China data weaker than expected
|Asia Mid-Session Market Update: China data weaker than expected; Aussie employment much stronger than expected; China calls out Trump for protectionism
Asia Summary
- Asian equity markets opened slightly lower, before swinging into muted gains, then back again. The onshore yuan fell for a 5th consecutive day, while the PBOC weakened the yuan daily reference rate for the 3rd consecutive day. China again used 7, 14 and 28 day reverse repos with a CNY100B injection. China MOFCOM expressed its displeasure with President Trump for blocking deal between Lattice Semi and Canyon Bridge Capital.
- There was a deluge of data out of China, with fixed assets ex rural and industrial production coming in lower than expected. After the data National Bureau of Stats spokesperson said yuan appreciation shows steady China economy and China will help companies enhance ability to weather FX fluctuations. NBS also indicated that the base effect has inflated PPI. Analysts picked up on this and warned that this when washed through will be disappointing and possibly dampen global growth outlook. Australia again reported a significant jump in employment change, +54.2K, much higher than the 20K expected, both part time and full time employment saw growth. The A$ jumped about 40 pips on the news, before slightly falling on the weaker China data.
Key economic data
- (AU) AUSTRALIA AUG EMPLOYMENT CHANGE: 54.2KE V 20.0KE; UNEMPLOYMENT RATE: 5.6% V 5.6%E
- (CN) CHINA AUG RETAIL SALES Y/Y: 10.1% V 10.5%E; YTD Y/Y: 10.4% V 10.4%E
- (CN) CHINA AUG FIXED ASSETS EX RURAL YTD Y/Y: 7.8% V 8.3% PRIOR
- (CN) CHINA AUG INDUSTRIAL PRODUCTION Y/Y: 6.0% V 6.6%E; YTD Y/Y: 6.7% V 6.8%E
- (CN) CHINA AUG YTD FOREIGN DIRECT INVESTMENT (FDI) YUAN-DENOMINATED TERMS Y/Y: -0.2% V -1.2% PRIOR
- (AU) Australia Sept Consumer Inflation Expectation Survey: 3.8% v 4.2% prior
- (NZ) New Zealand Sept ANZ Consumer Confidence Index: 129.9 v 126.2 prior; M/M: 2.9% v 0.6% prior
Speakers and Press
China/Hong Kong
- (CN) China National Stats Bureau (NBS): Yuan appreciation shows steady China economy; Will help companies enhance ability to weather FX fluctuations; base effect has inflated PPI
- (CN) China MOFCOM: Very concerned by Trump's blocking of China deal; security checks shouldn't be used as a protectionism tool
Korea
- (KR) South Korea said to be considering aid to North Korea through international organization - Korean press
- (KR) S&P affirms not considering South Korea sovereign rating downgrade due to N. Korea; sees a low risk of war
- (KR) China may have halted North Korea textile trading before the recently announced UN sanctions – Japanese Press
Australia/New Zealand
- (NZ) New Zealand Labour Party (opposition): Will not introduce new taxes before 2021; alters tax working group plans before Sept 23rd elections
- (AU) Australia Port of Newcastle Aug Coal Exports 12.5Mt, -11.9% m/m
Other
- (US) President Trump: "China has a business tax rate of 15%. We should do everything possible to match them in order to win with our economy. Jobs and wages!" - tweet
Asian Equity Indices/Futures (00:00ET)
- Nikkei -0.3%, Hang Seng -0.5%; Shanghai Composite -0.2%, ASX200 -0.2%, Kospi +0.2%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.1%, FTSE100 -0.1%
FX ranges/Commodities/Fixed Income (00:00ET)
- EUR 1.1894-1.1871; JPY 110.73-110.41; AUD 0.8016-0.7973; NZD 0.7263-0.7239
- Dec Gold -0.1% at $1,326/oz; Oct Crude Oil -0.1% at $49.23/brl; Sept Copper -0.1% at $2.98/lb
- (US) DOE CRUDE: +5.9M V +3.5ME; GASOLINE: -8.4M V -3ME; DISTILLATE: -3.2M V -1.5ME (biggest gasoline inventory drop since at least 1990)
- (CN) China Govt preparing to sell $2B in bonds this month - financial press citing sources in Hong Kong
- USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT: 6.5465 V 6.5382 PRIOR (3rd consecutive weaker setting)
- (CN) PBOC injects combined CNY100B in 7,14 and 28-day reverse repos v injects CNY70B prior
- (NZ) New Zealand sells NZ$100M v NZ$100M indicated in 2.5% 2040 I/L Bonds; avg yield 2.3569%
- (JP) Japan MoF sells ¥3.65T in 3-month bills; avg yield -0.1394%
- (JP) Japan MoF sells ¥803.9B v ¥1.0T indicated in 0.6% 20-yr JGBS; avg yield 0.5600%; bid-to-cover 4.15x
Equities notable movers
Australia/New Zealand
- MQA.AU To exercise a pre-emptive right to acquire an additional 4.86% indirect interest in APRR for €440M, launches A$450M capital raising
- MYR.AU Reports FY17 (A$) adj Net 67.9M v 69.4M y/y; EBITDA 198.1m v 204.2M y/y; Rev 3.20B v 3.25B y/y; +2.4%
Hong Kong/China
- 700.HK Exec: Have made creators of WeChat groups responsible for managing information within their forums and the behaviour of members; new regulations pose challenge for firm to hook users ; +1.1%
- 1398.HK China Official: hopes Spain handles proceedings against ICBC Europe in money-laundering case in a fair way; -1%
Japan
- 3105.JP, BLDP Collaborated with Nisshinbo Holdings to offer PEM Fuel Cell product using non-precious metal catalyst; +25%
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