Modest Moves Seen In AU Bond/FX Markets After The RBA Announced More Easing

Nov 03 20, 06:00 GMT

General Trend

Asian energy firms trade generally higher after the recent rebound in oil prices
Banks rise in Hong Kong after recent earnings, ahead of US elections; Energy firms also gain; Early gainers in Shanghai included Financial and IT firms
Geely rises over 4%; China announced new energy vehicle (EV) industry plan for 2021-2035
Gainers in Australia include Energy, Resources, Consumer Discretionary and Financial firms
RBA cut rates and expanded QE program (as expected), did not announce yield target related to 5 or 10-year maturity: AUD/USD holds above 70 cents ahead of Tuesday’s US elections
RBA Gov Lowe: 5-year bond yield target is not appropriate; Other tools include asset purchases, transaction in FX market, and liquidity provisions
China may now target wheat from Australia (HK press); Sandfire Resources [SFR.AU] declines by over 6% amid speculation that China might ban imports of copper from Australia
Quiet session for the offshore Yuan (CNH) ahead of US elections
South Korea CPI data weighed down by mobile phone-related subsidy
South Korea said to cancel plan to increase capital gains taxes on large stockholders (local press)
Malaysia Central Bank is due to hold rate decision later today (no changes expected)
Companies expected to report during the NY morning include Emerson Electric, Eaton Corp, Humana, Johnson Controls, McKesson, Spirit Aerosystems, Sysco Corp, Thomson Reuters, Wayfair

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
AU) RESERVE BANK OF AUSTRALIA (RBA) CUTS CASH RATE TARGET BY 15BPS TO 0.10%; LOWERS 3-YEAR YIELD TARGET BY 15BPS TO 0.10%; BOTH AS EXPECTED
(AU) RESERVE BANK OF AUSTRALIA (RBA) ANNOUNCES NEW QE PROGRAM TO PURCHASE A$100B IN 5-10 YEAR BONDS OVER 6 MONTHS; AS EXPECTED
(AU) Reserve Bank of Australia (RBA) Gov Lowe: Negative policy rate in Australia is extraordinarily unlikely; Higher bond yields have added upward pressure on the A$ – post rate decision press conference
(AU) China said to be considering banning wheat imports from Australia – SCMP
BXB.AU Reports Q1 (A$) Rev 1.19B v 1.16B y/y
SFR.AU Comments on speculation that China may ban imports of copper from Australia: not aware of the reasons for the reported potential ban or the reliability of the media reports

Japan

Nikkei 225 closed for holiday
(JP) Japan said to consider cutting aviation fuel tax on domestic flights – Press

Korea

Kospi opened +0.7%
(KR) SOUTH KOREA OCT CPI M/M: -0.6% V 0.0%E; Y/Y: 0.1% V 0.8%E (1st decline in 4 months)
(KR) South Korea said to stop its plan to tighten taxes on large stockholders – Korea press

China/Hong Kong

Hang Seng opened +0.9%; Shanghai Composite opened +0.5%
(HK) Hong Kong SFC CEO Alder: To require all cryptocurrency trading platforms to be regulated whether or not they trade securities
(CN) China announces new energy vehicle (EV) industry plan for 2021-2035
6688.HK MSCI to add A and H shares to MSCI Indexes
(CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 7-day reverse repos v Injects CNY50B in 7-day reverse repos prior; Net inject CN20YB v Net inject CNY0B prior
1055.HK China CAAC (Aviation Regulator) To allow company to establish a unit for Cargo services
(CN) China PBOC sets Yuan reference rate: 6.6957 v 6.7050 prior
(HK) Hong Kong Chief Exec Lam: Aims to deliver policy address on Nov 25th; Hong Kong to extend social distancing rules for 7 additional days
992.HK Reports Q2 Net $310M v $202.2M y/y, Op $565M v $441.7M y/y Rev $14.5B v $13.5B y/y
1114.HK China province considering debt restructuring for the Company
(CN) China PBOC and CBIRC issues draft rules on online micro-lending; requiring lenders offering loans across different regions should have registered capital of at least CNY5.0B

Other

(SG) Monetary Authority of Singapore (MAS) To discontinue S$1,000 note starting Jan 1st; saying discontinuation will pre-empt money laundering and terrorism financing risks

North America

Europe

Levels as of 12:15ET

Hang Seng +2.0%; Shanghai Composite +1.1%; Kospi +1.4%; Nikkei225 +1.4%; ASX 200 +2.0%
Equity Futures: S&P500 +0.4%; Nasdaq100 +0.1%, Dax +0.6%; FTSE100 +0.9%
EUR 1.1655-1.1636; JPY 104.81-104.66; AUD 0.7063-0.7028; NZD 0.6647-0.6611
Commodity Futures: Gold +0.1% at $1,893/oz; Crude Oil -0.0% at $36.80/brl; Copper +0.1% at $3.09/lb