report: Leaves China on the watch list; China’s lack of currency transparency is a particular concern; Treasury will monitor yuan depreciation; Dollar strength and yuan decline could widen imbalances; Estimates that Chinese Central Bank’s direct currency intervention has been limited this year
- (CN) China Premier Li said domestic economy faces increasing downward pressure, reiterates government will take targeted measures to prevent large fluctuations in growth – financial press
- (CN) China PBoC Open Market Operation (OMO): Skips OMO v skipped prior: Net: nil v nil prior
- (CN) China PBoC set yuan reference rate: 6.9275 v 6.9103 prior
- (CN) China Sept FDI YTD y/y: 2.3% v 2.3% prior
- (CN) CHINA SEPT M2 MONEY SUPPLY Y/Y: 8.3% V 8.3%E; M1 Money Supply Y/Y: 4.0% v 3.9%e; M0 Money Supply Y/Y: 2.2% v 3.5%e
- (CN) CHINA SEPT NEW YUAN LOANS (CNY): 1.380T V 1.359TE
- (CN) CHINA SEPT AGGREGATE FINANCING (CNY): 2.21T V 1.55TE
- (US) Commerce Sec Ross: China negotiations due appear to be in a hiatus currently
- (CN) Exporters in China are seeking to protect profit margins, some firms said to cut prices amid tariff impact – HK Press
Australia/New Zealand
- ASX 200 opened +0.0%
- WPL.AU Reports Q3 production 23.1 MMBOE v 20.3 y/y; Total Rev $1.29B v $1.01B y/y
- STO.AU Reports Q3 production 15 MMBOE v 15 y/y; Rev $973M v $793M y/y; Narrows FY19 guidance, cuts CAPEX
- (AU) Analysts note Australia power demand to be much weaker this year; forward prices are weak and competition has increased
- (AU) Australia Q3 NAB Business Confidence: 3 v 7 prior (weakest reading since 2016); Conditions: 13 v 15 prior
- (AU) Australia Trade Min Ciobo: Australia has joined the WTO pact on government procurement
- (AU) AUSTRALIA SEPT EMPLOYMENT CHANGE: 5.6K V 15.0KE (2ND CONSECUTIVE MONTH OF GROWTH); UNEMPLOYMENT RATE: 5.0% V 5.3%E (lowest level since 2012)
- (AU) Australia Q3 NAB Business Confidence: 3 v 7 prior
- (NZ) New Zealand Opposition finance Spokesperson: Opposition has serious concerns about RBNZ reforms; independence at risk from reforms
Other Asia
- (TW) Local banks in Taiwan said to pass stress test – Taiwanese Press
North America
- (US) Treasury Currency Report: Refrains from naming China as currency manipulator; keeps same six countries on FX watch list
- ECYT To be acquired by Novartis for $24/shr in cash in a $2.1B deal
Europe
- (UK) PM May told EU leaders that “we have shown we can do difficult deals together constructively, I remain confident of a good outcome”; willing to consider keeping Britain locked to the EU beyond 2020 in an extended transition
- (US) Treasury Currency Report: Switzerland must boost its FX transparency and domestic economy (CHF weakened on the statement)
- (EU) EU Parliament president Tajani:UK PM May offered nothing “new in content” during her address to leaders in Brussels, though there was a willingness to keep negotiating
- NESN.CH Reports 9M (CHF) Rev 66.4B v 65.1B y/y; affirms FY18 & 2020 targets
- SAP.DE Reports Q3 Non-IFRS Net €973M v €1.03Be, non-IFRS Op €1.74B v €1.80Be, Rev €6.03B v €6.02Be
- NOVN.CH Reports Q3 $1.32 v $1.31e, Rev $12.8B v $12.8Be; Raises FY18 outlook
Levels as of 01:30ET
- Hang Seng -0.4%; Shanghai Composite -2.0%; Kospi -0.7%; Nikkei225 -0.7%; ASX 200 +0.1%
- Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.3%; FTSE100 -0.1%
- EUR 1.1505-1.1494; JPY 112.73-112.46 ; AUD 0.7137-0.7105;NZD 0.6556-0.6535
- Dec Gold -0.1% at $1,226/oz; Nov Crude Oil +0.1% at $69.82/brl; Dec Copper -0.0% at $2.76/lb
