China Not Worried About Trade War With US

Oct 23 18, 06:57 GMT

General Trend:

Asian equity markets trade generally lower
Chinese automaker BAIC Motor trades at record low, reported 9-month results
Australian equities weighed down by Utilities, Energy and Financial shares
Shipping and Iron/Steel companies underperform in Japan
Asian steelmaker earnings in focus
Tokyo Steel declines ahead of expected earnings report
South Korean steelmaker Posco declines ahead of expected earnings report
Samsung Biologics declines over 4% ahead of expected earnings report
China govt official Zhang Qingli reportedly told US investors at meeting that ‘We don’t fear a trade war with the US
US companies expected to report earnings on Tuesday (including afterhours) include 3M, Arch Coal, Biogen, Caterpillar, Corning, Harley Davidson, Lockheed Martin, McDonald’s, Pulte Homes, Texas Instruments and Verizon

Headlines/Economic Data

Japan

Nikkei 225 opened -0.9%
7202.JP Reportedly to partner with Nvidia on self-driving trucks and large commercial vehicles – Nikkei
(JP) Japan to end new official development assistance to China – Japanese Media
(JP) Former BOJ gov Shirakawa: Growing global debt may lead to the next economic crisis – Japan press
(JP) Japan Fin Min Aso: ‘In principle’ the sales tax increase will happen as planned, some disruption expected when it takes place but will not delay for that
Nomura: Planning to set up ¥100B fund with China sovereign wealth fund CIC – Japan press

Korea

Kospi opened -0.7%
(KR) According to economists South Korea needs to quickly take measures to prevent a possible interest rate hike next month from making a deeper dent in the country’s economic growth and employment – Korean press
(KR) South Korea Sept PPI M/M: 0.3% v 0.5% prior; Y/Y: 2.7% v 3.0% prior
(KR) South Korea Fin Min Kim: domestic financial and FX markets are stable
Posco, 005490.KR Reports Q3 (KRW) Net 1.1T v 910Be; Op 1.5T v 1.4Te; Rev 16.4T v 16Te; Expect steel prices to remain solid due to China winter production cuts

China/Hong Kong

Hang Seng opened -0.5%, Shanghai Composite -0.1%
(CN) China govt official Zhang Qingli reportedly told US investors at meeting that ‘We don’t fear a trade war with the US’
(CN) Brokerage firms in China to establish CNY21.0B asset management plan – China Securities Times
(CN) China PBoC Open Market Operation (OMO): To inject CNY120B in 7-day reverse repos v CNY120B prior: Net: CNY120B injection v CNY120B prior
(CN) China PBOC sets Yuan Reference Rate: 6.9338 v 6.9236 prior
(CN) China Industry Ministry (MIIT) Official: China vehicle sales may grow slowly in the future
(CN) China PBOC funds release from re-lending is not QE – China 21st

Australia/New Zealand

ASX 200 opened flat
(AU) New polling analysis shows collapse in support for Australia PM Morrison’s Coalition in every mainland state since the leadership change – The Australian
WPP.AU Cuts FY18 EPS tracking below current guidance of +3% y/y, now expects -15% to -13% y/y; Rev -2% to -1% y/y; CEO Mike Connaghan resigns, effective Dec 31st [-28%]
BXB.AU Reports Q1 Rev $1.42B, +6% y/y at cc [-0.8%]
HSO.AU Receives A$2.36/share cash offer from BGH Consortium; board to assess the proposal [+21%]
(AU) Australia PM Morrison: Energy retailers to set price benchmarks for bills
(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 112.3 v 119.5 prior
(AU) Rabobank sees Australia Winter 2018/19 wheat harvest at 29.3M tons, -23% y/y – Winter Crop Production Outlook

Other Asia

North America

US equity markets ended mixed: Dow -0.5%, S&P500 -0.4%, Nasdaq +0.3%, Russell -0.2%
(US) President Trump seeking extra tax cut of 10% for middle income Americans
TRPX FSD Pharma Signs Binding LOI to Acquire Therapix Biosciences, TRPX shareholders to receive $48M [+70% afterhours]
(US) President Trump: Drug prices will soon be “plunging”

Europe

(UK) OBR underestimate on tax receipts gives Finance Ministry a £13B/yr windfall in budget to ease pressure on National Health Service (NHS) – FT
Bayer [BAYN.DE]: San Francisco judge in ‘Roundup’ case Ramos Bolanos ruled the $250M in punitive damages awarded by jury must be cut to match the ~$39.3M in compensatory damages – US financial press

Levels as of 01:30ET

Hang Seng -2.2%; Shanghai Composite -1.3%; Kospi -2.8%; Nikkei225 -2.4%; ASX 200 -1.1%
Equity Futures: S&P500 -0.8%; Nasdaq100 -0.9%, Dax -0.8%; FTSE100 -0.6%
EUR 1.1468-1.1452; JPY 112.49-112.84 ; AUD 0.7059-0.7084;NZD 0.6537-0.6612
Dec Gold +0.2% at $1,227/oz; Dec Crude Oil -0.3% at $69.19/brl; Dec Copper -0.1% at $2.77/lb

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