Asia Summary
Asian equity markets opened mixed before trading mostly higher on stronger China PMI manufacturing, indicating that the Govt may have more room to continue tightening regulations to curb financial risks. However the services PMI fell putting downward pressure local markets. USD saw moderate strength on positive overnight US data and the resulting weaker yen sent Japan automakers and tech names into the green. ASX was higher with the last of earnings season coming in strong; standouts include Ashley Services and OM Holdings. Australia Q2 CAPEX was also higher, helped by strong commodity prices and upbeat business confidence.
As expected BOK left its rate unchanged at record low, saying it is assessing effects of government measures to cool the housing market and a recently introduced fiscal stimulus. Also said they needed more time and data before adjusting GDP forecast. PBOC skips OMO operations with a net drain of CNY100B v yesterday’s CNY10B. The PBOC set the yuan mid-point rate at the strongest setting since June 2016.
Key economic data
(CN) CHINA AUG OFFICIAL GOVT MANUFACTURING PMI: 51.7 V 51.3E; Non-Manufacturing PMI: 53.4 v 54.5 prior
(KR) BANK OF KOREA (BOK) LEAVES REPO RATE UNCHANGED AT 1.25%; AS EXPECTED
(CN) CHINA JUL SWIFT GLOBAL PAYMENTS (CNY): 2.0% V 1.98% PRIOR
(KR) SOUTH KOREA JUL INDUSTRIAL PRODUCTION M/M: 1.9% V 0.5%E; Y/Y: 0.1% V -0.2%E
(KR) SOUTH KOREA JUL CYCLICAL LEADING INDEX CHANGE: 0.2 V 0.3 PRIOR
(UK) AUG GFK CONSUMER CONFIDENCE: -10 V -13E
(UK) AUG LLOYDS BUSINESS BAROMETER: 17 V 30 PRIOR (1-yr low)
(JP) JAPAN JUL PRELIM INDUSTRIAL PRODUCTION M/M: -0.8% V -0.3%E; Y/Y: 4.7% V 5.2%E
(AU) AUSTRALIA Q2 PRIVATE CAPITAL EXPENDITURE (CAPEX) Q/Q: 0.8% V 0.2%E
Speakers and Press
(CN) China to continue the restructuring of state owned enterprises (SOEs) in the steel sector – Chinese Press
(CN) China MOFCOM Spokesperson Feng: To start campaign to protect foreign companies’ intellectual properties
(KR) South Korea Vice Defense Min in Parliament: Confirms in talks with US on remaining THAAD launcher deployment; to seek deployment of US strategic military assets
(JP) BoJ Masai: Reiterates still some distance to achieving 2% inflation target
(US) US Coast Guard said to partially re-open Houston Ship Channel to vessels – US financial press
Asian Equity Indices/Futures (00:00ET)
Nikkei +0.9%, Hang Seng -0.6%; Shanghai Composite -0.7%, ASX200 +0.7%, Kospi -0.4%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.2%, FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1897-1.1872; JPY 110.61-110.23; AUD 0.7923-0.7887; NZD 0.7210-0.7164
Dec Gold -0.4% at $1,308/oz; Oct Crude Oil -0.0% at $45.95/brl; Sept Copper +0.7% at $3.11/lb
(CN) China PBOC skips OMO v injects CNY130B in 7-day and 14-day prior; Drains net CNY40B v drains CNY100B prior
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6010 V 6.6102 PRIOR (strongest setting since June 2016)
(CN) China PBOC skips OMO v injects CNY130B in 7-day and 14-day prior; Drains net CNY40B v drains CNY100B prior
(JP) Japan MoF sells ¥1.78T in 2-yr 0.1% bonds; avg yield -0.1490%; bid-to-cover 4.97x
Equities notable movers
Australia/New Zealand
ASH.AU Reports FY17 (A$) Net loss 5.9M v loss 69.6M y/y; underlying EBITDA 5.7M v loss 7.7M y/y; Rev 314.7M v 276.9M y/y; +27.8%
PRO.AU Reports FY17 (A$) Net profit 2.0M v 2.4M y/y; Rev 9.2M v 12.3M y/y; -15%
OMH.AU Reports H1 (A$) Net loss 21.3M v loss 82.2M y/y, Rev 263M v 183M y/y (reported yesterday); +15.5%\
Hong Kong/China
390.HK Reports H1 (CNH) Net 7.71B v 5.1B y/y, Rev 300.0B v 268B y/y; +7.3%
656.HK Reports H1 Net CNY5.86B v CNY4.39B y/y; Rev CNY36.3B v CNY32.5B y/y; Existing shareholder, Sisram Medical, offer 110M shares at HK$8.88-12.35/shr in Hong Kong IPO; +9.2%
Other
COST Reports Aug Total SSS (ex gas) 5.9%; US SSS (ex gas) +6.1% v +3.9%e
