China FX Regulator Expressed NO Concern With CNY, Confirmed QDII Speculation

Oct 23 20, 06:15 GMT

General Trend

HK-listed Energy firms rise after figures from CNOOC, Financials also rise
Shanghai Composite traded flat during the morning session; Financials rose, while IT shares declined
Topix Air Transportation and Securities indices are among the gainers; Retail index declines; Nexon rises on Nikkei index inclusion
Energy and Financial firms rise in Australia, decliners include Resource and Consumer firms
Companies expected to report earnings during the NY morning include Autoliv, American Express, Cleveland Cliffs, Carter’s
China’s plenary session is expected to start on Monday (Oct 26th). China’s 5-year plan (for 2021-2025) is expected to be discussed at the session.

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
(AU) AUSTRALIA OCT PRELIMINARY PMI MANUFACTURING: 54.2 V 55.4 PRIOR (5TH MONTH OF EXPANSION); PMI Services: 53.8 v 50.8 prior
(AU) Australia sells A$1.5B v A$1.5B indicated in 0.50% Sept 2026 bonds, avg yield 0.3937%, bid to cover 4.5x
(NZ) NEW ZEALAND Q3 CPI Q/Q: 0.7% V 0.9%E; Y/Y: 1.4% V 1.7%E (lowest annual reading since 2018); Domestic or non-tradable inflation increased 2.6 percent in the year to September 2020 [This is the first time it has fallen below 3 percent annually since June 2019 quarter]
(NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$220M v NZ$330M prior in government bonds as part of QE v NZ$220M sought
(NZ) Reserve Bank of New Zealand (RBNZ): Will seek to purchase NZ$880M v NZ$880M prior in government bonds next week

China/Hong Kong

Hang Seng opened -0.1%, Shanghai Composite -0.1%
(CN) China SAFE (FX regulator): To grant more QDII in phases; Recent CNY rise is supported by fundamentals, FX Market supply and demand;
(CN) China PBOC sets Yuan reference rate: 6.6703 v 6.6556 prior (First weaker CNY fix in 7 trading sessions)
(CN) SAFE (fx regulator): China Commercial banks bought CNY26.9B in FX in Sept ($4.0B); Sold $3.8B in Aug; CNY FX rate stability better than expected since Coronavirus
(CN) China Commerce Ministry (MOFCOM): To impose temporary anti-dumping duties on some rubber imports from the US, South Korea and EU; effective from Oct 28th
(CN) China Commerce Ministry (MOFCOM) spokesperson Gao Feng: To improve the export control list and release it in due course (from Oct 22nd)
(CN) China reassures US firms on trade deal – Global Times (from Oct 22nd)
(CN) China PBoC Open Market Operation (OMO): Injects CNY70B in 7-day reverse repos v Injects CNY50B in 7-day reverse repos prior; Net inject CNY20B v Net inject CNY0B prior
(CN) China Ministry of Finance (MOF) Sells 3-month, 6-month bills and 30-year bonds; Sells 30-year bonds: Avg yield 3.8815% v 3.7735% prior
Huawei: Reports 9M (CNY) Rev 671.3B (~$100.4B) v 610B y/y [+10% y/y]
(CN) China President Xi: Chinese people cannot be messed with; Calls for faster moves in modernizing national defense and armed forces – Korean War Anniversary Event

Japan

Nikkei225 opened +0.4%
Hitachi Construction [6305.JP]: Hitachi To sell shares in Hitachi construction – Japanese press
Hitachi [6501.JP]: Considering various options on improving corporate value; Nothing has been decided at current time
(JP) JAPAN SEPT NATIONAL CPI Y/Y: 0.0% V 0.0%E; CPI EX-FRESH FOOD (CORE) Y/Y: -0.3% V -0.4%E
(JP) JAPAN OCT PRELIMINARY PMI MANUFACTURING: 48.0 V 47.7 PRIOR (18TH STRAIGHT CONTRACTION BUT HIGHEST READING SINCE FEB); PMI Services: 46.6 v 46.9 prior (9th straight contraction)
(JP) Japan Chief Cabinet Sec Kato: We are not at the stage to give timing for the Fukushima water decision; Will closely monitor price trends (Comments after CPI release)
(JP) Japan Govt Coronavirus Panel said to be recommending extending Japan year-end and New Year Holidays through Jan 11th

Korea

Other Asia

(SG) Singapore Sept CPI M/M: 0.3% v 0.1%e; Y/Y: 0.0% v -0.3%e; CPI Core Y/Y: -0.1% v -0.3%e

North America

(US) House Speaker Pelosi: We’re just about there but have not completely signed off on agreement; It’s urgent we come to an agreement on coronavirus relief – press conf comments
(US) White House Chief of Staff Meadows: Hopes Speaker Pelosi is ready to do a stimulus deal – Fox Business interview
(US) President Trump: Johnson and Johnson and Moderna doing well on coronavirus vaccines – Presidential Debate
(US) Presidential Candidate Biden: Would make China ‘play by the rules’ – Presidential Debate
(US) SEMI Sept North America-based Manufacturers of Semi Equipment Billings: $2.75B, +3.6% m/m and +40.3% y/y
Blood plasma said to not benefit coronavirus patients – Stat
Uber [UBER] and Lyft [LYFT]: Loses lawsuit, Appeals Court unanimously rules that Uber must abide by California labor law and treat drivers as employees; Lyft also required to abide by law
Wells Fargo [WFC]: Said to be seeking sale of asset management unit – Press

Europe

Levels as of 1:20 ET

Nikkei 225, +0.3%, ASX 200 -0.1% , Hang Seng +0.3%; Shanghai Composite -0.1% ; Kospi +0.3%
Equity S&P500 Futures: +0.1%; Nasdaq100 +0.1%, Dax flat; FTSE100 +0.2%
EUR 1.1824-1.1786 ; JPY 104.93-104.66 ; AUD 0.7139-0.7107 ;NZD 0.6680-0.6649
Gold +0.2% at $1.906/oz; Crude Oil -0.2% at $40.56/brl; Copper -0.4% at $3.1513/lb