Equities Opened Generally Lower After US Declines

Sep 27 19, 06:31 GMT

General Trend:

Over 1,100 Japanese companies trade ex-dividend on today’s session
Nikkei underperforms, Softbank drops in the face of the recent Wework headlines; Decline in Treasury yields weigh on Japanese financials
Utility Kansai Electric drops over 7%, certain executives said to have taken payouts from a politician
Toyota speculated to plan to raise stake in Subaru (Japanese press)
Australian equities rise after underperformance on Thursday
Micron declines over 6% post earnings/guidance
FTSE Russell declines to add China to its World Government Bond Index (WGBI)
Japan sells 2-yr JGBs at lowest bid to cover since 2015, yield declines
China markets will be closed for the National Day/Golden Week holiday from Oct 1-7th, Hong Kong markets will be closed on Oct 1st and Oct 7th

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.5%
(AU) Morgan Stanley suggests the Oct 1st RBA cash rate decision may be a close call, notes RBA may be waiting to see more economic data
(AU) Australia Aug Job Vacancies: -1.9% v -1.1% prior
(NZ) New Zealand Sept Consumer Confidence Index: 113.9 v 118.2 prior; M/M: -3.6% v +1.5% prior (4-year low)
(NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Aggressive bank lending has fueled agriculture debt
(NZ) Reserve Bank of New Zealand (RBNZ): Has invested $100M into Green bonds, funded the investment from foreign reserves portfolio

China/Hong Kong

Shanghai Composite opened flat, Hang Seng -0.3%
(CN) CHINA AUG INDUSTRIAL PROFITS Y/Y: -2.0% V +2.6% PRIOR; YTD Y/Y: -1.7% V -1.7% PRIOR
(CN) US official: US is unlikely to extend its temporary waiver for supplying Huawei – press
(CN) FTSE Russell: China onshore government bonds to remain on Watch List for potential upgrade to market accessibility Level 2
(CN) China PBoC Open Market Operation (OMO): Injects CNY30B in 14-day reverse repos v CNY20B prior in 14-day; Net drains CNY10B v CNY100B drains prior
(CN) China PBOC sets Yuan Reference Rate: 7.0731 v 7.0729 prior

Japan

Nikkei 225 opened -0.5%
(JP) Japan Sept Tokyo CPI Y/Y: 0.4% v 0.5%e; CPI Ex-Fresh Food Y/Y: 0.5% v 0.6%e (lowest core reading since 2018)
(JP) Japan MoF sells ¥2.0T v ¥2.0T indicated in 0.10% 2-year JGBs, avg yield: -0.333% v -0.311% prior, bid to cover 3.75x (lowest since 2015) v 5.40x prior
Foreigners sold a record ¥3.15T in Japan bonds last week.
(JP) Japan Trade & Industry Min Sugawara: Monitoring closely after China fund pulled Japan Display support; If Kansai Electric reports are true, it’s ‘outrageous;’ have summoned executives from Kansai to provide an explanation

Korea

Other

(IN) India Capital Market Regulator SEBI: Decided to review extant position limits in interest rate derivatives; Banks and primary dealers dealing as clients shall have same position limits as are applicable to trading members; Position limits have been revised for interest rate derivatives falling in 8-11 years residual maturity bucket (from Sept 26th)
(MY) FTSE Russell: Malaysia to remain on Watch List for potential downgrade from market accessibility Level 2

North America

(US) House Intelligence committee releases the whistleblower complaint, which alleges multiple sources said Trump used his office to solicit foreign interference in 2020 election; IG says complaint “appears credible” and preliminary investigation supports that conclusion; whistleblower was not a direct witness to the call and may have “arguable political bias”
(US) White House statement: nothing has changed with the release of the whistleblower complaint, it shows nothing improper; Pres Trump has nothing to hide
New York Fed accepts $50.1B of 50.1B in bids submitted in overnight repo operation (smaller than the max $100B repo)
New York Fed to maintain repo operation sizes at $60B for term repo, $100B for overnight repo
Jefferies [JEF]: Reports Q3 $0.15 v $0.55 y/y, Rev $857M v $1.15B y/y [Fixed Income Sales and Trading volumes were quite strong during June and July, but downward moves in interest rates during August reduced volumes for much of the last month of our fiscal quarter]
Wework [WE]: S&P cut rating one notch to B- from B; outlook Negative

Europe

(EU) ECB’s Lane (Ireland, chief economist): ECB package was not all that large; We have scope for further rate cuts if necessary
(EU) EU’s Juncker: Doing all we can to get Brexit deal, if we don’t it will be Britain’s responsibility
(UK) Three cabinet members reportedly plan to request that PM Johnson lower his Brexit demands – UK’s Sun
(UK) Sept GfK Consumer Confidence: -12 v -14e
Norsk Hydro [NHY.NO]: Announces Brazil Federal Court has lifted final embargo on Alunorte deposit area

Levels as of 1:20 ET

Nikkei 225, -1.3%, ASX 200 +0.4%, Hang Seng -0.2%; Shanghai Composite +0.1%; Kospi -1.4%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 +0.1%
EUR 1.0924-1.0904 ; JPY 107.85-107.66 ; AUD 0.6764-0.6743 ;NZD 0.6302-0.6282
Gold -0.1% at $1,513/oz; Crude Oil -0.6% at $56.09/brl; Copper +0.3% at $2.584/lb

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