General Trend:
- Equity markets opened generally higher in Asia, but trading later turned mixed
- Shanghai Composite erased the opening gains amid inflation data release; Declining sectors include Property, Telecom Services and IT
- Shares of China Telecom and China Unicom each rise over 3% in HK, the companies confirmed the 5G cooperation agreement
- Nissan rises over 3% in Japan on CEO change; Japanese banks supported by rise in US Treasury yields
- Australian equities lag on declines in Telecom and Consumer companies; Higher bond yields and News Corp ex-dividend weigh on Telecom sector
- Australian graphite producer Syrah Resources declines over 30%, cut production guidance on lower prices in China
- There is speculation that Trump/Xi could meet in Nov, Trump confirmed trade talks with China to occur next week
- AUD/JPY pared gain on weaker NAB business confidence data; NAB to review its outlook for RBA policy amid business confidence figures
- Government bond yields generally rise in Asia, track move higher in US Treasury yields; ECB decision due on Thursday (Sept 12th)
- Gold Futures trade below $1,500 in the face of higher bond yields
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- SYR.AU Cuts to China electric vehicle subsidies impacting operations and prices: to significantly reduce graphite production to 5.0Kt/month
- (AU) AUSTRALIA AUG NAB BUSINESS CONFIDENCE: 1 V 4 PRIOR; BUSINESS CONDITIONS: 1 V 3 PRIOR
- (AU) Australia sells A$150M v A$150M indicated in 1.25% indexed Feb 2022 bonds, avg yield -0.325%, bid to cover 9.47x v 4.93x prior
Japan
- Nikkei 225 opened +0.2%
- 7201.JP CEO Saikawa resigns, effective Sept 16th; COO Yamauchi to be acting CEO – financial press
- (JP) Japan Econ Min Motegi: Revised GDP data showed private consumption and CAPEX positively contributed to domestic demand
- (JP) Sec of State Pompeo: looking forward to completing US-Japan trade deal at UNGA (UN General Assembly) in NY
- (JP) Japan Business Federation (Keidanren) Chairman Nakanishi: grim outlook for the global economy is weighing on demand and discouraging Japanese companies from investing; Conditions abroad “will be tough going into next year” amid the intensifying US China trade war
- RNO.FR Renault and Nissan said to both be unhappy with existing alliance agreement and are planning to completely revises it – French press
- (JP) Japan Defense Min: North Korea projectile has no impact on national security
- (JP) South Korea reviewing Japan’s status as a trusted trading partner, which may be revoked next week – Korean press
- (JP) Japan Fin Min Aso: Capex showing some weakness lately but remains in an upward trend; need to watch for overseas risks
Korea
- Kospi opened +0.3%
- (KR) North Korea fired 2 unidentified projectiles towards East Sea – Yonhap
- (KR) North Korea said it is willing to resume talks with the US in Sept, however talks could end unless the US takes a fresh approach – press
- (KR) Moody’s: Negative rating actions for South Korea corporates are likely to exceed positive actions over the next 12 months
- 003490.KR Delta increases stake in parent firm, Hanjin KAL, to 9.21% (prior 5.13%)
China/Hong Kong
- Hang Seng opened +0.6%; Shanghai Composite opened +0.1%
- (CN) CHINA AUG CPI M/M: 0.7% V 0.4% PRIOR; Y/Y: 2.8% V 2.7%E; Pork prices y/y: +46.7% v 27% prior; Food CPI: +10% y/y; Non-food: +1.1% y/y; PPI Y/Y: -0.8% v -0.9%e (largest decline since Aug 2016)
- (CN) Fitch: Cuts 2019 GDP outlook to 6.1% (prior 6.2%); Cuts 2020 GDP outlook to 5.7% (prior 6.0%) – Protectionism Choking Global Growth Prospects
- (CN) China PBOC sets Yuan Reference Rate: 7.0846 v 7.0851 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY80B in 7-day reverse repos v injects CNY120B prior; Net CNY80B injects v injects CNY0B prior
- 728.HK Confirms to enter into 5G co-operation agreement with China Unicom to build 5G base stations in 15 cities – US financial press
- 2333.HK Reports Aug vehicle sales 70.2K units v 64.1K units y/y
North America
- F Moody’s cuts Ford’s unsecured rating one notch to junk status; cuts to Ba1 from Baa3; outlook Stable
- (MX) Mexico Finance Min confirms plans to create ‘countercyclical’ or rainy day fund – FT
- (US) Fitch trims US GDP growth forecasts for 2019 and 2020: Trims 2019 GDP growth forecast from 2.4% to 2.3%; Trims 2020 GDP growth forecast from 1.8% to 1.7%
- (US) President Trump confirms talks with China next week – rally
Europe
- (UK) PM Johnson: Will not ask for another Brexit delay; By Corbyn’s own logic he should back an election – speaking in parliament
- (UK) Opposition Labour Party Leader Corbyn: PM Johnson has confirmed he will not follow Brexit delay law; House has expressed its will, no deal Brexit is off the table – speaking to parliament
- (IE) Ireland Aug Consumer Confidence Index: 77.2 v 85.5 prior (lowest since Nov 2013)
- (UK) Parliament votes on early general elections: 293 in favor (needed 434 to move forward) v 46 against (Johnson’s 6th loss in 6 days)
Levels as of 1:20 ET
- Nikkei 225, +0.3%, ASX 200 -0.7%, Hang Seng +0.1%; Shanghai Composite -0.3%; Kospi +0.6%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 -0.1%
- EUR 1.1052-1.1040 ; JPY 107.50-107.18 ; AUD 0.6870-0.6849 ;NZD 0.6443-0.6423
- Gold -0.8% at $1,498/oz; Crude Oil +0.5% at $58.12/brl; Copper +0.4% at $2.638/lb
