General Trend:
- Financials drop in China amid PBoC’s disappointing MLF operation
- Property index outperforms in Shanghai, weaker home price data suggests less need to tighten property market
- Japanese energy firms rise in catchup rally after Monday’s holiday
- Softbank declines on concerns about Wework’s IPO and second Vision Fund, offsets gains in Real Estate firms and Banks
- Tokyo Steel to cut Oct prices (first cut since July)
- Trump confirms US/Japan to enter trade agreement in the coming weeks, Japan Foreign Min wants to confirm in writing that US will refrain from added tariffs on Japan car exports.
- Japan Fin Min said trade agreement with the US will not include currency clause
- LCD companies in focus: Corning reduced outlooks for Display Technologies and Optical Communications units, LG Display confirmed early retirement offers for workers
- Aussie coal miner New Hope declines after earnings, sees coal markets remaining volatile in the near-term
- PBOC leaves MLF rate unchanged despite rate cut speculation, declines to fully rollover MLF
- There remains speculation that the PBOC may cut the loan prime rate (LPR) later this week [The LPR will be set monthly on the 20th of each month, implies Friday Sept 20th]
- Offshore yuan (CNH) declines after weaker yuan fixing
- Hong Kong Chief Exec Lam: To hold meeting with community next week
- RBA Sept Minutes: Upward trend in wages growth appeared to have stalled
- AUD/JPY drops amid RBA minutes release, decline in equity futures
- Brent Futures drop over 1% after Monday’s spike higher
- Asian officials continue to react to Saudi Arabia situation; Japan and Korea express willingness to release oil reserves if needed
- African swine fever spreads to South Korea
- Singapore Aug non-oil domestic exports to China +38.5% y/y, exports to the US and Europe decline
- US Treasury Bond Futures rise ahead of Fed meeting
- US Fed is due to hold policy meeting on Sept 17-18th (Tues-Wed), BoJ to meet Sept 18-19th (Wed-Thursday)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.2%
- (AU) RESERVE BANK OF AUSTRALIA (RBA) SEPT 3RD MEETING MINUTES: BOARD WOULD CONSIDER FURTHER POLICY EASING IF NEEDED TO SUPPORT GROWTH, INFLATION TARGETS
- (NZ) New Zealand Q3 Westpac Consumer Confidence: 103.1 v 103.5 prior (7-year low)
- (NZ) RBNZ Assistant Gov Hawkesby: NZ$ maintains position as 10th most traded currency in the BIS survey (conducted every 3-years); Although our economy is relatively minor compared to the survey participants we are ranked against, the NZ dollar is traded with a disproportionate frequency in global foreign exchange markets
- (AU) AUSTRALIA Q2 HOUSE PRICE INDEX Q/Q: -0.7% V -1.0%E; Y/Y: -7.4% V -7.7%E
Japan
- Nikkei 225 opened -0.2%
- (JP) US President Trump: To enter trade agreement with Japan in the coming weeks; reached agreement regarding tariff barriers with Japan
- (JP) Japan Fin Min Aso: US/Japan trade agreement will not include currency clause
- (JP) Japan Economy Min Nishimura: ‘Lengthy’ oil supply issues would impact Japan’s economy, must also monitor impact on financial markets; No comment on auto tariffs until final trade deal with signed with the US
- 9984.JP Reportedly major investors are considering paring back investments in next Vision Fund following WeWork IPO process – press
- 5423.JP To cut Oct hot rolled price to ¥67K/t (last cut was in July 2019); cuts H-beam prices to ¥83K/t
- (JP) Japan METI Min Sugawara: Japan to work with IEA and other countries on oil reserves; prepared to release oil reserves if necessary
- (JP) Japan Foreign Min Motegi: Will meet with US Sec of State next week at UN, analyzing information on Saudi oil field attack; confirms no new auto tariffs in US/Japan trade deal
Korea
- Kospi opened -0.2%
- (KR) US President Trump: Not inclined to visit North Korea, I’m not ready yet; declines to say whether Kim Jong-un invited him to meet in most recent letter (which is what Korean press reported)
- (KR) South Korea Vice Fin Min Kim: Short term impact from Saudi oil attacks will be limited, considering releasing oil reserves if needed, will act swiftly and sternly if market volatility increases
- (KR) South Korea reports its first case of African Swine Fever, to cull 4,000 pigs as a result – Korean press
China/Hong Kong
- Hang Seng opened -0.7%; Shanghai Composite opened -0.2%
- (CN) CHINA PBOC CONDUCTS CNY200B V CNY265B MATURING TODAY IN 1-YEAR MEDIUM TERM LENDING FACILITY (MLF) OPERATIONS AT 3.3% V 3.3% PRIOR; NET DRAINS CNY145B VIA MONETARY POLICY TOOLS
- (CN) CHINA AUG NEW HOME PRICES M/M: 0.6% V 0.6% PRIOR; Y/Y: +8.8% V +9.7% PRIOR
- (CN) US Trade Rep official: US-China deputy-level trade talks will start on Thurs in Washington, DC (during US session)
- (CN) According to analysts, China should cut MLF rates ‘in time’ to boost economy – China Securities Journal
- (CN) China President Li visiting Russia Sept 16-18th; , China and Russia agreed to lift their relations to a comprehensive strategic partnership of coordination for a new era – China press
- (CN) China PBOC sets Yuan Reference Rate: 7.0730 v 7.0657 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for the 3rd consecutive session
Other Asia
(SG) SINGAPORE AUG NON-OIL DOMESTIC EXPORTS M/M: +6.7% V 2.6%E; Y/Y: -8.9% V -10.2%E; Electronic Exports Y/Y: -25.9% v -24.2% prior
North America
- WE Likely to delay IPO to Oct at the earliest, will not start roadshow this week – US financial press
- GLW Cuts guidance for segments, Display Technologies and Optical Communications for Q3 and FY19, seeing lower than expected demand and capital spending from clients
Europe
- (SA) Saudi Arabia: Initial investigations have indicated that the weapons used in the attack on oil refineries were from Iran; investigation is still ongoing to determine the source of the attack; UN and international experts will be invited to observe
- (IT) Former Italy PM Renzi planning to leave Democrat party (PD) to form his own new party, but has said he will continue to support PM Conte – Italian press
Levels as of 1:20 ET
- Nikkei 225, flat, ASX 200 flat, Hang Seng -1.2%; Shanghai Composite -1.3%; Kospi flat
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.3%, Dax -0.2%; FTSE100 -0.9%
- EUR 1.1014-1.0994 ; JPY 108.37-108.02 ; AUD 0.6871-0.6834 ;NZD 0.6350-0.6324
- Gold -0.4% at $1,505/oz; Crude Oil -1.5% at $61.75/brl; Copper -0.3% at $2.634/lb
