Asia Summary
With the Nikkei 225 closed in observance of a holiday, Asian equity markets opened the session generally higher. Australia’s S&P ASX 200 index has hit a fresh high for 2017, amid gains in the mining and energy sectors. BHP has gained over 1%, while shares of gold miner Newcrest are up over 2%.
As of the time of writing, Nasdaq Futures have gained over 0.1%, as shares of Apple traded higher in the afterhours, following its financial results and guidance.
Amid the results, Samsung Electronics, which has gained over 4% this week, is trading lower by over 1%. Shares of Taiwan Semi are also down by about 1%. In Hong Kong, Tencent has gained over 1% and moved to a fresh all-time high.
With the Reserve Bank of Australia (RBA) due to hold its policy meeting next week (Tuesday, Nov 7th), the Aussie has declined by over 0.15%. In Sept, retail sales missed market expectations for the 3rd straight month. Amid the data, Australia’s 3-year bond yield has dropped over 5bps on the session.
China’s 10-year bond yield is generally stable. Earlier today, the PBoC skipped its regular open market operation (OMO) and instead confirmed a medium-term lending facility (MLF) operation, which was speculated earlier in the week. Recall, it was reported earlier in the week that liquidity conditions in China may tighten in the near term with around CNY1T in funds expected to mature this week, said the China Securities Journal.
In terms of emerging market debt, Venezuela’s President Maduro said state oil company PDVSA would on Friday make a $1.1B payment of bonds due in 2017 to JPMorgan. He also said, however, that the country will restructure all of its foreign debt, following the payment by PDVSA.
Looking ahead, the later today release of the US Oct nonfarm employment report will be in focus, along with ISM Non-Manufacturing PMI.
Key economic data
(AU) Australia Sept Retail Sales M/M: 0.0% v 0.4%e; Q3 Ex Inflation Q/Q: 0.1% v 0.0%e
(CN) CHINA OCT CAIXIN PMI SERVICES: 51.2 V 50.6 PRIOR; COMPOSITE: 51.0 V 51.4 PRIOR
(KR) South Korea Sept BoP Current Account Balance: $12.2B (record) v $6.1B prior; Goods Balance: $15.0B v $9.3B prior
(KR) South Korea Oct Foreign Reserves: $384.5B v $384.7B prior
Speakers and Press
China
(CN) NDRC issues draft guidelines on overseas investment by China companies
Other
(VE) Venezuela President Maduro: Will pay bonds tomorrow morning; payment on PDVSA bond to start on Friday; To restructure all foreign debt after tomorrow
Asian Equity Indices/Futures (00:30ET)
Nikkei closed, Hang Seng +0.3%, Shanghai Composite -0.7%, ASX200 %, Kospi -0.2%
Equity Futures: S&P500 flat ; Nasdaq +0.3% , Dax flat , FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:30ET)
EUR; 1.1654-1.1666; JPY 113.90-114.09; AUD 0.7682-0.7716; NZD 0.6908-0.6929
Aug Gold flat at 1,277/oz; Aug Crude Oil +0.5% at $54.81/brl; Sept Copper +0.4% at $3.149/lb
GLD SPDR Gold Trust ETF daily holdings -0.4% at 846.0 metric tons
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6072 V 6.6196 PRIOR
(CN) PBOC CONFIRMS CNY404B MEDIUM-TERM LENDING FACILITY (MLF) OPERATION; Offers 1-year loans at 3.20% v 3.20% prior
(CN) PBoC OMO: Skips OMO v skipped prior; Weekly net drain CNY110B v CNY390B injection w/w
(AU) AUSTRALIA SELLS A$500M IN DEC 2021 BONDS, AVG YIELD 2.0919%, BID TO COVER 7.25X
US markets on close: Dow +0.4%, S&P500 0.0%, Nasdaq 0.0%, Russell +0.3%
Best Sector in S&P500: Financials +0.9%
Worst Sector in S&P500: Consumer Discretionary -0.8%; Materials -0.7%
At the close: VIX 9.93 (-0.27pts); Treasuries: 2-yr 1.616% (+1.5bps), 10-yr 2.372% (flat), 30-yr % (-2bps)
US Market Summary
US indices opened largely flat after the Bank of England raised rates for the first time in roughly a decade, but moved lower after the opening bell as the long-awaited details of the Republican tax plan were finally leaked. To this point much has been in line with the run-up speculation, but it remains clear that there remain likely key sticking points that will be heatedly debated, such as the caps on mortgage interest and state/local taxes deductability. Treasury prices firmed and yields slipped; homebuilder stocks ticked lower on the release. In the afternoon, Pres Trump officially named Jerome Powell to the Fed, which had been expected for several days, but markets got a bit of a lift from the announcement. Financials, REITs, and utilities outperformed on the day, while telecom, energy, materials and consumer discretionary lagged.
US Afterhours Movers
AAPL Reports Q4 $2.07 v $1.87e, Rev $52.6B v $51.2Be; Guides Q1 Rev $84-87B v $83.3Be, gross margin 38-38.5%; guides op-ex $7.65-7.75B; +3.4% afterhours
SBUX Reports Q4 $0.55 v $0.55e, Rev $5.70B v $5.73Be; Raises dividend 20%; Estab $15B 3-yr buyback plan (~19% market cap); -6.7% afterhours
