China New Yuan Lending Recovers

Asian Market Update: China New Yuan Lending Recovers; Latest YouGov Poll Saps Scotland Independence Momentum

Economic Data

- (CN) CHINA AUG NEW YUAN LOANS (CNY) 702.5B V 700.0BE

- (CN) CHINA AUG M2 MONEY SUPPLY Y/Y: 12.8% V 13.5%E (5-month low); M1 MONEY SUPPLY Y/Y: 5.7% V 6.8%E

- (CN) CHINA AUG AGGREGATE FINANCING (CNY): 0.96T V 1.14TE

- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE AT 2.25% (AS EXPECTED)

- (KR) SOUTH KOREA AUG UNEMPLOYMENT RATE: 3.5% V 3.4%E

- (NZ) NEW ZEALAND AUG FOOD PRICES M/M: +0.3% V -0.7% PRIOR

- (NZ) NEW ZEALAND AUG BUSINESS MANUFACTURING PMI: 56.5 V 53.5 PRIOR (5-month high)

- (NZ) New Zealand REINZ Aug House Price Index: 3,926 v 3,885 prior; M/M: +1.1% v -0.7% prior; House Sales Y/Y: -16.3% v -13.0% prior

- (PE) PERU CENTRAL BANK CUTS REFERENCE RATE BY 25BPS TO 3.50%, AS EXPECTED

- (CL) CHILE CENTRAL BANK CUTS OVERNIGHT RATE TARGET BY 25BPS TO 3.25%, AS EXPECTED

Index Snapshot (as of 02:30 GMT)

- Nikkei225 +0.4%, S&P/ASX -0.4%, Kospi +0.3%, Shanghai Composite +0.1%, Hang Seng -0.3%, Sept S&P500 flat at 1,997

Commodities/Fixed Income/Currencies

- Dec gold -0.4% at $1,234/oz, Oct crude oil flat at $92.83/brl, Dec copper flat at $3.09/lb

- GLD: Spot gold moves below $1,235/oz; 7-month lows

- SLV: Spot silver moves below $18.60; 15-month lows

- SLV: iShares Silver Trust ETF daily holdings rise to 10,454 tonnes from 10,408 tonnes prior (highest since Nov 2013)

- (JP) BOJ offers to buy ¥300B in 1-3yr JGB, ¥200B in 3-5yr JGB, ¥100B in 10-25yr JGB, ¥30B in JGB with maturity over 25-yr, and ¥250B in T-bills

- (AU) Australia MoF (AOFM) sells A$600M in 5.5% bonds due 2018; Avg yield: 2.9094%; Bid-to-cover: 4.81x

- (US) Weekly Fed Balance Sheet Total Assets for week ending Sept 10th: $4.42T v $4.42T prior; Reserve Bank Credit: $4.38T v $4.37T prior; M1 y/y change: 11.3% (6-week low) v 11.4% w/w; M2 y/y change: 6.6% v 6.6% w/w

Market Focal Points/Key Themes

- Shanghai Composite reversed initial 0.4% slide to enter midday break marginally higher after New Yuan loans slightly topped consensus estimates. M2 money supply hit 5-month lows at 12.8%, but was in line with the levels forecasted by China Premier Li earlier this week. Moreover, the PBoC said M2 growth is still within a reasonable range and on track to reach 13% target this year.

- GBP/USD spiked up about 50pips to $1.6275 - a 1-week high - after the latest YouGov poll put the No vote on Scotland referendum back in favor by a 52-48% margin. This follows a 150pip drop in cable to start this week when the Yes vote initially took its first lead in the polls. Recalls that today's poll also follows a strong showing for the loyalists in the Scottish Daily Record earlier this week which printed at 53% in favor of No's.

- USD/JPY hit fresh 6-year highs above 107.30, reversing earlier decline in the US hours when BOJ Gov Kuroda said there is no need for further policy easing yet. Econ Min Amari stated PM Abe remains "neutral" on 2nd round of sales tax hike decision and also deferred to answer whether the current JPY level is appropriate.

- BOK was on hold at 2.25%, as widely speculated by analysts, though one board member dissented in favor of further easing. BOK said inflation pressures will not be high for time being, and that it is closely monitoring the impact of the end of Fed easing. BOK Gov Lee was also relatively cautious, noting business sentiment has yet to improve and that the latest rise in lending may be temporary. USD/KRW level hit a 1-month high around KRW1,040 following the decision. Separately, South Korea Finance Ministry monthly report stated economic recovery remains fragile amid soft investment sentiment.

- A press report cited the latest CIA memo indicating ISIS could have 2-3x the initially estimated number of armed militants in Syria/Iraq at 20 to 31.5K.

Equities

US markets:

- CNVR: Alliance Data to acquire Conversant at $35/shr in cash and stock valued at $2.3B; ADS sees immediate accretion; +31.2% afterhours

- ULTA: Reports Q2 $0.94 v $0.82e, R$734.2M v $711Me; +14.1% afterhours

- SPWH: Reports Q2 $0.12 v $0.10e, R$159.5M v $156Me; +7.6% afterhours

- EBAY: Execs say eBay to launch its first mobile advertising business in Q4; will allow marketers to place ads on home screen of mobile device apps - Recode; +0.2% afterhours

- OXBT: Halts Oxycyte Phase IIb Traumatic Brain Injury Trial; -8.9% afterhours

- S: Announces Exclusive New Rate Plan for iPhone 6 and iPhone 6 Plus and a Revolutionary New Way to Acquire iPhone

Notable movers by sector:

- Consumer Discretionary: Asahi Group 2502.JP -1.8% (press reports on lower Japan beer sales); Myer Holdings MYR.AU -6.1% (analyst actions)

- Financials: National Australia Bank NAB.AU -0.6% (UK unit contingency plans); CITIC Limited 267.HK -4.5% (receives order for HK$1.9B compensation on fx trading loss in 2008)

- Energy: Offshore Oil Engineering 600583.CN +3.3%, China Oilfield Services 601808.CN +2.2% (China invites foreign companies to bid for offshore oil projects)

- Healthcare: Astellas Pharma 4503.JP +3.5% (FDA approves Xtandi)