Equities Trade Mostly Lower After US Declines

Oct 23 19, 07:25 GMT

General Trend:

Japanese equities outperform after holiday, Eisai rises on Alzheimer’s data; Gains in Japan capped by declines in Softbank
Shanghai Property index declines in early trading
Hang Seng underperforms in Asia amid broad-based selling; There has been press speculation that HK’s Lam could eventually be replaced
L’Occitane rises over 16% in HK after reporting Q2 sales, hearing company was upgraded amid the sales figures
LG Display declines ahead of expected earnings report
Telecom Services, Consumer Discretionary and Financial sectors weigh on markets in Australia
Propertyguru becomes latest Aussie company to cancel IPO
AUD/JPY declines amid weakness in equity futures; Australia Oct prelim PMI data due on Thursday
New Zealand Sept trade balance beats ests, stats agency said exports rose mainly on shipments to China [Exports to China were the leading contributor to increases in several commodities including milk powder, beef, and lamb]
PBOC said stepped up cash injections are aimed at offsetting impact of tax payments, ensuring ‘reasonably ample’ banking liquidity
South Korea Q3 prelim GDP data due on Thursday; earnings are expected from Hynix, Hyundai Motor, Posco and Kia Motors
Companies expected to report earnings during NY morning include Boeing, Boston Scientific, Blackstone Group, Caterpillar, Cliffs Natural Resources, Freeport McMoran, General Dynamics, Grainger, Hilton, Eli Lilly, Nasdaq and Silicon Labs

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%
(NZ) New Zealand Sept Trade Balance (NZ$): -1.2B v -1.4Be
(AU) Australia RBA Assistant Gov Kent: End of LIBOR not a risk, the fact that people aren’t ready for it to end is the risk – speaking in Sydney
EXL.AU Announces that non-compliant CBD products were sold by Japan unit; internal investigation will be completed by mid-November
RIO.AU Confirms initiates strategic review of NZ smelter operations
WBC.AU Guides H2 cash profit to be negatively impacted by A$341M due to customer remediation
(AU) Australia sells A$800M v A$800M indicated in 2.75% Nov 2029 Bonds; avg yield 1.1289% v 0.8759% prior; bid to cover 3.10x v 2.27x prior

Japan

Nikkei 225 opened +0.3%
WE Confirms Significant $9.5B Funding from SoftBank Group; Softbank launches $19.19/shr tender offer to shareholders for up to $3.0B as part of package
9064.JP No longer planning to add 10.0K contract delivery workers by the end of FY19/20 – Nikkei
(JP) Japan Econ Min Nishimura: Will not recalculate the economic impact of a trade deal with the US to reflect a continuation of current tariffs on Japanese autos and car parts – Japan press

Korea

Kospi opened -0.1%
(KR) South Korea PM Lee: Have the goal to set the tone for South Korea and Japan to facilitate dialogue when he meets Japan PM Abe – Yonhap
(KR) Analysts note that South Korea continues to enjoy a significant increase in foreign investment in its financial markets that may suggest its economic fundamentals remain strong – Yonhap

China/Hong Kong

Hang Seng opened -0.1%; Shanghai Composite opened -0.1%
(CN) Chinese govt reportedly considering plans to replace Hong Kong Leader Lam with interim Chief Executive – FT
(HK) Hong Kong Leaders office declines to comment on report that Chief Exec Carrie Lam would be replaced
(HK) Hong Kong Finance Chief Paul Chan: Urges Parliament to pass relief measures totaling HK$2.0B as city grapples with the economic fallout of ongoing political turmoil. – 3rd round of measures to support companies
(CN) China PBOC sets Yuan Reference Rate: 7.0752 v 7.0668 prior
(CN) China PBoC Open Market Operation (OMO): Injects CNY200B v injects CNY250B prior in 7-day; Net injects CNY200B v injects CNY250B prior; operation aims to offset impact of tax payment and ensure banking liquidity reasonably ample
(HK) Hong Kong announces HK$100M subsidy to travel agencies – support measures for tourism
(CN) Commerce Sec Ross: Sees a 50/50 or better chance to reaching a trade deal with China, but things can happen at the last minute – FT
973.HK Reports Q2 Rev €374.7M v €298.6M y/y

North America

(US) Weekly API Oil Inventories: Crude: +4.5M v +10.5M prior
(US) Sources in the room for Acting Ukraine Ambassador Taylor’s testimony today say it was revealing; Rep Lynch (D-MA) says its contents could accelerate timeline for Pres Trump impeachment – press
(US) Commerce Sec Ross floated the idea of new talks in November to ease US EU trade dispute, and possibly avoiding future auto tariffs – FT

Europe

(UK) EU’s Tusk: to recommend EU accept UK’s Brexit extension request
(UK) UK govt official: a Brexit delay until Jan 31st would mean the only way to move forward would be an election
(UK) France govt: Brexit deal must be implemented without delay; France is open to a ‘technical’ Brexit extension
(UK) Multiple EU diplomatic sources expect EU to follow Benn Act and likely give a flexible Brexit extension to Jan 31st; could be done in writing which would avoid the extension going through the full EU Council – Sky News

Levels as of 1:20 ET

Nikkei 225, +0.3%, ASX 200 flat, Hang Seng -0.9%; Shanghai Composite -0.1%; Kospi -0.5%
Equity Futures: S&P500 -0.2%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 -0.1%
EUR 1.1133-1.1116 ; JPY 108.52-108.24 ; AUD 0.6863-0.6833 ;NZD 0.6413-0.6385
Gold +0.3% at $1,492/oz; Crude Oil -0.8% at $54.06/brl; Copper -0.4% at $2.624/lb