China Said To Cancel HK Anti-Sanctions Law

Oct 05 21, 06:14 GMT

General trend

Equity indices generally pare losses [particularly HK].
TECH lags after Nasdaq drop.
Energy cos. trade higher after recent rise in crude oil amid OPEC.
Hang Seng pares over 1% drop [TECH and Property indices are off the lows].
News related to HK/CN property developers remains in focus [Fantasia, Sinic Holdings]; Evergrande asset sale uncertainty remains; Various property developers’ USD bonds decline amid Fantasia news.
Nikkei has dropped by >3% [currently off of the lows]; Heavyweights decline (Fast Retailing and Softbank Group); Topix Marine Transportation index extends drop; Japan’s new PM commented on tax on investments.
S&P ASX 200 Energy index rises, Resources and Financial indices pare declines.
Rise seen in USD index after prior drop.
Japan sells 10-yr JGBs at lowest BTC since 2015, yield rose at the auction.
Shanghai markets are closed for holiday from Oct 1-7 (Fri-Thurs).
US ISM Services data due later today.

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened 0.0%.
(AU) China said to be still accepting coal deliveries from Australia despite ‘import ban’ – FT.
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%; AS EXPECTED; Maintains weekly bond purchases at
A$4.0B.
(AU) Australia Aug Trade Balance (A$): 15.1B v 10.7Be (record surplus).
(NZ) New Zealand Q3 NZIER Business Confidence: -11% v 7% prior; Capacity Utilization: 96.1% v 92.8% prior.
(AU) Australia Sept AIG Construction Index: 53.3 v 38.4 prior.

Japan

Nikkei 225 opened -1.4%.
(JP) Japan MoF sells ¥2.6T v ¥2.6T indicated in 0.1% 10-year JGBs; avg yield 0.0490% v 0.0230% prior; bid to cover: 2.45x v 3.36x prior (lowest BTC since 2015).
(JP) Said that Japan PM Kishida will appoint Miyazawa as Tax Policy Chief – Nikkei.
(JP) JAPAN SEPT TOKYO CPI Y/Y: +0.3% V -0.1%E; CPI (EX-FRESH FOOD) Y/Y: 0.1% V 0.2%E.
(JP) Japan Sept Final PMI Services: 47.8 v 47.4 prelim (confirms 20th month of contraction).
(JP) Japan PM Kishida: Need to think about tax on investments [comments from Oct 4th].
(JP) Japan PM Kishida: Spoke with Biden he reaffirmed security treaty commitments, they agreed to meet in person soon.
(JP) Japan Fin Min Suzuki: Affirms goal of primary balance surplus by FY25; Must provide economic support for suffering businesses without interruption.
(JP) Japan Econ Min Yamagiwa: Wants to unveil new economic package before end of year; Will be nimble in deploying macroeconomic measures.
(JP) Japan METI: Current Administration will continue prior admin’s ideas on nuclear power.
(JP) Japan Official Kaneko says to follow Suga mobile phone policy – Japanese press.
(JP) Japan Chief Cabinet Sec Matsuno: Markets set prices, no comment on market decline today.

Korea

Kospi opened -0.7%.
(KR) South Korea sells 30-year bonds: avg yield 2.205% v 1.970% prior (Aug 30th).
(KR) North Korea reports another missile test (4th time in the last few weeks) of an anti-aircraft weapon – press.

China/Hong Kong

Hang Seng opened -0.1%; Shanghai Composite closed for holiday.
(CN) China said to shelve ambitions for an anti sanctions law in Hong Kong after executive from Chinese and HK financials raised concerns that it would put them in a difficult situation – Press.
(HK) Hong Kong Chief Exec Lam: China has no timetable on Hong Kong anti-sanction law.
(CN) China Foreign Min: China will take all necessary measures to resolutely crush any Taiwan independence plots (US morning).
Fantasia [1777.HK]: Misses $206M principal payment on 2021 notes due Oct 4th; shares halted until further notice.
Fitch downgrades property developer Sinic to C from CCC.
(HK) Macau said to cancel Saturday public casino law consultation due to coronavirus.
(CN) China Banking and Insurance Regulatory Commission (CBIRC): To ban loans for speculating on luxury goods such as Moutai; places ban on loans to speculate in commodities and certain luxury goods; Urged banks to ensure funding the demand of coal and steel companies.
(CN) US National Sec Advisor Sullivan and China Official Yang Jiechi to hold talks in Switzerland – SCMP.

Other

(TW) China again sent 56 warplanes into Taiwan air defense zone Monday, Taiwan called on China to stop “irresponsible provocative actions”.
(SG) Singapore Sept PMI (whole economy): 53.8 v 52.1 prior (10th consecutive expansion).

North America

(CN) US Trade Rep Tai: Next steps on China trade will depend on how talks go; Much depends on Chinese response; Will raise concerns about larger industrial policy issues;
At this point we have not had talks with Chinese officials on intervening issues that have prevented them from meeting ‘Phase 1’ commitments; Will look at all available tools to address US concerns, including Section 301 probes.
(US) California Gov Newsom declares state of emergency in Orange County due to oil spill off the coast.

Europe

(IE) Ireland Sept PMI Services: 63.7 v 63.7 prior (7th consecutive month of expansion).

Levels as of 01:20 ET

Nikkei 225, -2.5%, ASX 200 -0.4% , Hang Seng flat; Shanghai Composite closed ; Kospi -2%.
Equity S&P500 Futures: +0.1%; Nasdaq100 +0.2%, Dax flat; FTSE100 +0.4%.
EUR 1.1622-1.1595 ; JPY 111.20-110.87 ; AUD 0.7296-0.7259 ;NZD 0.6975-0.6937.
Gold -0.4% at $1,760/oz; Crude Oil +0.1% at $77.72/brl; Copper -0.5% at $4.2145/lb.