Markets quiet ahead of Yellen speech at Jackson Hole

Asian Market Update: Analysts calling for more China stimulus after soft flash PMI; Markets quiet ahead of Yellen speech at Jackson Hole

Economic Data

- (TW) TAIWAN JUL UNEMPLOYMENT RATE: 4.0% V 4.0%E

- (US) NORTH AMERICA JULY SEMI BOOK/BILL RATIO: 1.07 V 1.09 PRIOR

Index Snapshot (as of 02:30 GMT)

- Nikkei225 +0.1%, S&P/ASX +0.3%, Kospi +0.6%, Shanghai Composite -0.2%, Hang Seng +0.2%, Sept S&P500 flat at 1,990

Commodities/Fixed Income/Currencies

- Dec gold +0.3% at $1,279, Oct crude oil -0.1% at $93.84/brl, Sept Copper +0.8% at $3.20/lb

- (JP) BOJ offers to buy ¥300B in 1-3yr JGB, ¥200B in 3-5yr JGB, and ¥400B in 5-10yr JGB as well as ¥3T in T-bills

- (AU) Australia MoF (AOFM) sells A$500M in 4.25% bonds due 2017; Average yield: 2.69%; Bid-to-cover: 7.01x (highest bid-to-cover since June 2004)

- (US) Weekly Fed Balance Sheet Total Assets Week ending Aug 20th: $4.41T v $4.43T prior; Reserve Bank Credit: $4.37T v $4.39T prior; M1 y/y change: 10.8% (10-week low) v 13.0% w/w; M2 y/y change: 6.4% (3-month low) v 6.5% w/w

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1617 v 6.1632 prior setting (1st firmer setting in 4 sessions)

Market Focal Points/Key Themes

- The rally on Shanghai Composite appears to have hit a wall after yesterday's surprise slowdown in flash manufacturing PMI. A number of analysts chimed in with cautious notes after digesting the data, calling for more stimulus and scritinizing growth targets. A Barclays economist said the PMI miss will likely result in two interest rate cuts by the PBoC in H2. UBS team wrote that "even with additional policy easing including cuts in mortgage down payment requirement and rates, we see property sales and starts declining further in 2015 and GDP growth slowing to 6.8%". Credit Agricole economist said the PMI is boosting pressure for more easing but maintained its 2014 GDP target at 7.4%.

- Overall trading is generally subdued in Asia going into the critical Jackson Hole symposium on Friday. Yellen speaks at 10amET, while ECB's Draghi

- unlikely to be "outdove" - is scheduled to appear at 2:30pmET. Hawkish dissenter Plosser spoke after the US market close, expressing concern that monetary policy is not reacting to changing data, warning Fed would have to move faster if it waits too long, and also noting wage inflation is too lagging to determine monetary policy. In key USD majors, USD/JPY bounced off the ¥104 psychological resistance while EUR/USD was trapped in a 10pip range around $1.3280.

Equities

US markets:

- QUNR: Reports Q2 -$0.19 v -$0.27e, R$64.5M v $54.4Me; +6.0% afterhours

- GME: Reports Q2 $0.22 v $0.19e, R$1.73B v $1.66Be; +5.1% afterhours

- BRCD: Reports Q3 $0.23 v $0.19e, R$545M v $530Me; +3.8% afterhours

- CRM: Reports Q2 $0.13 v $0.12e, R$1.32B v $1.29Be; +1.0% afterhours

- GPS: Reports Q2 $0.70 v $0.69e, R$3.98B v $3.98Be; +0.7% afterhours

- MRVL: Reports Q2 $0.34 v $0.28e, R$962M v $961Me; +0.5% afterhours

- SCSC: Reports Q4 $0.60 v $0.60e, R$758M v $740Me; approves $120M buyback program (10% of market cap); -0.9% afterhours

- INTU: Reports Q4 -$0.01 v $0.07e, R$714M v $702Me; Raises annual dividend 32% to $1/shr for FY15 (implied yield 1.2%); -1.0% afterhours

- ARO: Reports Q2 -$0.46 v -$0.48e, R$396M v $407Me; -7.2% afterhours

Notable movers by sector:

- Consumer Discretionary: Li & Fung 494.HK -4.6% (H1 results); Bic Camera 3048.JP +2.1% (speculation on FY14 results); Qantas Airways QAN.AU -2.7% (shelves plan for floating loyalty business); Bega Cheese BGA.AU -1.0% (FY14 results); Crown Limited CWN.AU +1.9% (confirms extension of casino license)

- Financials: Bank of Communications 3328.HK +0.2% (H1 results); Federation Centres FDC.AU +3.4% (FY14 results)

- Materials: Anhui Conch Cement 914.HK +0.2% (H1 results); Sims Metal Management SGM.AU -0.1% (prelim FY14 results); Iluka Resources ILU.AU +3.8% (H1 results)

- Energy: Santos Ltd STO.AU +3.4% (H1 results)

- Industrials: Qingling Motor 1122.HK +5.8% (H1 results); Qube Logistics QUB.AU +5.2% (FY14 results); Decmil Group DCG.AU +2.2% (contract valued increased)

- Technology: Comba Telecom Systems 2342.HK +4.7% (H1 results)