General Trend:
- South Korea Kospi outperforms in early trade as chipmakers gain, BoK held rate decision; Japan said to allow the first exports of hydrogen fluoride to South Korea since Japan tightened export controls on SK in early July [follows move by Japan to resume exports of resist polymers to Korea]
- Technology, Iron/Steel and financial firms are among the gainers in Japan
- Japanese brokerage firms continue to cut trading fees for Nikkei 225 Futures
- Hang Seng underperforms amid reports that multiple activists have been arrested; Hong Kong police are expected to ban the mass rally and march expected to be held on Saturday Aug 31st (press article from Aug 29th)
- ICBC rises in Hong Kong post earnings ; Agricultural Bank of China and Bank of China may report earnings later today
- Two Bank of Korea board members voted for rate cut at today’s meeting; BOK Gov said hard to predict degree of further rate cuts
- BoJ again cut offer to buy 5-10 yr JGBs at daily operation; The central bank may announce Sept bond purchase schedule later today
- Japan and South Korea report better than expected industrial production data in July; Singapore released better July IP data earlier in Aug
- AUD/JPY declines on weaker Australian building approvals data Offshore yuan (CNH) declines after gains on Thursday
- Tariff deadlines in focus: China announced plans to levy 5-10% retaliatory tariffs on $75B of US goods, effective on Sept 1st and Dec 15th (from Aug 23rd); The US is expected to start collecting 15% tariffs on over $125B in Chinese goods on Sept 1st (Sunday)
- US markets are closed on Monday (Sept 2nd) for the Labor Day holiday
Headlines/Economic Data
Australia/New Zealand
- (AU) AUSTRALIA JULY BUILDING APPROVALS M/M: -9.7% V 0.0%E; Y/Y: -28.5% V -22.2%E
- ASX 200 opened +0.7%
- (AU) Australia July Private Sector Credit M/M +0.2% v 0.2%e; Y/Y: +3.1% v 3.2%e
- (AU) RBA releases 2019/20 corporate plan: Household debt could make economy less resilient to shocks; household debt impact could complicate future rate decisions
- (NZ) New Zealand Aug Consumer Confidence Index: 118.2 v 116.4 prior; M/M: +1.5% v -5.1% prior
- (NZ) New Zealand July Building Permits m/m: -1.3% v -4.0% prior
China/Hong Kong
- Shanghai Composite opened +0.6%, Hang Seng +1.2%
- (CN) China Commerce Ministry (MOFCOM) spokesperson Gao Feng: China and US are in effective contact; China and US are discussing about the Sept trade talks; reiterates that its necessary to create conditions for talks (comments from Aug 29th)
- (CN) Pres Trump: reiterates China wants to make a deal; it ‘sort of has to’ make one, US-China trade talks scheduled for today on China at a different level – Fox News Radio interview
- (HK) Hong Kong activist Agnes Chow arrested (third activist leader reported arrested today) – US Financial Press
- (HK) Hong Kong activist Andy Chan arrested – Local Press
- (HK) Hong Kong activist Joshua Wong said to have been arrested – US Financial Press
- (CN) China troops in Hong Kong won’t “sit on hands” if situation worsens – China Daily
- (CN) China PBoC Open Market Operation (OMO): Skips for second consecutive session; Net CNY80B v drain CNY60B prior
- (CN) China PBOC sets Yuan Reference Rate: 7.0879 v 7.0858 prior (weakest since March 2008)
Japan
- Nikkei 225 opened +0.9%
- (JP) Japan said to allow the first exports of hydrogen fluoride to South Korea since Japan tightened export controls on SK in early July [follows move by Japan to resume exports of resist polymers to Korea] – financial press
- (JP) JAPAN JULY JOBLESS RATE: 2.2% V 2.3%E (matches 27-year low)
- (JP) Japan July Preliminary Industrial Production M/M: 1.3% v +0.3%e; Y/Y: +0.7% v -0.6%e
- (JP) Japan July Retail Sales M/M: -2.3% v -0.9%e; Y/Y: -2.0% v -0.7%e
- (JP) Bank of Japan (BOJ) operation related to daily bond buying operation: Cuts 5-10 year JGB purchases to ¥400B v ¥450B prior (as speculated, BoJ has revised bond purchases for 3rd time this month)
Korea
- Kospi opened +0.9%
- *(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50%; AS EXPECTED; Vote was not unanimous (Cho Dong-Chul and Shin In-Seok both voted for rate cut)
- (KR) South Korea July Industrial Production M/M: 2.6% v 0.5%e ; Y/Y: 0.6% v -3.2%e
- (KR) South Korea July semiconductor inventory M/M: +10.9% v-3.3% prior – Stats agency
North America
- (US) National Hurricane Center (NHC): Says Hurricane Dorian found to be strengthening, maximum sustained winds rise to 105 mph; there are no coastal watches or warnings in effect; Dorian is still expected to become a major hurricane on Friday
Levels as of 1:20 ET
- Nikkei 225, +1.2%, ASX 200 +1.4%, Hang Seng +0.6%; Shanghai Composite +0.4%; Kospi +1.7%
- Equity Futures: S&P500 flat; Nasdaq100 flat, Dax +0.1%; FTSE100 +0.2%
- EUR 1.1062-1.1041; JPY 106.54- 106.38; AUD 0.6737-0.6706 ;NZD 0.6319-0.6289
- Gold -0.2% at $1,534/oz; Crude Oil -0.1% at $56.65/brl; Copper +0.1% at $2.579/lb
