HomeContributorsFundamental AnalysisAsian Indices Trade Mixed On Lingering Trade Uncertainty

Asian Indices Trade Mixed On Lingering Trade Uncertainty

General Trend:

  • Shanghai Composite lags in early trading after prior session’s outperformance, decliners include IT companies and financials
  • Hang Seng underperforms amid protest-related concerns; Tencent drops after report about Chinese probe into Tencent Music
  • Automakers rise in HK as China announced measures to increase the consumption of autos
  • ZTE rises after earnings report and guidance
  • Air China and China Construction Bank may report earnings later today
  • HSBC announces measures to support SMEs in HK
  • Financials decline in Japan amid drop in gov’t bond yields, continued inversion of US Treasury curve; TOPIX Real Estate index outperforms
  • Aussie telecom index weighed down by Telstra’s ex-dividend
  • Australian earnings in focus: Cautious outlooks weigh on shares of Virgin Australia and Bellamy’s
  • Financial Macquarie plans to raise A$1.0B in share offering , proceeds to be used for new investments and the meeting of capital requirements
  • Australia Q2 construction work done declines more than expected, some say the data could suggest downside risk to the RBA’s growth forecast
  • Yuan fixed stronger than expected, but still weakest CNY fixing since March 2008
  • Japan’s previously announced move to remove South Korea from its trusted export ‘white list’ took effective today; South Korea announced plans to spend KRW5.0T on certain materials and parts (press)
  • Gold Futures decline after gains on Tuesday
  • Tobacco giants Philip Morris and Altria in talks regarding $200B all-stock merger
  • There is speculation that lower yields/flatter curve will cause the BoJ to reduce 5-10 yr JGB purchases at Friday’s operation
  • BoJ board member Suzuki may speak on Thursday

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened flat
  • (AU) AUSTRALIA Q2 CONSTRUCTION WORK DONE Q/Q: -3.8% V -1.0%E
  • (AU) US Dept of Defense has been in talks with Australia on hosting a facility that will process rare earth and reduce reliance on China – press
  • FCG.NZ Reports July Milk Collections y/y: +2.2% v 13.9% prior
  • MQG.AU Announces A$1.0B institutional placement (2.5% of shares outstanding); Guides H120 results to be up ~10% y/y, but down vs H219, Affirms FY20 Net ‘slightly down’ y/y
  • VAH.AU Reports FY19 (A$) Net -349.1M v -681.0M y/y; Underlying pretax -71.2M v +64.4M y/y, Rev 5.83B v 5.42B y/y; Names Keith Neate as CFO; to cut 750 jobs resulting in savings of A$75M by FY20 (30% cut to corp and head office workforce)
  • (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Monetary policy remains as effective as ever; monetary policy needs to be partnered with fiscal policy – Op Ed
  • (AU) Australia sells A$800M v A$800M indicated in 2.50% May 2030 bonds, avg yield 0.8989% v 0.9868% prior, bid to cover 2.70x v 3.69x prior

Japan

  • Nikkei 225 opened +0.1%
  • (JP) Japan auto part makers locked in indecision as uncertainty remains around future of NAFTA and US tariffs, wondering if they should change their supply chains or leave them as is in order to serve the US market – Nikkei
  • (JP) Japan Fin Min Aso, Chief Cabinet Sec Suga are expected to keep their positions amid cabinet reshuffle in September – Japan press
  • 9433.JP Confirms mobile plan with a reduced ¥1,000 cancellation fee, unlimited data and a Netflix subscription, to launch Sept 13th
  • (JP) Nomura sees Bank of Japan (BOJ) cutting bond purchases of 5-10 year JGBs Friday

Korea

  • Kospi opened +0.3%
  • 005380.KR Union tentatively approves wage deal without strike – Yonhap
  • (KR) South Korea planning to spend KRW5.0T on materials and parts for 3-years – Korean press
  • (KR) Reminder today Japan exclusion of South Korea from whitelist of trading partners goes into effect

China/Hong Kong

  • Hang Seng opened +0.4%; Shanghai Composite opened flat
  • (CN) US Federal Register confirms US to raise tariffs on $300B of China goods from 10% to 15%, effective Friday Aug 30th
  • (CN) On Sept 2nd, China is expected to take the 2nd batch of tariff exemption applications – US financial press
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY60B v Injects CNY80B prior; Net nil v injects CNY30B prior
  • (CN) China PBOC sets Yuan Reference Rate: 7.0835 v 7.0810 prior
  • (CN) China Foreign Ministry spokesperson Geng Shuang: reiterates stance that have not heard of weekend telephone calls between US and China on trade (after the close yesterday)
  • ZTE, 000063.CN Reports H1 (CNY) Net 1.47B v 1.39Be, Rev 44.6B v 45.6Be
  • (CN) China said to have denied request for US Navy warship to visit Qingdao in recent days – financial press
  • (CN) 20 provinces in China said to have used nearly all their local special bond (LGSB) issuance quota and may use unused quota from last year to finish this year – Shanghai Securities
  • (CN) Follow Up: China PBoC may issue its own cryptocurrency by as early as Nov 2019 – Forbes

North America

  • (US) Weekly API Oil Inventories: Crude: -11.1M v -3.5M prior
  • (US) US Fed issued statement following publication of Op-Ed by former NY Fed President Dudley: Federal Reserve policy decisions are guided solely by its congressional mandate, reiterates political considerations play absolutely no role – financial press

Europe

  • (UK) UK govt reportedly plans to announce next spending round on Sept 4th – FT
  • (UK) Aug BRC Shop Price Index: Y/Y -0.4% v -0.1% prior

Levels as of 1:20 ET

  • Nikkei 225, +0.1%, ASX 200 +0.4%, Hang Seng -0.1%; Shanghai Composite -0.4%; Kospi +0.7%
  • Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 -0.1%
  • EUR 1.1095-1.1085 ; JPY 105.89-105.65 ; AUD 0.6762-0.6734 ;NZD 0.6368-0.6345
  • Gold -0.4% at $1,545/oz; Crude Oil +1% at $55.48/brl; Copper +0.1% at $2.557/lb
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