General Trend:
- Xerox said to consider cash and stock offer for HP Inc (US financial press)
- Gainers in Japan include banks after rise in Treasury and JGB yields, decliners include Real Estate companies
- Japanese telecom NTT drops over 4% after announcing earnings and stock split, weighs on sector
- Softbank Group is expected to issue results later today amid writedown speculation
- Toyota Motor is expected to report earnings tomorrow (Nov 7th)
- Shanghai Composite declines in early trading as property and IT shares drop
- Chinese hog farming companies decline, WH Group drops in Hong Kong; Canada PM said China is lifting its ban on beef and pork shipments from Canada
- Postal Savings Bank of China prices $4.7B A-share offering (said to be largest A-share offering in 4 years)
- Hong Kong Exchanges reported Q3 results declined, noted reduced cash market trading volumes
- Geely declines after broker downgrade
- Australian equities weighed down by Consumer and Telecom Services stocks amid rise in bond yields
- Virgin Australia announced plans to suspend its Melbourne to Hong Kong route amid political situation in HK
- Japan Services PMI contracted for the first time since 2016, consumption tax hike and typhoon impact were noted
- China PBoC set yuan at strongest level since early Aug; USD/CNH moved below the 7 level
- China Finance Ministry sold €4.0B in 7, 12 and 20-year bonds [total bids were said to exceed €19.5B]
- China International Import Expo (CIIE) is being held from Nov 5-10th
- MSCI November Semi-Annual Index Review Announcement Scheduled for November 07, 2019 (Thursday)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.2%
- (NZ) NEW ZEALAND Q3 UNEMPLOYMENT RATE: 4.2% V 4.1%E; Employment Change Q/Q: 0.2% v +0.2%e ; Y/Y: 0.9% v 0.9%e; Kiwi slightly weaker then unchanged
- (NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: +3.7% v +0.5% prior
- (AU) Australia sells A$800M v A$800M indicated in 2030 bonds; avg yield 1.2603% v 1.0742%; bid to cover 3.56x v 2.17x prior
- VAH.AU Guides H2 group domestic capacity -2%; sees continued softness in the market; suspends Melbourne to Hong Kong route due to under-performance – AGM
- (AU) Australia Federal Communications Min Fletcher confirms govt will not pursue further relaxation of media ownership laws for the time being
Japan
- Nikkei 225 opened +0.4%
- (JP) Japan FSA planning to ban cryptocurrency investment trusts – Nikkei
- (JP) Bank of Japan (BOJ) minutes from Sept policy meeting (two meetings ago): Appropriate to persistently continue with current powerful easing
- (JP) Japan Oct Final PMI Services: 49.7 v 50.3 prelim (first contraction or reading below 50 since Sept 2016)
- (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.099% v -0.158% prior, bid to cover 3.62x v 3.42x prior
Korea
- Kospi opened flat
- (KR) South Korea Sept Current Account: $7.5B v $5.3B prior (11-month high); Balance of Goods (BOP): $8.8B v $4.8B prior
- (KR) Foreigners have turned net buyers of KOSDAQ for the first time in 6-months
- 005930.KR Unveils the Galaxy Fold at China International Import Expo (CIIE), ahead of its official launch later this week
- (KR) South Korea Trade Ministry: South Korea and New Zealand will seek to forge deeper economic ties on the back of free trade agreement (FTA) signed 4-years ago
China/Hong Kong
- Hang Seng opened -0.2%; Shanghai Composite opened flat
- (CN) China Communist Party issues statement on state media: will establish “robust” national security apparatus for Hong Kong, no details provided
- (CN) China PBOC sets Yuan Reference Rate: 7.0080 v 7.0385 prior (strongest fix since early Aug)
- (CN) China PBoC Open Market Operation (OMO): Skips for 8th consecutive session; Net drains nil
- (CN) China Finance Ministry issues final pricing for 7-year, 12-year and 20-year EUR denominated bonds [first EUR denominated issuance since 2004]
- (CN) China PBoC Official: Jan-Sept cross border yuan usage above CNY14.0T, +20% y/y
- (CN) China National Development and Reform Commission (NDRC): Small coal mines added to list of obsolete industries; Adds human resources, AI, elderly care, child care, housekeeping to the list of encouraged industries
- (CN) China PBOC Official: China digital currencty will need to observe all existing rules for cash and forex management; any stable coins accepted in China will need to observe FX rules;
- Digital currency aiming to substitute paper currency and have no implications for monetary policy
- (HK) Hong Kong Chief Exec Lam: Basic task for HK govt is to restore order; Govt will also deal with problems in the economy
North America
- (US) Fed’s Kashkari (dove; non-voter): US interest rates are now modestly accommodative
- (CA) Canada PM Trudeau: China is lifting ban on beef and pork exports
- (US) State and Local Election Results: Democrats have taken Virginia Senate and House for the first time in 20-years
- HPQ Xeorx considers cash and stock takeover offer – US Financial Press
Europe
- (UK) PM Johnson spokes to Pres Trump today, asking him to lift tariffs on UK goods – press
Levels as of 01:20ET
- Hang Seng +0.0%; Shanghai Composite -0.2%; Kospi +0.2%; Nikkei225 +0.1%; ASX 200 -0.6%
- Equity Futures: S&P500 -0.0%; Nasdaq100 +0.0%, Dax -0.1%; FTSE100 -0.3%
- EUR 1.1067-1.1080; JPY 109.00-109.19; AUD 0.6886-0.6901; NZD 0.6365-0.6385
- Commodity Futures: Gold +0.2% at $1,487/oz; Crude Oil -0.4% at $56.98/brl; Copper -0.1% at $2.69/lb
