Dollar weakness resumes after Fed minutes

Asia Mid-Session Update: Dollar weakness resumes after Fed minutes; China tech names to come under govt influence?

Asia Summary

- Asian equity markets opened mostly higher. China markets remains muted ahead of next week’s Communist Party congress, while as expected Nikkei closed at a 20-yr high yesterday. While currencies were muted early in the session, dollar weakness resumed heading into afternoon trade, with US Fed minutes showed there is still uncertainty on timing of rate increases. South Korea’s Q3 FDI fell 9.7%, notably YTD China investment into South Korea fell 63% y/y to $608M amid rising tension between the two countries.

- China Govt said to be pushing some of the large tech firms to give the Govt a stake in the company and a direct role in corporate decisions. Internet regulators have discussed taking 1% stakes in Tencent, Weibo, Youku Tudou and Alibaba.

- Looking ahead to tomorrow we will see Singapore Central Bank (MAS) announces any changes to policy. MAS is widely seen sticking to a neutral stance tomorrow, but it may be moving closer to tightening policy as the economy continues to strengthen. China will also report Sept trade data.

 

Key economic data

- (AU) AUSTRALIA AUG HOME LOANS M/M: 1.0% V 0.5%E; INVESTMENT LENDING: +4.3% V -3.9% PRIOR

- (JP) JAPAN SEPT PPI (CGPI) M/M: 0.2% V 0.2%E; Y/Y: 3.0% V 3.0%E

- (AU) Australia Oct Consumer Inflation Expectation: 4.3% v 3.8% prior

- (NZ) New Zealand Oct ANZ Consumer Confidence Index: 126.3 v 129.9 prior; m/m: -2.8% v 2.9% prior

- (KR) South Korea Q3 Foreign Direct Investment (FDI) y/y: -9.7% v -9.0% prior

- (JP) Japan Sept Tokyo Avg Office Vacancies m/m: 3.2% v 3.4% prior (lowest level since Apr 2008)

 

Speakers and Press

Japan

- (JP) Nikkei poll shows Japan's ruling coalition winning close to 300 of the 465 seats in the Diet's lower house ahead of Oct 22nd election

US

- (US) Fed’s Bostic (non-voter, dove): Balance sheet size once normalized is an open question; balance sheet rolloff start not seen significant timing - speaking in Hong Kong

- (US) US President Trump: Looking at ~10% repatriation tax rate (from current 35%)

Australia/New Zealand

- (NZ) New Zealand First Party Leader Peters: NZ First board not likely to meet Friday

- (AU) IMF lowers Australia 2017 GDP outlook to 2.2% from 3.1% in Apr

 

Asian Equity Indices/Futures (00:00ET)

- Nikkei +0.5%, Hang Seng +0.3%; Shanghai Composite -0.2%; ASX200 +0.2%, Kospi +0.3%

- Equity Futures: S&P500 -0.1%; Nasdaq100 +0.0%, Dax +0.0%; FTSE100 +0.0%

 

FX ranges/Commodities/Fixed Income (00:00ET)

- EUR 1.1878-1.1858; JPY 112.52-112.32; AUD 0.7824-0.7788;NZD 0.7110-0.7087

- Dec Gold +0.7% at $1,297/oz; Nov Crude Oil -0.5% at $51.03/brl; Dec Copper -0.1% at $3.09/lb

- (CN) China PBOC injects CNY20B v CNY20B in 7-day reverse repos prior; drains net CNY40B v none prior

- USD/CNY (CN) China PBOC sets yuan reference rate at 6.5808 v 6.5841 prior

- (TH) Thailand Central Bank sells THB20B in 14-day bonds; avg yield 1.12188%; bid-to-cover 2.38x

 

Equities notable movers

Australia/New Zealand

- BAL.AU Raises FY18 Rev target 15-20% y/y (prior 5-10%); EBITDA margin 17-20% (prior 15-20%); +6%

- LOV.AU To open pilot store in US – press; +8%

Japan

- 8028.JP Reports H1 Net ¥22.4B v ¥11.9B y/y; Op ¥33.5B v ¥20.1B y/y; Rev ¥633.6B v ¥211.5B y/y; -4%

- 5406.JP CEO apologizes for false data, have finished probes for ~100 of 200 companies; more 'irregularities' may come to light; Thus far no customers have cancelled orders; +1.1%

Korea

- 047810.KR Former and current executives were indicted by South Korean prosecutors over charges of inflating KRW535.8B in sales and KRW46.5B in net profit from 2013 to Q1 2017; halted

China/Hong Kong

- 2382.HK Reports Sept shipments of handset lens: +0.9% m/m; production -9.1% m/m; -4%