General Trend:
- Will the US/China trade talks conclude on Oct 10th or Oct 11? There have been conflicting reports on Thursday about whether the talks will conclude on Oct 11 as scheduled
- Equity futures reverse gains after 22:20 GMT headline from the SCMP on the US/China trade talks; markets later fluctuate amid conflicting reports about US/China talks
- Offshore yuan rises (and reverses losses), US said to be considering previously agreed currency agreement with China as part of trade deal; Aussie tracks gain in yuan
- US President Trump said to allow some US companies to supply non-sensitive goods to Huawei – US press [details remain unclear]
- HK and Chinese equities gain less than 0.5% in the face of the ‘headline roulette’
- Gainers in Japan include the trade-sensitive Marine/Transportation index, financials lag
- Upcoming Japanese retailer earnings in focus, Fast Retailing and 7-Eleven due to report after today’s close
- Declines in chipmakers weigh on South Korea’s Kospi; Large Korean hedge fund said to suspend redemptions from certain funds
- China Commerce Ministry (MOFCOM) sometimes holds its weekly press conference on Thursdays (generally comes during early European morning)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- (AU) AUSTRALIA AUG HOME LOANS M/M: 0.7% V 2.3%E; INVESTMENT LENDING: 5.7% V 3.0%E
- (AU) AUSTRALIA OCT CONSUMER INFLATION EXPECTATION: 3.6% V 3.1% PRIOR
- ORA.AU To sell Australia and new Zealand paperboard packaging operations to Nippon Paper for ~A$1.7B cash
- BXB.AU Reports Q1 Rev from cont op $1.16B v $1.14B y/y
Japan
- Nikkei 225 opened slightly lower
- 7201.JP Planning to cut 1 of the 5 shifts at Sunderland UK factory to restructure for new Juke; no job cuts
- (JP) JAPAN AUG CORE MACHINE ORDERS M/M: -2.4% V -1.0%E; Y/Y: -14.5% V -8.4%E (largest decline since late 2014)
- (JP) Japan Sept PPI (CGPI) M/M: 0.0% v 0.0%e Y/Y: -1.1% v -1.1%e
- (JP) Bank of Japan (BOJ) Dep Gov Amamiya: Asia needs to develop financial markets further, which is crucial for growth; market function critical channel for monetary policy, efforts to enhance the functioning and liquidity of money markets would lead to greater effectiveness
- (JP) Japan Econ Min Nishimura: Will not hesitate to use macro policies if needed
- (JP) Japan LDP Policy Chief Kishida: Want to consider stimulus in the year end budget talks
- (JP) Japan Econ Min Nishimura: Japan has not totally emerged from deflation, making progress thanks to prolonged recovery
- (JP) Japan MoF sells ¥698.6B v ¥700B indicated in 0.4% coupon 30-year JGBs, avg yield: 0.3820% v 0.1400% prior, bid to cover 3.87x v 3.45x prior
Korea
- Kospi opened -0.8%
- (KR) US President Trump implied that he speak to North korea leader Kim by phone in addition to their letters – Yonhap
- (KR) South Korea’s largest hedge fund, Lime Asset Management, suspended redemption from some of its funds worth KRW620B – Korean press
- 005930.KR South Korea Pres Office: Confirms that Samsung Display will invest KRW13.1T over next 6 years; KRW10T on facilities and KRW3.1T on nextgen display research
China/Hong Kong
- Hang Seng opened -0.2%; Shanghai Composite opened flat
- (CN) US is said to be considering previously agreed currency agreement with China as part of trade deal, which could see next tariff increase cancelled under first part of trade deal with China – US financial press
- (CN) White House: Not aware that Vice premier Liu He has changed his travel plans – tweet by CNBC reporter @kaylatausche
- (CN) China and US deputy-level trade talks said to make no progress on key trade issues; China delegation refuses to discuss forced technology transfers; China delegation to leave Washington on Thursday after just one day of principal-level talks – SCMP
- (CN) Pres Trump: told China Pres Xi trade agreement cannot be 50/50 deal, China has to give more; believe China wants a deal more than I do; would love to make a deal if its the right deal
- (CN) China planning retaliatory tighter visa restrictions for US nationals with ties to anti-China groups – US financial press
- (CN) Vice President Pence: Will demand China open its markets, deal with IP and force tech transfer issues as part of trade talks
- 1113.HK Offering flats in Hong Kong priced up to 10% lower than rival in the same market – SCMP
- (CN) China PBOC sets Yuan Reference Rate: 7.0730 v 7.0728 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for the 4th consecutive session; Net drains CNY20B v CNY20B drain prior
- HUAWEI.CN President Trump said to allow some US companies to supply non-sensitive goods to Huawei – US press
Other
- (TR) Sens Van Hollen (D-MD) and Graham (R-SC) reach agreement on Turkey sanctions; issue list of sanctions, which include actions against Turkish leadership, such as Pres Erdogan
- (TR) UN Security Council to hold emergency meeting on Thursday related to Turkey attack into Syria
North America
- (US) Commerce Sec Ross: China trade practices have gotten worse; US is not opposed to trade with China; US would prefer not to use tariffs but tariffs are forcing China to pay attention to our concerns – speaking from Sydney, Australia
- (US) FOMC MINUTES FROM SEPT 18 MEETING: TRADE UNCERTAINTY HAS INCREASED, GLOBAL GROWTH PROSPECTS WEAKENED, AND GEOPOLITICAL RISKS INTENSIFIED SINCE JULY
- PCG Judge rules in favor of PG&E bondholders, allows a competing reorganization plan to proceed; taking away exclusive control over restructuring – press
- BBBY Names Mark J. Tritton as President and CEO, effective Nov 4th
- AAPL Says police-tracking app was used by criminals to victimize HK residents in areas with no police; removing it from the app store
- BA Discloses that 36 of the Boeing 737 Next Generation models showed evidence of cracks in a structure connecting the wings to the fuselage out of 686 that were inspected – press citing email from company
Europe
- (UK) Opposition Labour Party Leader Corbyn will back Nov 26th election is Brexit is delayed – Sun
- (US) Fed said to drop toughening liquidity rules for foreign banks – US Financial Press
- (EU) ECB’s Draghi said to have ignored in-house advice on decision to restart QE – Financial Press
- (UK) Ireland PM Varadkar and UK PM Johnson to meet in northwest England today to see if they can find a Brexit compromise – press
Levels as of 01:20ET
- Nikkei 225, +0.3%, ASX 200 flat, Hang Seng +0.5%; Shanghai Composite +0.5%; Kospi -0.5%
- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 +0.1%
- EUR 1.0994-1.0969 ; JPY 107.77-107.02 ; AUD 0.6757-0.6709 ;NZD 0.6318-0.6276
- Gold +0.1% at $1,514/oz; Crude Oil -0.2% at $52.50/brl; Copper +0.4% at $2.579/lb
