Asia Summary
Asian equity markets opened higher (Japan closed) taking its cue from a strong US session Friday. Hong Kong Hang Seng tested levels not seen since Dec 2007. The PBOC injected CNY300B in OMO, the most since January. NZD rose 0.5% against the US dollar after opening slightly weaker on New Zealand Refining disclosing a leak in a pipeline. So far the company is unsure how long it will take to repair and as a result the Govt is support supplies to Air New Zealand and Auckland airport. Both the Kospi and the won failed to react to North Korea activity and rhetoric. Trump spoke with S. Korea President Moon over the weekend and a US aircraft carrier is expected in South Korea in October. China released its August property price data, showing a modest slowdown, property names in China and Hong Kong took some strength on the news. Markets to remain focused on Fed meeting later this week and Bank of Japan.
Key economic data
(SG) SINGAPORE AUG NON-OIL DOMESTIC EXPORTS M/M: 4.5% V 3.1%E; Y/Y: 17.0% V 11.8%E; ELECTRONIC EXPORTS Y/Y: 21.7% V 15.0%E
(AU) AUSTRALIA AUG MOTOR VEHICLE SALES M/M: 0.0% V -2.4% PRIOR; Y/Y: 1.7% V 1.7% PRIOR
(CN) CHINA AUG PROPERTY PRICES M/M: RISE IN 46 OUT OF 70 CITES VS 56 PRIOR; Y/Y RISE IN 68 OUT OF 70 CITIES VS 70 PRIOR
Speakers and Press
China/Hong Kong
(CN) China economic growth may slow down in Q4, sees 2017 GDP at 6.8% – Chinese press
(CN) China Banking Regulatory Commission (CBRC) reports Aug Bank Bad Loan Ratio 1.86% – Xinhua
(CN) China Insurance Regulator (CIRC) to strengthen risk prevention by preventing risks stemming from excessive rapid growth in overseas investments – financial press
(HK) HKMA Chief Chan: Have confidence in HK$, no plans to change the peg; HK needs to diversify in terms of IPOs
Korea
(KR) According to KCNA, Kim Jong Un guided Hwasong-12 launching drill; Drill conducted to calm down “belligerence of the US"
(CN) South Korea investment into China for July YTD $1.75B v $3.1B y/y, -43.7% y/y – Korean press
(KR) South Korea defense ministry official: There is possibility of North Korean provocation, including additional ballistic missile launches and 7th nuclear test
Australia/New Zealand
(AU) Moody’s: Australia residential mortgage arrears are at a 5-yr high and expected to increase
(AU) S&P: Australia July delinquent home loans underlying prime RMBS 1.17% v 1.15% m/m
Japan
(JP) Japan PM Abe said to be considering snap election as soon as Oct – financial press
Asian Equity Indices/Futures (00:00ET)
Nikkei closed, Hang Seng +1.1%; Shanghai Composite +0.2%, ASX200 +0.5%, Kospi +1.1%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax +0.4%, FTSE100 +0.3%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1955-1.1920; JPY 111.25-110.81; AUD 0.8035-0.7995;NZD 0.7343-0.7277
Dec Gold -0.3% at $1,321/oz; Nov Crude Oil 0.0% at $50.45/brl; Sept Copper +0.9% at $2.98/lb
(AU) Australia repurchases A$700M in 2018 and 2019 bonds, bid to cover 4.22x
(AU) Australia sells A$700M in 3.75% 2029 bonds; avg yield 2.8842%; bid-to-cover 3.39x
USD/CNY (CN) China PBOC sets yuan reference rate at 6.5419 v 6.5423 prior
(CN) PBoC OMO: injects CNY300B in 7 and 28-day (largest injection since January) vs injected combined CNY200B in 7,14 and 28 day reverse repos prior
(KR) Bank of Korea (BOK) sells KRW480B in 6-month bonds at 1.33%
(KR) South Korea Govt sells KRW629B 20-yr bond 2.28% v 2.38% prior
Equities notable movers
Australia/New Zealand
NZO.AU Confirms O.G Oil’s partial takeover offer to acquire 67.6% stake; to create independent committee to respond; +3.5%
EVN.AU To sell Edna May mine to Ramelius for up to A$90M; Cuts FY18 production guidance following deal to 750-805K ozs (820-880K prior) at AISC of A$820-A$870/oz (prior A$850-900/oz)
NZR.NZ Reports leak at pipeline from refinery to Wiri; to impact revenues by NZ$10-15M, sees negative impact on income for pipeline and refining businesses; -3.2%
Hong Kong/China
2196.HK Updates offer for Gland Pharma: to acquire 74% stake for $1.09B; +2.6%; 656.HK Fosun International Ltd, +9.3%
US
OA Northrop Grumman said to be near deal to acquire Orbital ATK for over $7.5B in cash; deal could be announced as early as Monday – US financial press
