HomeContributorsFundamental AnalysisEquity Markets Trade Mixed Amid Evergrande Uncertainty And Holiday Impact

Equity Markets Trade Mixed Amid Evergrande Uncertainty And Holiday Impact

General trend

  • AU and NZ 10-year yields rise after gain in UST yields.
  • Modest volatility seen for Copper FUTs.
  • Financials advance in AU and JP after US gains and rise in 10-yr UST yields; China and HK financials trade mixed amid focus on Evergrande.
  • Cautious trading seen thus far in China and Hong Kong; Sportswear firms drop amid guidance from Nike.
  • Nikkei outperforms after holiday [Topix Marine Transportation and Banks indices are among the gainers].
  • S&P ASX 200 has traded modestly lower [Resources index lags].
  • (CN) PBOC to auction CNY70B in Ministry of Finance Deposits on Sept 26th (Sunday).

Headlines/Economic data

Australia/New Zealand

  • ASX 200 opened flat.
  • (AU) IMF: cuts Australia 2021 GDP forecast to 3.5%, increases 2022 GDP forecast to 4.1% – Article IV Mission.
  • (NZ) New Zealand Aug Trade Balance (NZ$): -2.1B v -0.4B prior (record monthly deficit) [Stats Agency: The decrease in the value of aircraft and parts exports was due to the export of planes to the United States in August 2020 for long-term storage as a result of New Zealand’s border closure].

China/Hong Kong

  • Hang Seng opened -0.1%, Shanghai Composite -0.1%.
  • Evergrande [3333.HK]: USD BONDHOLDERS SAY HAVE NOT YET RECEIVED INTEREST PAYMENTS [in line with report that circulated during the NY morning on Thurs] (Note: Company would have a 30-day grace period before any missed payment would constitute a default).
  • (HK) Hong Kong Fin Sec Chan: Chance of Evergrande setting off systemic risk in Hong Kong is ‘low’; Have been monitoring development and carried out constant stress tests on banks and stock market.
  • (CN) China PBOC Open Market Operation (OMO): Injects CNY0B in 7-day reverse repos v CNY60B in 7-day reverse repos prior; injects CNY120B in 14-day reverse repos v CNY60B prior; Net inject CNY70B v Net inject CNY110B prior.
  • (CN) Shenzhen (China) Municipal Gov’t: To issue up to CNY5.0B in 2-year, 3-year and 5-year CNY-denominated muni bonds in Hong Kong in Oct.
  • (CN) PBoC confirms implementing policy for relending quota of CNY 300B to support micro, small and medium-sized enterprises (MSMEs).
  • (CN) China Econ Daily: China should control imported inflation risks; currently imported inflation is only impacting raw material costs; However, should remain alert to delayed price transmission.
  • (CN) China State Planner NDRC: Told PetroChina, CNOOC, and Sinopec to strictly fulfill gas supply contracts to fertilizer companies; Permitting that Yunnan, Guizhou, and Hubei to increase Phosphate Ore Production.
  • (CN) Financial press comments on the first oil reserve auction by China: a total of ~4.43M barrels of oil was auctioned; China did not auction 2.95M bbls of Murban crude, cited the lack of bidders.
  • (CN) China PBOC sets Yuan reference rate: 6.4599 v 6.4749 prior.

Japan

  • Nikkei 225 opened +1.7% [following holiday].
  • (JP) JAPAN AUG NATIONAL CPI Y/Y: -0.4% V -0.3%E; CPI EX-FRESH FOOD (CORE) Y/Y: 0.0% V 0.0%E.
  • (JP) JAPAN SEPT PRELIMINARY PMI MANUFACTURING: 51.2 V 52.7 PRIOR (8th month of expansion); PMI Services: 47.4 v 42.9 prior (20th month of contraction).

Korea

  • Kospi opened +0.4%.
  • (KR) Bank of Korea (BOK) said another rate hike is ‘manageable’ for households and businesses – Financial Stability Report.
  • (KR) South Korea Aug PPI Y/Y: 7.3% v 7.4% prior.

Other Asia

  • (SG) Singapore Aug Industrial Production M/M: 5.7% v 3.1%e; Y/Y: 11.2% v 8.2%e.
  • (TH) Thailand Aug Customs Trade Balance: -$1.2B v +$0.9Be; Exports YoY: 8.9% v 15.1%e.

North America

  • (US) House of Representatives sets Sept 25th as date for markup of Build Back Better Act.
  • (US) Fed Chair Powell and Treasury Sec Yellen to appear before Senate Banking Committee on Tuesday at 10ET [Sept 28th].
  • Nike [NKE]: Reports Q1 $1.16 v $1.12e, Rev $12.2B v $12.5Be; Expects Q2 Rev growth to be flat to down low single digits as factory closures impact production and delivery for the holiday and spring seasons.

Europe

  • (EU) ECB chief Lagarde: Many causes of higher prices are temporary; not tapering stimulus but recalibrating program- press interview.
  • (UK) Sept GfK consumer Confidence: -13 v -7e.

Levels as of 01:20 ET

  • Nikkei 225, +2%, ASX 200 -0.4% , Hang Seng -0.1%; Shanghai Composite -0.2% ; Kospi -0.2%.
  • Equity S&P500 Futures: flat; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 flat.
  • EUR 1.1747-1.1737 ; JPY 110.44-110.25 ; AUD 0.7317-0.7288 ;NZD 0.7081-0.7059.
  • Gold +0.1% at $1,751/oz; Crude Oil flat at $73../brl; Copper +0.2% at $4.2412/lb.
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