Asia Summary
Asian equity markets opened mixed as early in the morning North Korea launched a mid-range ballistic missile that crossed over Japan’s air space (1st since 2009) before landing in the sea. S&P futures opened sharply lower, gold rose as geopolitical tensions rose to a new level. Crude is higher as hurricane Harvey continues to impact oil refineries and we may soon see impact on retail distribution as trucks are redirected to rescue and relief efforts. South Korea President Moon has ordered military to stage a show of force; 4 F-15K jet fighters conducted bomb-dropping drill. While Japan PM Abe and President Trump agreed to increase pressure on North Korea; want to call on China and Russia to play a role in North Korea. UN Security Council will hold a meeting later today. USD/KRW rose 0.8% to 1,126.70, while the Kospi fell over 1%. Many analysts are attributing the market reaction to risk off sentiment and the continued concern over US debt ceiling and possible government shutdown. Notably in China the PBOC made its first injection of CNY10B after several drains and the yuan strengthened to its highest against the dollar since June 2016.
Key economic data
(KR) South Korea Sept Business Manufacturing Survey: 83 v 78 prior; Non-Manufacturing Survey: 78 v 77 prior
(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 113.5 v 109.2 prior
(JP) JAPAN JUL JOBLESS RATE: 2.8% V 2.8%E
(JP) JAPAN JUL OVERALL HOUSEHOLD SPENDING M/M: -1.9% V +1.5% PRIOR; Y/Y: -0.2% V +0.7%E
(AU) Australia Jul HIA New Home Sales m/m: -3.7% v -6.9% prior
Speakers and Press
China/Hong Kong
(CN) Deputy to the 12th National People’s Congress Lai Xiaomin: There are bubble characteristics in the distressed debt market as the growing market attracts many newcomers with little experience are driving up auction prices
(CN) China Economic Information Daily in a comment piece: Issuance of treasury bonds should be the main method for local governments to raise new funding to curb the need for illegal financing
(CN) PBOC Official Gongsheng: Aiming to offer more bondproducts – Chinese press
Korea
(KR) South Korea: Plans KRW429T budget for 2018 (record)
(KR) North Korea has launched a missile headed toward northern Japan, which landed in Sea of Japan, passing over the country – Japanese press
Other
(US) US Commerce Sec Ross: Postpones final determination related to Canada softwood lumber to Nov 14th
Asian Equity Indices/Futures (00:00ET)
Nikkei -0.6%, Hang Seng -0.4%; Shanghai Composite +0.1%, ASX200 -1.0%, Kospi -1.1%
Equity Futures: S&P500 -0.6%; Nasdaq100 -0.7%, Dax -0.6%, FTSE100 -0.5%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1986-1.1956; JPY 108.95-108.34; AUD 0.7939-0.7906; NZD 0.7255-0.7221
Dec Gold +0.5% at $1,321/oz; Oct Crude Oil +-0.5% at $46.80/brl; Sept Copper +0.1% at $3.09/lb
GLD SPDR Gold Trust ETF daily holdings higher by 9.16 tonnes to 814.36 tonnes
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6293 V 6.6353 PRIOR
(CN) China PBOC OMO injects CNY50B in 7 day v CNY100B prior in 7 and 14-day reverse repo prior; Net injection CNY10B v drain CNY100B prior
(KR) South Korea sells 30-yr treasury bonds at 2.365%
(TH) Thailand Central Bank sells combined THB60B in 3-month and 6-month bonds
Equities notable movers
Australia/New Zealand
SDL.AU Shut in ~75% of Eagle Ford operations due to Harvey; +20%
ALU.AU Reports FY17 (A$) Net 28.1M v 23.0M; EBIT 29.5M v 24.6M y/y; Rev 110.9M v 93.6M y/y; +10%
SFH.AU Reports FY17 (A$) Net loss 8.4M v loss 2.2Me; underlying EBITDA 26.7m v 25.0M y/y; Rev 808.9M v 826.2M y/y; -24%
Hong Kong/China
285.HK Reports H1 (CNY) Net 1.32B v 0.60B y/y, Rev 17.5B 15.5B y/y; -8%
3333.HK Reports H1 (CNY) Net 23.1B v 7.13B y/y, Rev 188.0B v 87.5B y/y; +4.6%
