General trend
- Equity markets are generally off of the lows, modest moves have been seen thus far.
- Shanghai Composite ended morning trading higher despite the flat open [Banks and Property indices rise amid report related to loan quota increase].
- Hang Seng has also gained after opening flat [TECH and Financials trade generally higher; Property names also rise]; NetEase rose after earnings report; Huarong International drops over 20% after being resumed for trading; Aug Macau Casino Revs beat ests.
- Nikkei has extended gain with USD/JPY above 110 [Topix Banks index supported by higher bond yields; Electric Appliances, Information & Communication and Air Transportation indices also rise; Marine Transportation and Iron & Steel indices lag].
- S&P ASX 200 has lagged [Metcash weighs on Consumer Staples index; Financials rebound amid higher bond yields; Energy index rises].
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%.
- (AU) AUSTRALIA Q2 GDP Q/Q: 0.7% V 0.5%E; Y/Y: 9.6% V 9.2%E.
- (AU) Australia Treasurer Frydenberg: Economy will bounce back once restrictions ease; Q2 GDP was solid, confident that COVID restrictions will be lifted in Q4.
- (AU) Victoria (Australia) Premier: Unlikely to ease lockdown until Sept 23rd (Mon); cannot ease COVID restrictions today due to reporting its highest number of new cases in over a year.
- (AU) Australia Aug Final PMI Manufacturing: 52.0 v 51.7 prior (confirms 15th month of expansion).
- MTS.AU Reports first 16 weeks of FY22 sales continue to be elevated, levels well above pre-COVID levels; first 16 weeks of FY22 Supermarket Sales -1.8% y/y, total food sales -7.4% y/y – AGM.
- (AU) Australia sells A$1.0B v A$1.0B indicated in 1.00% Nov 2031 bonds, avg yield: 1.2319%, bid to cover 5.1x.
Japan
- Nikkei 225 opened +0.3%.
- (JP) JAPAN Q2 CAPITAL SPENDING (CAPEX) Y/Y: 5.3% V 3.5%E; CAPITAL SPENDING EX-SOFTWARE: 3.6% V 3.0%E.
- (JP) Bank of Japan (BOJ) Deputy Gov Wakatabe: inflation expectations moving sideways with some signs up pick up, more improvement needed to reach target, economy is sustaining recovery trend and will become clearer as pandemic impact eases.
- (JP) Analysts note that the decline in Japan July industrial production is an indication of supply chain issues not a weakness in global demand – press.
- (JP) Japan govt reportedly plans to spend ¥119.5B for offshore wind power purposes – Nikkei.
- (JP) Japan PM Suga: Can’t dissolve parliament amid severe COVID situation, dealing with that is priority over general elections.
Korea
- Kospi opened -0.1%.
- 005930.KR Renault Samsung have reached tentative wage agreement with union, base pay freeze for 2020 and 2021 with lump sum bonus.
- (KR) South Korea Aug PMI Manufacturing: 51.2 v 53.0 prior (lowest since Oct 2020).
China/Hong Kong
- Hang Seng opened 0.0%; Shanghai Composite opened 0.0%.
- (CN) CHINA AUG CAIXIN PMI MANUFACTURING: 49.2 V 50.1E (1st contraction since Apr 2020).
- (CN) China issues plan on deepening medical service pricing reform: to curb overly fast growth in medicine expenses – press.
- (CN) China Ambassador Qin Gang: US and China should maintain dialogue.
- (HK) Macau Aug Casino Rev (MOP): 4.44B v 8.4B prior; Y/Y: 234% v 176%e.
- (CN) China PBOC to implement new rules that will require nonbank payment apps to report new products and stock market listings to authorities, effective today.
- (CN) China President Xi to speak at China International Fair for Trade and Services Sept 2nd.
- (CN) China PBOC sets Yuan reference rate: 6.4680 v 6.4679 prior.
- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY50B in 7-day reverse repos prior; Net drain CNY40B v Net Inject CNY40B prior.
Other
- (CL) CHILE CENTRAL BANK (BCCH) RAISES OVERNIGHT RATE TARGET BY 75BPS TO 1.50%; MORE-THAN-EXPECTED (largest hike in 20 years).
- Spot prices for DRAM decline, cites forecast of weaker demand – Yonhap.
North America
- (US) Weekly API Crude Oil Inventories: -4M v -1.6M prior.
- INTU Said to be in talks to acquire marketing, email platform, MailChimp for >$10B.
Europe
- (FR) France Aug New Car Registrations 87.7K, -15.4% y/y – CCFA.
- (UK) Japan Econ Min Nishimura: CPTPP member countries agreed to hold 1st meeting with UK on its inclusion into the CPTPP in 1 month, entry of the UK is very significant in building free and fair economic order.
Levels as of 01:15ET
- Hang Seng +0.5%; Shanghai Composite +0.9%; Kospi +0.1%; Nikkei225 +1.1%; ASX 200 -0.3%.
- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.2%, Dax +0.2%; FTSE100 +0.4%.
- EUR 1.1812-1.1796; JPY 110.25-109.99 ;AUD 0.7324-0.7308; NZD 0.7056-0.7036.
- Commodity Futures: Gold -0.1% at $1,816/oz; Crude Oil +0.7% at $68.98/brl; Copper -0.9% at $4.32/lb.
