General Trend:
- Automakers trade generally lower in Asia: Hyundai and Kia Motors decline over 4%
- Singapore’s DBS declines, Q3 profits miss ests
- China Oct Services PMI declines to lowest since 2017 (Caixin)
- China President Xi does not comment directly on the US (keynote speech at China International Import Expo in Shanghai)
- China PBoC announces first medium-term lending facility (MLF) operation since Sept
- Softbank is expected to report earnings after the Nikkei close
- Reserve Bank of Australia (RBA) policy decision due for release on Tuesday
Headlines/Economic Data
Japan
- Nikkei 225 opened -1.1%
- (JP) Bank of Japan (BOJ) releases minutes from Sept 18-19 meeting: Appropriate to continue easing persistently
- (JP) Japan Oct PMI Services: 52.4 v 50.2 prior; Composite PMI: 52.5 v 50.7 prior
- (JP) Bank of Japan (BOJ) Gov Kuroda: Will check balance of effects and costs of its policy in mainitaining powerful monetary easing; risk of financial destabilization is not big but BOJ will continue to monitor developments – speaking in Nagoya
Korea
- Kospi opened -0.8%
- (KR) South Korea PM Lee: Further tax cuts should be offered to government designated industrial crisis zones in order to create an actual investment effect – Korean press
- (KR) Bank of Korea (BOK) sells KRW300B in 6-month monetary stabilization bonds; avg yield 1.800%
- (KR) South Korea sells KRW800B v KRW800B indicated in 5-year bonds; avg yield 2.095%
- (KR) South Korea and US resume military drills ahead of nuclear talks – SCMP
- (KR) South Korea Official: Granted exemption from the US related to oil imports from Iran
China/Hong Kong
- Hang Seng opened -1.7%, Shanghai Composite -0.4%
- (CN) China PBOC May cut RRR for some banks in Q1 2019 – China Securities Journal
- (CN) CHINA OCT CAIXIN PMI SERVICES: 50.8 V 52.8E (lowest level since Sept 2017); PMI COMPOSITE: 50.5 V 52.1 PRIOR; New business index 50.1 (lowest level since Nov 2008)
- (CN) CHINA PBOC CONDUCTS CNY403.5B IN 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) V CNY265B PRIOR AT 3.30% V 3.30% PRIOR
- (CN) China President Xi: pledges to open market to the world; need to build an open global economy; global recovery has not stabilized yet; China goods imports to exceed $30T in the next 15 years -speaking at Import Expo (CIIE); China services imports to exceed $10T in the next 15 years
- (US) Press speculates that any trade agreement reached between President Trump and China President Xi is more likely to be a temporary truce rather than a substantive step forward
- (CN) China President Xi affirms support for private businesses – Caixin
- 486.HK Reports Q3 adj Net $338M v $262M y/y; adj EBITDA $676M v $549M y/y; Rev $2.92B v $2.46B y/y
- (HK) Hong Kong Oct PMI: 48.6 v 47.9 prior
- (CN) China PBoC sets Yuan reference rate at: 6.8976 v 6.9371 prior
- (CN) China PBoC Open Market Operations (OMO): Skips OMO v skipped prior
- (CN) China PBOC implementing new regulations on financial sector, including required to strengthen capital reserves and avoid putting the same capital pool to multiple uses, thought to go into effect H1 2019
Australia/New Zealand
- ASX 200 opened -0.2%
- WBC.AU Reports FY18 (A$) Cash Profit 8.07B v 8.06B y/y; Net Op income 22.1B v 21.8B y/y (-0.1%)
- (AU) Australia Oct Final CBA PMI Services: 51.7 v 50.8 prior; PMI Composite: 52.0 v 51.2 prior
- (AU) Australia sells A$500M in 2047 3.0% bonds, avg yield 3.233%, bid to cover 2.62x
- (NZ) New Zealand Oct ANZ Commodity Price m/m: -2.4% v -2.4% prior
- (AU) Australia Oct Melbourne Institute Inflation m/m: 0.1% v 0.3% prior; y/y: 1.9% v 2.1% prior
- GXL.AU Confirms entering into scheme of implementation agreement worth A$5.55/shr/A$481M from TPG (+18%)
- (NZ) New Zealand Treasury: Weak confidence is a risk to 2018-19 GDP growth forecast – Monthly Economic Indicators
Other Asia
- DBS.SG Reports Q3 (S$) Net 1.4B v 822M y/y; Net interest income 2.27B v 1.98B y/y
- (SG) Singapore Oct PMI: 52.6 v 49.6 prior
North America
- (US) Former Fed Vice Chairman Fischer said the Fed was afraid of negative interest rates – financial press
- (IA) US reimposes sanctions on Iran oil transactions (as expected)
- Looking ahead: US mid-term elections take place on Tuesday, will be closely watched to see if Republicans and Democrats flip control of the House and Senate
Europe
- (UK) Reportedly PM May has secured private concessions from Brussels that will keep the whole of Britain in a customs union, avoiding a hard border in Northern Ireland; also on track for a “future economic partnership” (FEP) agreement with EU – UK Sunday Times
- (UK) Over 70 business people are said to favor a public vote on the final terms of Brexit – UK press
- (UK) UK Brexit Min Raab said to have privately demanded the right to pull UK from EU’s Ireland backstop after 3 months – Telegraph
- (RU) Russia First Deputy head of Russian Govt Office Prikhodko: Trade between Russia and China may exceed $100B in 2018 – Russian press
Levels as of 01:00ET
- Hang Seng -2.3%; Shanghai Composite -0.9%; Kospi -1.5%; Nikkei225 -1.6%; ASX 200 -0.5%
- Equity Futures: S&P500 -0.3%; Nasdaq100 -0.1%, Dax -0.2%; FTSE100 -0.2%
- EUR 1.1383-1.1399; JPY 113.11-113.31 ; AUD 0.7183-0.7205;NZD 0.6633-0.6664
- Dec Gold 0.0% at $1,233/oz; Dec Crude Oil -0.6%at $62.74/brl; Dec Copper -1.3% at $2.78/lb
