Asian Countries Continue To Report Slower Growth In Q3

Nov 19 18, 06:38 GMT

General Trend:

Asian equity markets trade mixed
Shanghai Property index rises over 1%, adds to Friday’s gain
Australian markets weighed down by banks
Financials decline in Japan while tech names gain ; Softbank rises over 4.5%
Little reaction from USD/JPY on BOJ Gov Kuroda comments on bank profitability; banking names weaker
Japan Display declines over 7%, broker issued cautious commentary
Australia’s Stanmore Coal rises over 17%, received takeover offer
Japanese insurers plan to invest in the US property market (Japanese press)
Hong Kong and Thailand report weaker than expected Q3 growth
APCA summit fails to reach joint communique for the first time in its history due to sparring giants, China and US
Various HK property developers announce plans to tap the USD bond market
China Oct bond issuance declines m/m (Xinhua)
Press highlights US TIC flows, nothing that china has reduced its US Treasury holdings by the most in 8-months
US Fed Fund Futures are implying lower probability of Dec 2018 rate hike vs last week; Fed’s Harker (non-voter) spoke on Friday
No confidence vote for UK PM May said to be just 6 votes shy of the required 48 needed
EU Brexit Chief Negotiator Barnier has floated the idea of extending Brexit transition by 2 years to end of 2022
Reserve Bank of Australia (RBA) due to release its monetary policy meeting minutes on Tuesday

Headlines/Economic Data

Japan

Nikkei 225 opened flat
(JP) Japan Oct Trade Balance: -¥449.3B v -¥70Be; Adj Trade Balance: -¥302.7B v -¥48.3Be; Exports to US +11.6%; China 9%; Asia +7.3%; EU +7.7%
(JP) Bank of Japan (BoJ) Gov Kuroda: Possible changes in risk appetite and risk profile of banks amid low-interest rate environment is an issue central banks are highly attentive too
(JP) Japan PM Abe: To order a 2nd extra budget after returning to Japan (Friday)

Korea

Kospi opened +0.2%
(KR) South Korea affiliates and subsidiaries of South Korea’s top 30 conglomerates spent combined KRW64.9T on acquiring business assets, +10.9% y/y – Korean press
(KR) Bank of Korea (BoK): Any rapid bond capital outflow may incite market unrest
(KR) North Korea might have tested a new long-range artillery – financial press (Friday)
(KR) South Koreans owning more than 2 houses increases 140K in a year, those owning 5 or more homes now tops 110K according to Statistics Korea
(KR) South Korea sells KRW310B 6-month Monetary Stabilization Bonds (MBSs) at 1.790%
(KR) North Korea press DPRK: US has forgotten the objectives agreed upon during the Singapore summit; maximum pressure tactic is medieval and will not work – Yonhap

China/Hong Kong

Hang Seng opened +0.4%, Shanghai Composite +0.1%
(CN) China former trade min Long Yongtu: targeting US soybeans from the start was a ‘political’ decision that was not properly thought through – SCMP
(CN) Asia-Pacific Economic Cooperation summit ended without agreement on a joint communique for the first time in its history; escalating tensions between the United States and China dominated proceedings
(CN) Former PBoC Gov Zhou said officials must fully assess the impact that fintech might have on monetary policy and financial stability – HK Press
(HK) Property developers in Hong Kong said to have low sales volumes for certain new projects – HK Press
(CN) South China Morning Post comments on China’s recent trade offer to the US: The offer said to include additional purchases of US natural gas, along with improved intellectual property rights protection
iPhone glass supplier Biel Crystal postpones $1.5B Hong Kong IPO plan, due to current downbeat market conditions – SCMP
(CN) Negotiators for China and the US have rescheduled talks for G20 Buenos Aires instead of Washington after work level talks between the two sides – SCMP
(CN) China PBoC Open Market Operation (OMO): v skipped prior (17th straight skip)
(CN) China PBoC sets yuan reference rate: 6.9245 v 6.9377 prior
(CN) China Banking and Insurance Regulator (CBIRC) Vice Chairman Zhou: Reiterates financial institutions must support small and private companies; risk in domestic credit market has reduced

Australia/New Zealand

ASX 200 opened flat
(NZ) New Zealand Q3 PPI Input q/q: 1.4% v 1.0% prior; PPI Output q/q: 1.5% v 0.9% prior
(AU) Australia sells A$1.0B v A$1.0B indicated in April 2029 bonds, avg yield 2.6596%, bid to cover 2.56x
(AU) China Commerce Ministry (MOFCOM): Begins anti-dumping probe related barley from Australia
Medibank, [-6%], MPL.AU Was not selected as preferred tenderer for Garrison Health contract, worth ~A$5M in H2
Stanmore coal, [+17%], SMR.AU Golden Investments, Ascend Global Investment Fund SPC and Resources Limited to jointly acquire Stanmore for A$0.95/shr in an off market takeover’ Guides FY19

Other Asia

(TH) Thailand Q3 GDP q/q: 0.0% v 0.6%e; y/y: 3.3% v 4.2%e (slowest growth since early 2017)
(TH) Thailand Planning Agency Revises forecast after weaker than expected Q3 GDP data: Sees 2018 GDP growth 4.2% v 4.2-4.7% projected in Aug

North America

CBS Board could announce merger with Viacom within the next 3-6 months – NY Post
(US) Fed-Fund Futures are implying a 65% probability of 25bps rate hike in Dec 2018 vs 69% on Friday – US financial press

Europe

(UK) PM May Monday speech excerpts: Have an intense week of negotiations ahead of us, expect to hammer out full and final details of future relationship framework this week
(UK) Former Brexit Min Raab: PM May’s plan is fatally flawed, but can be saved; EU is bullying UK, its nearly blackmail – financial press
(UK) PM May: Getting rid of me would risk delaying Brexit, not make talks easier; a delay could also see people try to stop it from happening; as far as I know there is not enough support for a no confidence vote – press
(UK) 42 Tory MPs submit letters of assurance to not support PM May; 25 have publicly said they have sent no confidence letters and 17 privately; leaves 6 votes shy of triggering a no confidence vote – UK press
(UK) EU Brexit Chief Negotiator Barnier has floated the idea of extending Brexit transition by 2 years – UK Press
(UK) Nov Rightmove House Prices m/m: -1.7% v +1.0% prior; y/y: -0.2% v +0.9% prior
(FR) ECB’s Villeroy (France): Asset purchases probably to end in Dec; outlook for Euro area inflation is firmer

Levels as of 12:50ET

Hang Seng 0.0%; Shanghai Composite +0.5%; Kospi +0.2%; Nikkei225 +0.5%; ASX 200 -0.6%
Equity Futures: S&P500 -0.4%; Nasdaq100 -0.3%, Dax -0.3%; FTSE100 -0.4%
EUR 1.1396-1.1421; JPY 112.61-112.85 ; AUD 0.7303-0.7326;NZD 0.6843-0.6874
Dec Gold -0.3% at $1,219/oz; Jan Crude Oil +1.0% at $57.20/brl; Dec Copper -0.9% at $2.77/lb