NZD Drops After Widely Expected RBNZ Rate Hike

Oct 06 21, 06:13 GMT

General trend

US equity FUTS decline in Asia.
Nikkei has declined by over 1.5% after the higher open [Heavyweights continue to weigh on the index (Fast Retailing and Softbank Group)]; Topix Marine Transportation index drops again, Banks rise.
Hang Seng has also reversed the opening gain, has currently pared loss [TECH and Property indices drop, but pare declines during morning trading].
S&P ASX 200 has been weighed down by Financials.
Copper FUTs extend decline.
Companies expected to report during the NY morning include Madison Square Garden, RPM International, Constellation Brands.
Shanghai markets are closed for holiday from Oct 1-7 (Fri-Thurs).

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%.
(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) RAISES OFFICIAL CASH RATE (OCR) 25BPS TO 0.50%; AS EXPECTED (1st rate hike since July 2014).
MFG.AU Reports Sept FUM (A$) 113.3B v 118.0B prior; Outflows A$1.53B.
(AU) Australia sells A$1.0B v A$1.0B indicated in 1.75% Nov 2032 bonds, avg yield %1.6137, bid to cover: 5.88x.
(NZ) Reserve Bank of New Zealand (RBNZ) Appoints Assitant Gov Hawkesby as Deputy Gov, replacing Bascand who is leaving in January.
(CN) China said to have released coal from Australia that has been “trapped in storage” – FT.

Japan

Nikkei 225 opened +0.8%.
4502.JP Safety signal emerged in its phase 2 study of investigational oral orexin agonist TAK-994; suspended dosing of patients as a precautionary measure.
(JP) Japan PM Kishida approval rating at 59% (3rd lowest for inaugural ratings among 9 prime ministers going back to 2002.
(JP) Japan Chief Cabinet Sec Matsuno: Stopping decline in Japan R&D Capability is important; CPI not as weak as headline numbers indicate.
(JP) Bank of Japan (BOJ) Gov Kuroda: Economy has picked up led by exports and manufacturing, high US GDP Growth has supported global economic growth).
(JP) Japan Fin Min Suzuki: PM has instructed me to be flexible on policy; will seek a new type of capitalism and peruse fiscal health and growth at the same time (yesterday after the close).
(JP) Japan Econ Min Yamagiwa: Govt will take all necessary measures to support the economy “in a flexible manner without hesitation” (yesterday after the close).
(JP) Japan Industry Min Hagiuda: Nuclear power is indispensable to decarbonizing Japan (yesterday after the close).

Korea

Kospi opened %.
(KR) SOUTH KOREA SEPT CPI M/M: 0.5% V 0.4%E; Y/Y: 2.5% V 2.4%E (6th straight month above target); CPI Core Y/Y: 1.9% v 1.8%e (fastest increase since 2017).
(KR) Japan spotted North Korea ship carrying missiles in June off the coast of Ishikawa prefecture – Japan press.

China/Hong Kong

Hang Seng opened +0.6%; Shanghai Composite closed for holiday.
(HK) Hong Kong Aug PMI (Whole Economy): 51.7 v 53.3 prior (8th consecutive expansion).
880.HK Said to shut down 1 Macau casino ops due to a coronavirus patient visiting – Press.
2393.HK Updates on debt restructuring: Proposed new offshore debt restructuring and Agreement for $200M 6.9% notes due 2021; to issue new notes under the agreement.
(HK) Hong Kong Chief Exec Lam: Hong Kong to continue with Article 23 National Security Legislation, confirms housing project in the North – Annual Policy Address.

Other

(TW) US President Biden: Spoke with China President Xi on Taiwan; Agreed to abide by Taiwan agreement.
(TW) Taiwan Ministry of National Defense (MND): China is unsure if an attack on Taiwan would succeed, could be ready for full scale invasion of Taiwan by 2025 – Taiwanese Press.

North America

(CN) USTR seeking public comment on tariff exclusions for 549 China import categories – press.

Europe

(UK) PM Johnson reportedly plans to announce a ‘significant’ boost to minimum wage within next few weeks – UK’s Times.
(IE) Ireland Central Bank raises 2021 GDP outlook to 15.3% (prior 8.3%) due to a stronger than expected surge in consumption that will add to inflationary pressure; also raises modified domestic demand outlook.

Levels as of 01:00ET

Hang Seng -0.9%; Shanghai Composite closed for holiday; Kospi -1.5%; Nikkei225 -1.3%; ASX 200 -0.7%.
Equity Futures: S&P500 -0.6%; Nasdaq100 -0.6%, Dax -0.7%; FTSE100 -0.7%.
EUR 1.1604-1.1583; JPY 111.76-111.43 ;AUD 0.7297-0.7254; NZD 0.6980-0.6919.
Commodity Futures: Gold -0.4% at $1,753/oz; Crude Oil +0.1% at $78.97/brl; Copper -1.0% at $4.14/lb.