Asian Market Update: Rebound infected by NYC Ebola scare; China property prices continue to slide
Economic Data
- (CN) CHINA SEPT NEW HOME PRICES M/M: PRICES RISE IN 0 OF 70 CITIES V 1 PRIOR; Y/Y: PRICES RISE IN 10 OF 70 CITIES V 48 PRIOR
- (CN) CHINA SEPT CONFERENCE BOARD LEADING ECONOMIC INDEX M/M: 0.9% V 0.7% PRIOR (6th consecutive increase)
- (KR) SOUTH KOREA Q3 PRELIMINARY GDP Q/Q: 0.9% V 0.9%E; Y/Y: 3.2% V 3.3%E
- (NZ) NEW ZEALAND SEPT TRADE BALANCE (NZ$): -1.35B V -625ME; Record trade deficit, 3rd straight deficit
Index Snapshot (as of 02:30 GMT)
- Nikkei225 +0.9%, S&P/ASX +0.5%, Kospi -0.5%, Shanghai Composite +0.1%, Hang Seng -0.4%, Dec S&P500 -0.5% at 1,936
Commodities/Fixed Income
- Dec gold flat at $1,230, Dec crude oil -0.8% at $81.40/brl
- (AU) Australia MoF (AOFM) sells A$600M in 2024 Bonds; Avg yield: 3.3028%; Bid-to-cover: 4.0.2x
- (JP) BOJ offers to buy ¥350B in 1-3yr JGB, ¥300B in 3-5yr JGB, ¥400B in 5-10yr JGB as well as ¥2.25T in T-bills
- (CN) China MoF sells 30-yr bonds at 4.3% yield - financial press
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1467 v 6.1459 prior setting (weakest setting since Oct 9th)
- (US) Weekly Fed Balance Sheet Total Assets for week ending Oct 22nd: $4.48T v $4.47T prior; M1 y/y change: 10.4% (4-month low) v 10.7% w/w; M2 y/y change: 6.3% (4-month low) v 6.4% w/w
Market Focal Points/Key Themes/FX
- After several days in remission, Ebola concerns have resurfaced with a vengeance, initially spoiling about a third of a steep rally in the final hour of US trading session and subsequently turning back risk flows in Asia. A doctor who had volunteered in Africa and recently returned to NYC was reported to have checked into the hospital this afternoon with symptoms. Subsequent tests have now come back positive. The rest of the story still seems somewhat murky but the key factors as reported are as follows: 1) Patient left Guinea on Oct 14th; 2) He did not show symptoms on the flight; 3) He quarantined himself to minimise the risks; 4) At some point during his quarantine, he ventured out to a bowling alley in Brooklyn while taking public transportation (subway and Uber); 5) He has been in close contact with 4 people who are now under observation; 6) First symptoms appeared this morning; 7) The patient is treated at Bellevue, one person under observation has also checked in, and the others are quarantined at home. US equity futures briskly sold off by as much as 15 handles following reports of confirmed infection, while USD/JPY fell over 25pips below ¥108 as Treasuries rallied.
- China released another troubling report on the housing sector, with property prices rising y/y in just 10 out of 70 cities vs 48 in the prior month. M/M declines across the all-70 locations maintained their trend of -1.0%, while y/y prices fell 1.1% after rising 0.5% in Aug. Separately, Conference Board released its China Sept economic index. Despite another modest rise, resident CB economist warned that "sharp weakening in demand for both bank credit and real estate point to sluggish private investment in the last quarter of 2014."
- New Zealand put out its trade data for the month of September, registering a record high and also a 3rd consecutive trade deficit. Export volume was roughly in line with estimates, even as shipments to China fell an outsized 30% y/y. Exports of dairy were also down low double-digits. Imports were the key driver of the deficit, coming in at a record high with inclusion of the Dreamliner aircraft for Air New Zealand. NZD/USD hit a 2-week low below $0.78 on the release.
