General Trend:
- Large-cap tech names and property firms trade generally lower in HK, Financial index rises
- Hang Seng index changes take effect from today [originally announced on Aug 14th]
- Decliners in Japan include Information/Communication and auto firms; Iron/Steel, Transportation and Financial firms gain
- Nikkei-weighted Softbank drops over 6% after recent FT article
- Shanghai Composite declined by less than 0.2% during morning session; decliners included IT and Consumer firms, financials traded generally higher
- Australian equities opened flat as Victoria released its coronavirus-related roadmap; Consumer related firms trade generally lower, Aged-care firms continue to trade generally lower; Financial and Resource names rise
- Samsung rises after receiving over $6.0B network equipment order from Verizon
- LARGAN Precision (Taiwanese Apple supplier) declines by over 2%, Aug revenues -22% y/y
- Oil prices decline amid reported price cut by Saudi Arabia
- Pound (GBP) declines, various press articles focused on the Brexit talks
- CME Globex equity products will be halted between 13:00 ET/17:00 GMT until 18:00 ET/22:00 GMT, Interest Rate products will be halted between 13:00 ET/17:00 GMT until 18:00 ET/22:00 GMT
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat
- (AU) Victoria (Australia) government released roadmap for easing coronavirus lockdown restrictions (as expected), stage 4 restrictions will remain in Melbourne for at least 2 more weeks [until Sept 28th]; The stage 4 restrictions were initially expected to end by Sept 13th
- (AU) Victoria state (Australia) reports 41 additional coronavirus cases (Lowest daily total since June); 9 additional deaths
- (AU) Australia Aug AiG Performance of Services Index: 42.5 v 44.0 prior
- (AU) Australia Aug ANZ Job Advertisements M/M: +1.6% v +19.1% prior
- CSL Limited [CSL.AU]: Announces agreement with multiple entities (Univ of Queensland and AstraZeneca/Oxford Univ) to manufacture COVID-19 vaccines; Vaccines to be distributed in Australia in early 2021
- (AU) Australia reported to extend its bankruptcy protection rules and regulations until the end of 2020 due to the coronavirus impact on the economy – Press
- (AU) Australia sells A$2.0B v A$2.0B indicated in 2.75% Nov 2029 bonds, avg yield 0.9238%, bid to cover 4.8x
China/Hong Kong
- Hang Seng opened -0.3%, Shanghai Composite -0.2%
- Semiconductor Manufacturing International (SMIC) [981.HK]: Trump administration considers adding China’s SMIC to trade blacklist – press
- SMIC [981.HK]: Says it has no ties with China People’s liberation Army (PLA); Any reports of ties with the military are false; Open to communications with the US Govt to resolve misunderstandings
- (CN) CHINA AUG TRADE BALANCE: $58.9B V $49.4BE; Exports Y/Y: 9.5% v 7.5%e; Imports Y/Y: -2.1% v +0.2%e; Aug Iron Ore imports 104Mt v 112.7Mt m/m
- (CN) Hangzhou (China) tightened rules for homebuyers -SCMP
- (CN) China PBOC sets Yuan reference rate: 6.8386 v 6.8359 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v Injects CNY100B in 7-day prior; Net Inject CNY20B v Net inject CNY0B prior
- Ant Financial: China reported to put a cap on interest rates that can be charged by consumer lending companies following a China Supreme Court ruling – Financial Press
- (CN) China President XI: Nations face tough tasks of stabilizing economies (from Sept 4th)
- (HK) Hong Kong Police arrest ~300 protesters on the delay to the Hong Kong Elections – Nikkei
- Goldman Sachs: Reportedly Goldman tapped as joint lead manager for Ant Group’s Hong Kong IPO which is expected at up to $30B (press from Sept 5th)
Japan
- Nikkei225 opened -0.3%
- Softbank [9984.JP]: Reportedly Softbank has been buying options in tech stocks over the last month – FT (from Sept 4th)
- Nikkei 225 contract rolled over to the Dec 2020 contract
- (JP) Japan Chief Cabinet Secretary Suga: I highly approve of BoJ governor Kuroda; would like to see a continuation of easing policies – Nikkei interview (from Sept 5th)
- (JP) Japan Aug Official Reserve Assets: $1.40T v $1.40T prior
- (JP) Japan has urged people in the southern islands to exercise caution due to Typhoon Haishen – press
- (JP) Japan July Preliminary Leading Index Ci: 86.9 V 84.4 prior; Coincident Index: 76.2 v 76.6 prior
Korea
- Kospi opened flat
- Samsung Electronics [005930.KR]: Awarded KRW7.9T (~$6.6B) order from Verizon for wireless communications solutions (including 5G); The 5 year agreement will last until Dec 2025 [agreement is said to be Samsung’s largest network equipment supply deal ever]
- (KR) South Korea extends social distancing level 2.5 for 1 additional week in Seoul (capital) – Yonhap
- (KR) South Korea confirms 119 additional coronavirus cases v 167 prior; 2 additional deaths
- Shinhan Financial [055550.KR]: To raise KRW1.16T through rights offering
North America
- (US) Fed’s Powell: today’s jobs reports was a good one; jobs are growing faster than many had expected; the economy will need low interest rates for years – NPR interview (from Sept 4th)
- Etsy, Teradyne and Catalent Set to Join S&P 500 (Tesla NOT included in S&P500 additions) [from Sept 4th]
- (US) US Treasury Sec Mnuchin said he expects a government funding bill to cover US agencies through the beginning of Dec, expected details to be ‘firmed up’ by the end of the week – US press
Europe
- UK PM Johnson expected to warn the EU that if there is no breakthrough Brexit deal by Oct 15th, Britain will accept no deal and ‘move on’, according to the UK press; FT says the UK government is planning new legislation that will override parts of the Brexit withdrawal agreement, risking the collapse of trade negotiations with Brussels
- Saudi Arabia cuts Oct official selling price for Arab light crude exported to Asia by $1.40/barrel
Levels as of 1:20 ET
- Nikkei 225, -0.4%, ASX 200 flat , Hang Seng -0.2%; Shanghai Composite -0.4% ; Kospi +0.6%
- Equity S&P500 Futures: -0.3%; Nasdaq100 -1.1%, Dax -0.2%; FTSE100 +0.4%
- EUR 1.1847-1.1830 ; JPY 106.38-106.21 ; AUD 0.7299-0.7272 ;NZD 0.6724-0.6703
- Gold +0.4% at $1,940/oz; Crude Oil -1.5% at $39.19/brl; Copper -0.4% at $3.0660/lb
