HomeContributorsFundamental AnalysisFinancials Decline In CN And HK

Financials Decline In CN And HK

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

 

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