HomeContributorsFundamental AnalysisEquities Take Their Cue From Wall St And Reverse Thursday Decline

Equities Take Their Cue From Wall St And Reverse Thursday Decline

General Trend

  • Equity markets reverse yesterday’s losses and currencies gain against the dollar as overall sentiment tips into positive territory after a rally in tech names into the US market close.
  • Offshore yuan got an early pop after FTSE Russell said it would include China Govt bonds in its global bond index
  • US House Democrats said to be working on a $2.3T virus stimulus package that could be voted on as soon as next week
  • China calls out US behavior at the UN, South Korea offers to mediate the dispute if given the opportunity to lead WTO
  • Australia banks rally on the news that lending rules could be relaxed in order to encourage more loans and a faster process.
  • COVID cases in the region remain mostly under control (some small clusters), but will keep social distancing and other measures in place for Autumn festivals

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened %
  • (AU) Australia Govt may propose to repeal the Responsible Lending Obligations legislation, in order to encourage more lending and make the process faster – Aussie press
  • (NZ) New Zealand Treasury: Auckland lockdown will dampen Q3 GDP rebound; in Aug the economic activity declined
  • (AU) Australia Prelim Aug Merchandise Exports M/M: -2.0% v -6.0% prior; Imports M/M: -7.0% v 11.0% prior
  • AIR.NZ Continuing capital structure review, expect to compete in early 2021; have started draw down of Crown credit facility

Japan

  • Nikkei 225 opened +0.6%
  • (JP) Japan said to be considering corporate tax cuts for Small and Medium Enterprises (SME) to encourage M&A activity – Japan Press
  • (JP) Japan Aug PPI Services Y/Y: 1.0% v 1.2%e
  • 9984.JP Masayoshi Son has reduced the number of shares he has pledged as collateral to lenders by ~$1.0B – press
  • 7203.JP Said to be planning to raise domestic production for Oct and Nov by +3-7% more than plan that was made in August – industry press

Korea

  • Kospi opened +1.0%
  • (KR) South Korea Sep Consumer Confidence: 79.4 v 88.2 prior (6-month low)
  • (KR) South Korea Trade Min Yoo: South Korea and Japan both strongly advocate multilateralism; To seek US and China to discuss trade at WTO if elected
  • (KR) South Korea Aug terms of trade: 96.75, +6.7% y/y (5th consecutive increase)

China/Hong Kong

  • Hang Seng opened +0.5%; Shanghai Composite opened +0.4%
  • 700.HK Trump administration files stay motion injunction against WeChat ban, wants the block on WeChat ban put on hold – press
  • 175.HK Volvo CEO Samuelsson: Expect to report H2 sales flat y/y despite second wave of virus in Europe – press
  • (CN) China Defense Ministry: The US needs to recognize facts on the ground and properly handle bilateral relations with China, and between the two nations’ militaries – Xinhua
  • (CN) FTSE Russell to include China Govt bonds in Global Bond Index, effective in Oct 2021
  • (CN) China National Health Commission Coronavirus Update for Sept 24th: 8 additional cases v 7 prior; Additional deaths: 0 v 0 prior
  • (CN) China PBOC sets Yuan reference rate: 6.8121 v 6.8028 prior
  • (CN) China PBoC Open Market Operation (OMO): Injects CNY90B in 14-day reverse repos v Injects CNY120B in 14-day reverse repos prior; Net drain CNY20B v Net inject CNY10B prior
  • (CN) China PBoC Open Market Operation (OMO) Net inject CNY480B for the week v Net drain total CNY140B prior

North America

  • (US) House Ways and Means Chair Neal (D-MA): confirms Democrats are drafting a new COVID response bill; could be voted on next week; likely to be at $2.2T (US session)

Europe

  • (UK) In August sale of homes over £1.0M were +105% y/y as people shift living arrangements as they adjust to living with COVID; sale of less expensive properties were +61% y/y – press citing Rightmove
  • (UK) Aug Auto Manufacturing 51.0K units, -44.6% y/y; YTD manufacturing 518.1K units, -40.2% y/y – SMMT
  • (UK) EU negotiators to continue to try and reach Brexit deal despite PM Johnson making a proposal to rewrite the withdrawal agreement he signed, EU may pursue legal action – press

Levels as of 1:00ET

  • Hang Seng 0.0%; Shanghai Composite -0.2%; Kospi +0.5%; Nikkei225 +0.6%; ASX 200 +1.2%
  • Equity Futures: S&P500 %; Nasdaq100 %, Dax %; FTSE100 %
  • EUR 1.1678-1.1662; JPY 105.56-105.36; AUD 0.7068-0.7045; NZD 0.6565-0.6536
  • Commodity Futures: Gold -0.1% at $1,875/oz; Crude Oil +0.6% at $+0.6/brl; Copper +0.6% at $2.98/lb

 

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