Equities
US markets:
- RUBI: Reports Q3 $0.05 adj v -$0.05 y/y, R$32.2M v $29.1Me (2 est.), raises FY14 -$0.06 to -$0.03 v -$0.36e, R$122-123 v $119Me (prior -$0.41 to -$0.34, R$117-119M); +19.2% afterhours
- KLAC: Reports Q1 $0.47 v $0.46e, R$643M v $622Me; Intends to pursue a leveraged recap; to issue special $16.50/share cash dividend; to buyback an additional 3.6M shares; +15.9% afterhours
- DRIV: To be acquired by investor group led by Siris Capital Group for $26.00/shr in cash; deal valued at approx $840M; +15.1% afterhours
- RP: Said to have been approached by possible buyers - FT; +13.4% afterhours
- MXWL: Announces Development Agreement with Corning to Advance Ultracapacitor Technologies; +12.9% afterhours
- N: Reports Q3 $0.11 adj v $0.04e, R$143.7M v $141Me; +4.3% afterhours
- MSFT: Reports Q1 adj $0.65 v $0.49e, R$23.2B v $21.9Be; +3.1% afterhours
- CB: Reports Q3 $2.17 v $1.95e, R$3.38B v $3.37Be; +2.0% afterhours
- IM: Reports Q3 $0.62 v $0.62e, R$11.2B v $10.9Be, guides Q4 $0.95-1.02 v $0.98e; Rev +8-12% y/y (implies $12.7-13.2B v $12.5Be); +1.8% afterhours
- CBI: Reports Q3 $1.51 v $1.39e, R$3.38B v $3.45Be; +1.2% afterhours
- JNPR: Reports Q3 $0.36 v $0.35e, R$1.13B v $1.13Be; +0.9% afterhours; Approves $1.1B increase in buyback program (11% of market cap); +0.9% afterhours
- LMT: Said to have reached a $4B F35 jet deal with the Pentagon - financial press; +0.6% afterhours
- ALTR: Reports Q3 $0.38 v $0.37e, R$499M v $491Me; guides Q4 Rev -6% to -2% q/q implies $469.6-489.6M v $487Me; -3.7% afterhours
- OLN: Reports Q3 $0.33 v $0.42e, R$593.6M v $612Me; -6.0% afterhours
- FLS: Reports Q3 $0.93 v $1.00e, R$1.21B v $1.29Be; -6.6% afterhours
- UFCS: Reports preliminary Q3 EPS -$0.03 to $0.01 v $0.30e (1 est.); -8.5% afterhours
- P: Reports Q3 $0.09 (adj) v $0.08e, R$239.6M v $238Me; -8.7% afterhours
- AMZN: Reports Q3 -$0.95 v -$0.73e, R$20.6B v $20.8Be; -10.7% afterhours
- SYNA: Reports Q1 $1.04 v $1.18e, R$282.7M v $287Me; -12.3% afterhours
Notable movers by sector:
- Consumer Discretionary: Qantas Airways QAN.AU +3.4% (AGM comments)
- Financials: AMP Limited AMP.AU +3.2% (Q3 results); Monex Group 8698.JP -2.4% (H1 results)
- Industrials: GWA Group GWA.AU +1.1% (FY15 guidance); Great Wall Motor 2333.HK -2.2% (Q3 results)
- Technology: ZTE Corp 763.HK +1.4% (Q3 results); Kingsoft 3888.HK -7.4% (Q3 results); Hitachi High-Technologies 8036.JP +2.2% (H1 results)
- Telecom: China Unicom 762.HK +2.4% (Q3 results)
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0850 after US housing data
EUR/USD trades in negative territory at around 1.0850 in the early American session on Tuesday. The US Dollar preserves its strength following the upbeat housing data and makes it difficult for the pair to gain traction. The two-day Fed meeting goes underway on Tuesday.
GBP/USD recovers modestly from two-week lows, trades near 1.2700
GBP/USD staged a modest rebound after touching its lowest level in two weeks below 1.2700 on Tuesday. The cautious market mood helps the US Dollar hold its ground and limits the pair's upside as markets gear up for the Fed and the BoE policy meetings.
Gold stays in daily range near $2,160
Gold fluctuates in a narrow band at around $2,160 for the second consecutive day on Tuesday. Ahead of the Fed's policy announcements, the benchmark 10-year US Treasury bond yield moves sideways near 4.3% and limits's XAU/USD's volatility.
Why is the crypto market crashing?
The two most important contribution to the ongoing bull market is the meteoric rise in Bitcoin due to the ETF approval and the sudden interest spike in Solana ecosystem. But the recent move suggests that the upward momentum is dissipating and a correction looms.
Shocker, Yen weakens after BoJ hike
The Bank of Japan (BoJ) scrapped its negative rate policy, raised the rates from -0.10% to 0%, ditched its YCC policy and ended the purchases of ETF and Japanese real estate investment trusts.