Asian Market Update: Japan, China leaders seeking to diffuse island tensions; South Korea postpones fiscal surplus target year
- (CN) CHINA AUG CONFERENCE BOARD LEADING ECONOMIC INDEX M/M: 1.7% V 0.6% PRIOR; largest increase in 7 months
- (JP) JAPAN AUG CORPORATE SERVICE PRICE INDEX M/M: -0.3% V -0.3%E; third consecutive decline
- (KS) SOUTH KOREA SEPT SK CONSUMER CONFIDENCE: 99 V 99 PRIOR
- (PH) PHILIPPINES JUL TRADE BALANCE: -$236M V -$775M PRIOR; TOTAL IMPORTS Y/Y: -0.8% V +13.0% PRIOR; TOTAL MONTHLY IMPORTS: $5.0B V $5.1B PRIOR
Markets Snapshot (as of 04:00GMT)
- Nikkei225 +0.1%
- S&P/ASX -0.3%
- Kospi -0.5%
- Shanghai Composite -0.3%
- Hang Seng -0.1%
- Dec S&P500 +0.3% at 1,455
- Dec gold +0.1% at $1,767/oz
- Nov Crude oil +0.3% at $92.24/brl
- Asian equity markets opened slightly weaker, taking cue from US indices, before paring their losses later in the day. Geopolitical tensions pertaining to disputed Senkaku islands is still weighing on sentiment, as Taiwan entered the fray with nearly 50 fishing vessels entering disputed waters only to be hosed by the Japan Coast Guard. Regional leaders will attempt to rebuild diplomatic relations as govt officials from Japan and China are set to meet later today to discuss the dispute, while PM Noda travels to New York for a summit at the UN and is also expected to address border tensions.
- Currency markets saw some brief USD weakness, with EUR/USD retracing the post-IFO decline above $1.2950 and AUD/USD rising above 25pips from the lows to $1.0440. The analyst community is increasingly skeptical of greenback weakness persisting however, particularly focusing on the overvalued AUD and expectations of renewed easing by the RBA at its upcoming meetings. USD/JPY continued to pare post BOJ-gains, extending decline below the ¥78 handle.
- GLD: SPDR Gold Trust ETF daily holdings rise by 9.0 tons to 1,326.8 tons (record high)
- SLV: iShares Silver Trust ETF daily holdings rise to 10,015 tons from 9,940 tons (highest since 10,047 in Sept of 2011)
- US corn crop across 18 select states: 24% good/excellent v 24% last week
- (VN) Vietnam Steel Assoc sees rise in Q4 steel sales at 400-420k/month from 350k prior quarter - Vietnamese press
Speakers/Political/In the Papers
- (AU) Reserve Bank of Australia semi-annual Financial Stability Review: Australia's banks able cope with any shocks from abroad; cautioned them against taking inappropriate risks in order to achieve unrealistic profit goals; Warned that the Europe's debt crisis remained a threat to the stability of the global financial system.
- (KR) S&P has lowered South Korea 2012 GDP target to 2.5% from 3.0% prior.
- (KR) South Korea releases Budget Plan: Sets FY13 spending plan to KRW342.5T v KRW325.4T prior year; Postpones achieving fiscal surplus from 2013 to 2014
- (JP) Dep PM Okada said to be considered for Fin Min; Japan DPJ (ruling) Secy Gen Koshiishi stated that PM Noda expected to announce cabinet reshuffle on Monday, 1st Oct; Fin Min Azumi to be appointed as DPJ acting secy general.
- (JP) Japan Coast Guard said to have observed 40-50 Taiwan vessels near the disputed islands - financial press
- (JP) Next round of nuclear restart in Japan not likely to occur before next summer - Yomiuri press
- (EU) ECB and the German Bundesbank are seeking lawyers to check the legality of ECB's new bond buying program - Bild press.
- (EU) ING analyst: Germany's IFO data suggests German companies are skeptical about the impact of the new ECB policy stance - financial press
- (CN) China Sept CPI may rise to 2.2% - China Securities Journal
- (CN) NDRC considering support for the solar industry - Chinese press
- (CN) China Ministry of Transport: Cargo flows through Chinese ports in Aug rose just 2% y/y, the slowest rise this year - China Daily
- TM: To cut production of Lexus vehicles at Fukuoka plant due to ongoing anti-Japan protests in China - Japan press
- Sharp Corp 6753.JP: Guides FY13/14 consolidated net lower to ¥14.6B from ¥30.0B prior; presents restructuring plan - Kyodo press.
- IHI Corp 7013.JP: In discussions with GE on engine development; no decision has been made yet. Earlier during the session the press reported that IHI was to cooperate with GE for the production of aircraft engines.
- Olympus 7733.JP: Follow-up: Sony to allow ¥50B investment in Olympus.
- Newcrest Mining Ltd NCM.AU: To issue $1B in corporate Bonds (approx 4.5% of market cap) - financial press
- Hon Hai 2317.TW: Resumes production at China city of Taiyuan facility following mass violence over the weekend - financial press
- PAYX: Reports Q1 $0.42 v $0.41e, R$578.2M v $584Me; +1.0% afterhours
- RHT: Reports Q2 $0.28 v $0.29e, R$323M v $322Me; Guides Q3 $0.28-0.29 v $0.30e, R$336-339M v $340Me; Lowers FY13 $1.15-1.17 v 1.19e, Narrows Rev lower $1.32-1.33B v $1.33Be (guided Rev $1.32-1.34B on 6/20; EPS $1.16-1.20 on 3/28); -2.9% afterhours
- CAT Lowers 2015 EPS forecast to $12-18/shr vs $15-20/shr prior forecast; Rev $80-100B - analyst day; -2.2% afterhours
- KEG: Lowers Q3 consolidated rev guidance to decline 4-5% q/q (vs prior 4% increase; implies $485-490M v $533Me); completes sales of Argentina operations
- ADT and PNR to be added to S&P500; Replacing LXK and DV