BOJ minutes justify no QE in October

Asian Mid-session Update: Caution from Turkish-Russian tensions extend to Asia; BOJ minutes justify no QE in October

Economic Data

- (AU) AUSTRALIA Q3 CONSTRUCTION WORK DONE Q/Q: -3.6% V -2.0%E; biggest decline in 4 years

- (AU) AUSTRALIA OCT SKILLED VACANCIES M/M: 0.6% V 1.1% PRIOR

- (JP) JAPAN OCT PPI SERVICES Y/Y: 0.5% V 0.5%E

- (CN) China Oct Westpac Consumer Confidence index: 113.1 v 109.7 prior

- (SG) SINGAPORE Q3 FINAL GDP Q/Q: 1.9% V 0.0%E; Y/Y: 1.9% V 1.4%E

Index Snapshot (as of 04:30 GMT)

- Nikkei225 -0.5%, S&P/ASX -0.2%, Kospi -0.1%, Shanghai Composite +0.2%, Hang Seng -0.5%, Dec S&P500 flat at 2,085

Commodities/Fixed Income

- Dec gold +0.5% at $1,078/oz, Jan crude oil flat at $42.87/brl, Mar copper -0.4% at $2.06/lb

- (US) API Petroleum Inventories: Crude: +2.6M v -0.48M prior

- (CN) NDRC: China YTD Jan-Oct coal production was down 3.6% y/y to 3.05B tons - Shanghai Daily

- JGB: (JP) Japan's MoF sells ¥1.09T in 1.2% (1.2% prior) 20-year JGBs; Avg yield: 1.078% v 1.078% prior; bid-to-cover: 3.59x v 3.04x prior (bid-to-cover highest level since Dec 2014)

- (CN) China MOF sells CNY28B in 3-yr bonds, avg yield 2.7961% v 2.82%e

- (AU) Australia MoF (AOFM) sells A$700M in 4.75% 2027 Bonds; avg yield: 3.0424%; bid-to-cover: 2.36x

Market Focal Points/FX

- Geopolitical tensions stemming from Turkey military downing a Russian jet allegedly in its airspace has spilled over into Asian session trade. Safe-haven Yen bid saw USD/JPY pair down about 30pips below 122.30, pressuring Nikkei225. Hang Seng is down 0.5%, while Shanghai, Australia, and Korea are little changed. USD accumulation has also been reversed for the moment, as demand for US treasuries put some slight pressure on US rates - EUR/USD was up some 30pips above 1.0670 and AUD/USD up over 20pips above 0.7270. Crude Oil has come off the late US session lows and heading for its 4th straight overall gain near $43/brl, while gold traded back up to $1080 - up over $5 and rising for the 2nd straight day.

- BOJ policy minutes from the late-Oct meeting showed sufficient optimism to allow the central bank to hold off on adding to QE which had been anticipated by a minority of analysts. All members agreed wage growth is somewhat slow, but most also noted underlying inflation trend is improving. Members remain on edge about risks of slower growth due to FY17 sales tales tax hike. BOJ's Shirai said she expects economic recovery to remain moderate, but with risks tilted to the downside. Shirai forecast FY15 core CPI around 0% before rising to meet the 2% target around the 2nd half of FY16.

- In Australia, after posting its first increase in 7 quarters, Q3 construction fell by the biggest margin in nearly 4 years. Engineering construction was particularly soft at -7.3% v +5.6% prior while Residential component rose +2.0% v -3.0% prior.

- In China, researcher with CASS remarked that opening of capital account should not be driven by yuan's inclusion in SDR and is not a requirements for the inclusion. China and Japan officials are also pushing for talks on maritime issues next month amid rising tensions in South China Sea.

Equities

US equities/ADRs:

- VEEV: Reports Q3 $0.12 v $0.11e, R$106.9M v $103Me; +7.1% afterhours

- GES: Reports Q3 $0.15 v $0.11e, R$521M v $522Me; +4.5% afterhours

- PBMD: Provides investor update; +3.3% afterhours

- HPQ: Reports Q4 $0.93 v $0.97e, R$25.7B v $28.4B y/y (**last time reporting as combined HPQ-HPE entity); -7.5% afterhours

Notable movers by sector:

- Consumer discretionary: Chow Tai Fook Jewellery Group 1929.HK +7.0% (H1 result); SA SA International Holdings 178.HK -3.1% (said to lower staff pay); Goodman Group GMG.AU -0.8% (affirms guidance); Surfstitch Group SRF.AU +1.4% (acquisition, reaffirms guidance)

- Consumer staples: Yashili International Holdings 1230.HK -2.0% (profit warning); Australian Agricultural Company AAC.AU +3.4% (H1 result)

- Financials: Greenland Hong Kong 337.HK +5.0% (strategic cooperation with Qihoo 360); CITIC Securities 600030.CN -1.7% (said to have inflated swap data)

- Technology: Digital China 861.HK -3.4% (Q3 result); UXC UXC.AU +4.4% (confirms acquisition)

- Materials: Samsung C&T Corp 028260.KR +0.3% (awarded order); Spark Infrastructure SKI.AU -1.0% (entitlement offer)

- Energy: Cheung Kong Infrastructure 1038.HK -0.6%, Power Assets Holdings 6.HK -3.1% (Independent holders reject Cheung Kong Infrastructure offer)