Financials Decline In CN And HK

Sep 02 20, 05:47 GMT

General Trend:

Australian equities outperform after lagging during prior session, gainers include Telecom, Consumer, Resource and Financial firms
Equity markets in Shanghai and HK lag
Shanghai IT index drops as China’s Chip Fund is said to plan to lower stake in JCET Group [600584.CN]
Financials also move lower in Shanghai and HK
Japanese sectors trade mixed; Decliners include Air Transportation and Insurance firms; Electric Appliances, Marine Transportation and Retail indices gain
Fast Retailing is due to report Aug domestic sales after the Nikkei close
US Aug ADP jobs data due later today

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.3%
(AU) AUSTRALIA Q2 GDP Q/Q: -7.0% V -6.0%E (ENTERS TECHNICAL RECESSION FOR FIRST TIME SINCE THE 1990S, LARGEST DROP ON RECORD); Y/Y: -6.3% V -5.1%E
(AU) Australia Treasurer Frydenberg: Victoria Lockdown will weigh ‘Heavily’ on Q3 GDP; Q3 will be ‘slightly negative’ or flat; Announcements on any tax cuts will be in Australia Oct budget
(AU) Victoria state (Australia) reports 90 additional coronavirus cases v 70 prior; 6 additional deaths
(AU) Reserve Bank of Australia (RBA) Skips offering to buy bonds v A$2.0B prior
(AU) Australia sells A$2.0B v A$2.0B indicated in 0.25% Nov 2025 bonds, avg yield 0.4812%, bid to cover 5.2x
AMP [AMP.AU]: Board will undertake a portfolio review of the Group’s assets and businesses
(NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: No concern with exchange rate; Need to be aware of financial stability consequences of policy
(NZ) New Zealand Q2 Terms of Trade Index Q/Q: 2.5% v 0.6%e; Higher export prices for dairy, kiwifruit, and logs in the June 2020 quarter helped push overall export prices to their highest level since the series began
(NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$430M v NZ$470M prior in government bonds as part of QE v NZ$430M sought

China/Hong Kong

Hang Seng opened +0.2%, Shanghai Composite +0.3%
(CN) China PBOC sets Yuan reference rate: 6.8376 v 6.8498 prior (Strongest since May 14th, 2019)
Hong Kong Monetary Authority (HKMA) increased currency intervention to HK$12.1B from ~HK$9.7B earlier today as HKD continues to trade at strong end of trading band (Sept 1st)
(CN) JCET Group [600584.CN] said to note that China Chip Fund plans to cut stake in the co. by up to 2% – US financial press
(US) USTR extending section 301 China tariff exemptions for smart watches, fitness trackers, wireless audio devices through Dec 31st (from Sept 1st)
CanSino [6185.HK]: Enters into agreement with NPO Petrovax Pharm, LLC to conduct phase III clinical trial for Coronavirus vaccine in Russia
(CN) China PBoC Open Market Operation (OMO): Injects CNY20B in 7-day reverse repos v Injects CNY20B in 7-day prior
(CN) China Finance Ministry (MOF) Sells 3-year and 7-year bonds; 3-year bonds at 2.9415% v 2.87%e; 7-year bonds at 3.1912% v 3.12%e
(HK) Hong Kong reported to be reopening Gyms and massage parlors when current social distancing measures expire Thursday (Sept 3rd)- Press

Japan

Nikkei225 opened +0.5%
Softbank Corp [9434.JP]: To replace Nippon Kayaku in Nikkei 225 index (from Sept 1st)
(JP) Japan Chief Cabinet Sec Suga: To meet with Press on Wednesday evening (Sept 2nd at 8 GMT) and declare candidacy for leader of ruling LDP Party
(JP) Japan Ruling LDP Party formally confirms leadership elections for Sept 14th (In Line) – Japan Press
(JP) Bank of Japan (BOJ) Deputy Gov Wakatabe: BOJ will not hesitate to add stimulus if needed
(JP) Japan Aug Monetary Base Y/Y: 11.5% v 9.8% prior

Korea

Kospi opened +0.6%
(KR) SOUTH KOREA AUG CPI M/M: 0.6% V 0.4%E; Y/Y: 0.7% V 0.5%E
(KR) South Korea plans second round of cash handouts – financial press
(KR) South Korea confirms 267 additional coronavirus cases v 235 prior; 2 additional deaths

Other Asia

(TH) Thailand Fin Min Predee Daochai said to resign due to illness (**Note: held position for approx a month) [from Sept 1st]

Europe

(IE) ECB’s Lane (Ireland, chief economist): We have seen a repricing in the Euro in recent weeks; Does not target FX rate, but EUR/USD rate matters

Levels as of 1:20 ET

Nikkei 225, +0.3%, ASX 200 +1.7% , Hang Seng -0.2%; Shanghai Composite -0.2% ; Kospi -0.1%
Equity S&P500 Futures: +0.3%; Nasdaq100 +0.5%, Dax +0.2%; FTSE100 +0.6%
EUR 1.1928-1.1891 ; JPY 106.12-105.85 ; AUD 0.7382-0.7335 ;NZD 0.6786-0.6746
Gold -0.4% at $1,970/oz; Crude Oil +0.8% at $43.09/brl; Copper -0.1% at $3.0202/lb