General Trend:
- China Vice Agriculture Minister’s cancellation of planned visit to US farm states had nothing to do with the trade talks (Chinese Press);
- On Sept 20th, it was then reported that the Montana Farm Bureau said the China delegation that was visiting the US last week (Sept 19-20th) for low-level trade talks had cancelled its farm visit to Montana
- Broad-based selling seen in Shanghai amid PBOC’s open market operations, declines led by telecom and financial sectors
- Hang Seng tracks weakness in Shanghai, Apple supplier AAC Technologies declines following gains seen last week
- Near-term rate cut expectations support consumer stocks in Australia
- Indian equities extend gains after Friday’s corporate tax cut announcement related to domestic manufacturing firms, outsourcing firms however continue to decline
- Nikkei 225 closed for holiday
- South Korea exports are on track for the 10th straight decline in Sept; Sept 1-20 Chip exports -39.8% y/y, exports to China -29.8%
- NZD rises, New Zealand Shadow Board recommended no change in rates at the Sept 25th (Wed) RBNZ cash rate decision (in line with consensus)
- Asian companies react to the planned liquidation of UK travel firm Thomas Cook
- WeWork remains in the headlines
- RBA Gov Lowe is due to deliver his ‘An Economic Update’ speech on Sept 24th (Tues) at 8:05 PM local time (10:05 AM GMT)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened slightly lower
- (AU) Australia Sept Preliminary PMI Manufacturing 49.4 v 50.9 prior (first decline or reading below 50 since the survey started in May 2016)
- (AU) Australia CFR: Welcomes recent progress banks have made in lengthening maturity of offshore term debt; further lengthening still needed to reduce rollover risk for banks and financial systems; Discussed package of possible regulatory reforms for financial market infrastructure to be released later in 2019
- (NZ) New Zealand Shadow Board recommends no change to RBNZ cash target rate this week
- STO.AU Completed Baxter flow test in Dorado-3 exceeds expectations
Japan
- Nikkei 225 closed for holiday
- 8058.JP Petro-Diamond (unit) to record loss of ~$320M from trade of crude oil derivative; investigating how the losses at the unit will impact FY19 forecasts (Friday after the close)
- (JP) Japan said to be planning to not offer US tariff exemptions for rice in upcoming trade deal – Nikkei
- 5020.JP Notified by Saudi Aramco about a change in shipments of crude from light to heavy and medium grades from October – Nikkei
Korea
- Kospi opened -0.2%
- (KR) South Korea Sept 1-20 Exports y/y: -21.8% v -13.3% prior; Chip Exports y/y: -39.8% v -30.7% prior
China/Hong Kong
- Hang Seng opened +0.1%; Shanghai Composite opened -0.3%
- (CN) China and US deputy level talks were constructive and they agreed to continue talks on relevant issues – China state press
- (CN) China manufacturers are actively looking at real estate space in Thailand amid US tariffs – regional press
- (CN) China Vice Agriculture Minister’s cancellation of planned visit to US farm states had nothing to do with the trade talks – Chinese Press
- (CN) China PBOC sets Yuan Reference Rate: 7.0734 v 7.0730 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day and 14-day reverse repos v CNY120B prior in 7-day and 14-day; Net injection CNY100B v CNY120B injected prior
- (CN) China policymaker Li Deshui: Certain US demands made during trade talks in May wanted to “colonize” China’s economy – SCMP
North America
- (US) President Trump: “Go across the world and you’ll see either very low interest rates, or negative rates. The President wants to be competitive with these other countries on this, but I don’t think he’ll fire Jay Powell (even if I should!).” We should always be paying less interest than others! – tweet
- CE Issues update on Clear Lake Plant restart following fire: Notes the company experienced incident on Sept 21st at its Clear Lake facility in Pasadena (Texas); Notes its unit operations including acetic acid and vinyl acetate are down, Fairway methanol unit is idle
- GM: Strikes enter their second week, talks to resume Monday
Europe
- DBK.DE Said to be close to a deal to transfer €100B prime brokerage assets to BNP, deal could be announced Monday
- (EU) ECB’s Vasle (Slovenia): Economic conditions are very complicated, likely a need for further ECB action
- (UK) PM Johnson and US President Trump have agreed to reaching a very quick UK/US trade agreement by July 2020 – UK press
Levels as of 01:20ET
- Hang Seng -0.9%; Shanghai Composite -1.4%; Kospi -0.1%; Nikkei225 closed; ASX 200 +0.4%
- Equity Futures: S&P500 +0.4%; Nasdaq100 +0.5%, Dax +0.3%; FTSE100 +0.2%
- EUR 1.1010-1.1026; JPY 1.07.61-107.75 ; AUD 0.6765-0.6782; NZD 0.6263-0.6278
- Commodity Futures: Gold +0.5% at $1,522/oz; Crude Oil +1.1% at $58.70/brl; Copper +0.4% at $2.60/lb
