General Trend
- Kweichow Moutai declines over 4% after releasing quarterly earnings, weighs on the Shanghai Consumer Staples index; IT index rises, China’s 5-year plan is expected to focus on technology investment ; Hong Kong markets are closed for holiday
- Consumer Staples rise in Australia on takeover offer received by Coca-Cola Amatil; Westpac said its H2 results will be impacted by negative items, little initial impact seen on share price
- Samsung C&T and Samsung Life rise after the passing of Samsung’s Chairman
- Germany’s SAP issued Q3 profit warning; DAX FUTs drop over 1%
- USD index FUTs rise after recent loss, equity FUTs decline; Offshore Yuan (CNH) declines; US Treasury Dept. Semi-annual Currency Report might not be released until after the Nov US elections
- Japanese press comments on the possible size of Japan’s third extra budget
- Japanese companies expected to report earnings include Canon Inc and Nitto Denko
- 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; The session will be held from Oct 26-29th
- HSBC is expected to report Q3 earnings on Oct 27th (Tuesday)
- Companies expected to report during the NY morning include Hasbro
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened 0.0%
- WBC.AU Guides H2 cash earnings to he negatively impacted by A$1.22B after tax due to items, to negatively impact CET1 capital ratio by 24bps
- CCL.AU CCEP makes indicative proposal of A$12.75/shr cash or A$9.28B; GUides Q3 Rev -4.2% y/y
- (AU) Australia Treasury Sec Kennedy: Treasury full employment seen around 4.75-5.00%
- (AU) Australia sells A$1.5B v A$1.5B indicated in 2.75% Nov 2028 bonds, avg yield 0.628%, bid to cover 4.61x
- (AU) Australia prelim Sept Merchandise Exports M/M: +3.0% v -4.0% prior final; Imports M/M: -1.0% v +2.0% prior final
- (AU) Victoria state (Australia) reports 0 additional coronavirus cases; 0 additional deaths v 0 prior; Delayed the easing of restrictions related to cafes, restaurants and pubs in Melbourne, cited outbreak of the coronavirus in the northern suburbs (1st report of 0 cases in 4-months)
Japan
- Nikkei 225 opened 0.0%
- (JP) Japan 3rd extra budget seen around ¥10T, part of effort to counter negative impact of COVID – Japan press
- (JP) Japan Cabinet approval rating -11ppt to 63% – Nikkei
- (JP) Japan Sept PPI Services Y/Y: 1.3% v 1.0%e
- 8002.JP Japan Sept aluminum stockpiles 311.5Kt, -4.6% m/m
Korea
- Kospi opened +0.3%
- 005930.KR Chairman Lee Kun Hee has passed away – press
- (KR) South Korea and China to talk about expanding scope of bilateral FTA – press
- 005380.KR Reports Q3 (KRW) Net -188.8B v +460.5B y/y; Op -313.8B v +379B y/y; Rev 27.6T v 27.0T y/y
China/Hong Kong
- Hang Seng closed; Shanghai Composite opened -0.6%
- Reminder: China NPC central committee plenum starts this week , to discuss the 14th five-year economic plan, not expected to be heavy on details including GDP target, expected to re-emphasize ‘dual-circulation’ strategy and commitment to opening up.
- (CN) China PBoC Gov Yi Gang: China will improve yuan flexibility and will reduce restrictions on cross-border use of the yuan – Bund Summit conference held in Shanghai (update)
- (CN) China local government debt within official limit at the end of September – Xinhua
- (HK) Hong Kong Financial Chief Chan: The decline in Q3 GDP should narrow significantly from the roughly 9% decline in the first two quarters of this year – blog post
- ANT.IPO Said to have gotten CNY68-69/shr IPO bids from larger China fund managers – US press
- (CN) China PBoC Open Market Operation (OMO): Injects CNY50B in 7-day reverse repos v Injects CNY70B in 7-day reverse repos prior; Net inject CNY0B v Net inject CNY20B prior
- (CN) China PBOC sets Yuan reference rate: 6.6725 v 6.6703 prior
- (CN) Former China PBOC Gov Zhou: China’s high savings rate will change with the adoption of a “dual circulation” strategy, a policy focus that aims to make the economy more self-sufficient – speaking from forum over weekend
- (CN) China Iron and Steel Association (CISA): See 2020 crude steel production to be >1.0Bt, +3-5% y/y
North America
- DNKN Confirms preliminary discussions to be acquired by Inspire Brands
- (US) NY Fed official Lorie Logan suggested there is still the risk that the US Treasury market could have abrupt freezes in liquidity [like what was seen during March and April of 2020], said ongoing increases in the stock of Treasuries may lead to greater peaks in the demand for intermediation – financial press (update)
Europe
- SAP.DE Reports Q3 Non-IFRS Op €2.07B v €2.15Be, Rev €6.54B v €6.88Be; Pushes out the achievement of FY23 targets by 2 years citing COVID-19
- (ES) Spain declares 6-month COVID emergency, imposes nationwide curfew
- (EU) Brexit trade talks extended to Oct 28th
- (UK) Govt considering allowing banks to resume dividends – UK press
- (IT) S&P revises Italy sovereign rating outlook to Stable from Negative; affirms BBB rating
Levels as of 1:15ET
- Hang Seng closed; Shanghai Composite -0.6%; Kospi -0.3%; Nikkei225 -0.1%; ASX 200 -0.2%
- Equity Futures: S&P500 -0.5%; Nasdaq100 -0.4%, Dax -1.3%; FTSE100 -0.6%
- EUR 1.1861-1.1832; JPY 104.94-104.66; AUD 0.7142-0.7112; NZD 0.6695-0.6676
- Commodity Futures: Gold -0.3% at $1,899/oz; Crude Oil -1.8% at $39.12/brl; Copper -0.5% at $3.13/lb
