Equities Open Higher After US Gains

Sep 12 19, 06:21 GMT

General Trend:

Trump’s move on tariffs comes ahead of the expected trade talks in mid-Sept and early Oct; Trump called the recent move by China to issue tariff exemptions a ‘good gesture’
There has been renewed press speculation that China is considering buying more US farm goods as ‘goodwill’ gesture ahead of trade talks
Trade-sensitive Marine/Transportation index rises in Japan, financials lag after gains on Wed
Japanese e-commerce firm Zozo rises over 15%, received offer from Yahoo Japan for 50.1% stake
Hang Seng underperforms after rise on Wed, Hong Kong Exchanges declines over 3% after launching bid for LSE
Anheuser –Busch InBev resumed process for HK IPO; In July, the company said it would cancel the IPO on market conditions
Shanghai Property index rises over 1.5%, Chinese regulator said to not plan to curb new loans for properties
BoJ Gov Kuroda and PM Abe met earlier today, Kuroda said the officials did not talk about negative interest rates [BoJ is due to hold policy decision on Sept 18-19th]
AUD/JPY supported by Trump’s tariff deadline delay related to China
US 30-year Treasury Futures decline in Asia, add to Wed’s losses; ECB due to hold rate decision later today
China Commerce Ministry (MOFCOM) sometimes holds its weekly news conferences on Thursday’s (generally seen during the European morning)
Chinese markets will be closed on Friday for the Mid-Autumn Festival holiday, South Korea and Taiwan to also be closed for holidays

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
SML.NZ Reports FY19 (NZ$) Net 82.2M v 74.6M y/y; Rev 1.02B v 1.03Be; EBITDA 152M v 160Me
(AU) AUSTRALIA SEPT CONSUMER INFLATION EXPECTATION: 3.1% V 3.5% PRIOR

Japan

Nikkei 225 opened +0.8%
3092.JP Confirms Yahoo Japan to acquire majority 50.1% stake at ¥2,620/shr for total ¥400.7B; Yahoo Japan trade name will be changed to “Z Holdings Corporation” on October 1, 2019
(JP) JAPAN JULY CORE MACHINE ORDERS M/M: -6.6% V -8.0%E; Y/Y: 0.3% V -3.7%E
(JP) Japan Aug PPI (CGPI) M/M: -0.3% v -0.2%e Y/Y: -0.9% v -0.8%e (third consecutive decline)
(JP) Japan Environment Min Koizumi: Japan should stop using nuclear power
(JP) Bank of Japan (BOJ) Gov Kuroda: Did not talk about negative interest rates with PM Abe, exchanged views on economy and financial markets, Abe did not comment on monetary policy

Korea

Kospi closed for holiday
(KR) Analysts note departure of US National Security Advisor Bolton may bring flexibility to the upcoming nuclear talks with North Korea but could undercut efforts to achieve the regime’s complete denuclearization

China/Hong Kong

Hang Seng opened +0.5%; Shanghai Composite opened +0.3%
(CN) US PRESIDENT TRUMP TO DELAY TARIFF INCREASE TO 30% (PRIOR 25%) ON $250B OF CHINA GOODS TO OCT 15TH (PRIOR OCT 1)
(CN) China plans to introduce measures to attract long-term stock funding; may ease limits on pension and insurers stock investments – China Press
293.HK CEO Tang: To freeze hiring , take steps to reduce costs and delay non-core spending – letter to employees in HK press
(US) American Chamber of Commerce in Shanghai survey shows 61% remain optimistic about their business’ China fortunes over the next 5-years (lowest level since 2015) v 80% y/y
(CN) China PBoC Open Market Operation (OMO): Skips v injects CNY30B in 7-day reverse repos prior; Net CNY0B injects v injects CNY30B prior
(CN) China PBOC sets Yuan Reference Rate: 7.0846 v 7.0843 prior
(CN) China regulator will not curb new loans for properties – China Securities Journal
(CN) China cuts tax rate for rare earth miners to 20% (prior 27%), effective Sept 2020
(CN) China considers US farm imports as goodwill before talks
(CN) China Cyberspace Administration (Top internet regulator) said online AI algorithms will promote ‘mainstream values’ – SCMP

Other Asia

(SG) Singapore Trade Min Iswaran: Singapore looks forward to completing trade agreement with EU

North America

(US) White House comments that Pres Trump has ruled out unilaterally indexing capital gains taxes to inflation
ORCL Guides Q2 $0.88-0.90 ($0.87-0.89 including FX headwind) v $0.91e, Rev (cc) +1-3% (including FX headwind 0-2%) v +2.5%e – earnings call
YELP Said to be a possible target for Groupon, who is looking for acquisitions; see synergies of >$200M – US press
(US) Sec of State Pompeo: President Trump could meet with no preconditions with Iran President Rouhani at UN
(CN) Pres Trump China made a ‘good gesture’ when they excluded some US products from tariffs
(US) US President Trump tweets: The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet

Europe

(UK) Bank of England (BOE) Vlieghe: If you change BOE 2% inflation target, could create higher perceived risk that it will be changed again in the future
(EU) ECB sources: ECB to cut some growth projections; sees both 2019 and 2020 GDP expansion not much above 1%
(UK) Fin Min Javid: I am absolutely convinced we can still get a Brexit deal
LSE.UK Receives proposal by HKEX to combine two companies in cash-stock deal; offer values LSE at £29.6B; Proposed transaction implies 8,361p for each LSE share
ABI.BE Asia Pacific Subsidiary (ex Australia), Budweiser APAC, resumed application for HK IPO

Levels as of 1:20 ET

Nikkei 225, +0.9%, ASX 200 +0.2%, Hang Seng -0.3%; Shanghai Composite +0.4%; Kospi closed
Equity Futures: S&P500 +0.4%; Nasdaq100 +0.6%, Dax +0.3%; FTSE100 +0.5%
EUR 1.1016-1.0997 ; JPY 108.10-107.77 ; AUD 0.6882-0.6848 ;NZD 0.6430-0.6409
Gold -0.1% at $1,501/oz; Crude Oil +0.8% at $56.22/brl; Copper +0.7% at $2.643