Asia Summary
Asian equity markets opened mixed, with the Kospi coming back from holiday break rising 1.3% at the open (Samsung especially strong ahead of Friday earnings) and Chinese markets lower after a strong day yesterday. Currencies were muted in the first part of the session before broad dollar weakness took hold. North Korea continues to be cautiously eyed for its next provocation with top possibilities being sometime today, on its Party Founding Day or on Oct 18th when China holds it 19th National Congress of the Communist Party.
China and South Korea are in negotiations to extend their FX swap agreement with talks taking place today. Japan name, Kobe Steel, under pressure, after admitting to falsifying reports related to materials. So far it seems to only impact domestic product for Japan carmakers. BOJ Gov Kuroda affirmed that he expects CPI to pick up pace towards 2% target; Will maintain QQE with YCC for as long as needed to reach 2% inflation in stable manner. USD/JPY remained little changed throughout the session. In New Zealand parties continue to negotiate with NZ First to form a government.
Key economic data
(NZ) NEW ZEALAND SEPT CARD SPENDING RETAIL M/M: 0.1% V 0.7%E; TOTAL M/M: -0.1% V 0.6% PRIOR
(JP) JAPAN AUG BOP CURRENT ACCOUNT ADJ ¥2.27T V ¥1.98TE; CURRENT ACCOUNT BALANCE: ¥2.38T V ¥2.22TE
(AU) Australia Sept NAB Business Conditions: 14 v 14 prior; Confidence: 7 v 5 prior
Speakers and Press
Korea
(KR) North Korea last year hacked top secret military documents including detailed plans between US/South Korea if a N. Korea war breaks out – Korean press
(CN) China and South Korea officials agree to extend FX swap agreement – Korean press
China
(CN) PBOC Gov Zhou: China must press on with a "trinity" of reforms to fully realize an open economy – Caijing
(CN) China Stats Bureau Chief: China has no problem meeting 2017 GDP growth target of ~6.5%, may beat target
(CN) Moody’s: Continued product mix in Chinese life insurers bodes well for solvency ratios in coming 12-18 months
(CN) China Stats Bureau Head: Sept survey-based jobless rate in major cities 4.83% (lowest since 2012)
Japan
(JP) Bank of Japan (BoJ) Gov Kuroda: Expects CPI to pick up pace towards 2% target; Will maintain QQE with YCC for as long as needed to reach 2% inflation in stable manner
Asian Equity Indices/Futures (00:00ET)
Nikkei +0.4%, Hang Seng +0.1%; Shanghai Composite -0.3%; ASX200 -0.2%, Kospi +1.8%
Equity Futures: S&P500 +0.0%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 +0.2%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1782-1.1739; JPY 112.83-112.61; AUD 0.7790-0.7750;NZD 0.7088-0.7056
Dec Gold +0.3% at $1,289/oz; Nov Crude Oil +0.1% at $49.63/brl; Dec Copper +0.6% at $3.05/lb
(AU) Australia sells A$150M in 1.25% 2040 indexed bonds; avg yield 1.2167%; bid-to-cover 2.60x
USD/CNY *(CN) CHINA PBOC SET YUAN REFERENCE RATE AT 6.6273 V 6.6493 PRIOR
(CN) China PBOC injects CNY40B in 7-day reverse repos v skips prior
(KR) Bank of Korea (BOK) sells KRW0.5T v KRW0.5T indicated in 6-month stabilization bonds; avg yield 1.41% v 1.33% prior
(KR) South Korea sells 5-yr bonds; avg yield 2.135%
Equities notable movers
Australia/New Zealand
PPS.AU Reports Q1 FUA A$6.66B v A$6.11B prior; +13.5%
ESV.AU Cuts FY17 Rev €9.7-11.0M (prior €15-19M); +8.3%
Japan
5406.JP Admitted it had falsified data on some aluminum and copper parts products – Japan press; -22%, limit down
Korea
006400.KR Said to be bidding for lithium development project in Chile; +8.5%
China/Hong Kong
2380.HK Proposes rights issue on basis of up to one rights share for every three existing shares – filing; -6.5%
