Equity indices trade generally higher after US gains
|Asia Market Update: Equity indices trade generally higher after US gains; Shanghai pares rise following extended holiday; Samsung issued prelim results; UST yields rise ahead of jobs report.
General trend
- Hang Seng and Shanghai Composite have pared gains; Property indices drop; Profit warning weighs on AAC Technologies [Apple supplier].
- CN/HK Property: Evergrande’s silence persists; Fantasia bonds halted amid price declines.
- Nikkei has extended rise; Heavyweights gain (Softbank Group and Fast Retailing); Automakers rise amid move up in USD/JPY; Topix Shipping index declines.
- S&P ASX 200 has also extended gain; Resources index supported by higher CN ore prices.
- WTI Crude FUTs extend rise.
- Taiwan Semi may release Sept/Q3 sales later today S&P ASX 200 has extended gain.
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened flat.
- (AU) Reserve Bank of Australia Financial Stability Report: Risk of excessive borrowing due to low interest rate environment; vulnerabilities in China financial system remain elevated.
- (AU) Australia sells A$1.0B v A$1.0B indicated in 4.75% Apr 2027 bonds, avg yield 0.9920%, bid to cover 5.78x.
China/Hong Kong
- Hang Seng opened +1.5%, Shanghai Composite +1.2% (CN markets were closed for holiday from Oct 1-7).
- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY0B prior; Net drain CNY330B v Net inject CNY40B prior.
- (CN) China PBOC sets Yuan reference rate: 6.4604 v 6.4854 prior.
- *(CN) CHINA SEPT FOREIGN RESERVES: $3.201T V $3.220TE [Oct 7th].
- *(CN) CHINA SEPT CAIXIN PMI SERVICES: 53.4 V 46.7 PRIOR (Moves back into expansion); PMI Composite: 51.4 v 47.2 prior.
- (CN) Follow Up: China Inner Mongolia Province: Ordered 72 Coal mines to immediately increase production; the mines will increase total annual capacity by ~100Mt.
- (CN) China to increase coal supply amid power shortage; Large Chinese coal-producing provinces have pledged to increase long-term coal supply to power plants by a combined 145Mts during Q4; the coal will be sold at discounted prices – Caixin.
- (CN) Shanghai Securities News: China property developers' sales have 'plunged' in Sept.
- (HK) Hong Kong Govt: To provide 100K private homes over next 10 years; to also provide 366K public homes.
- (CN) PBOC Vice Gov: China will improve interest rate corridor mechanism and market based interest rate formation and transmission mechanism.
Japan
- Nikkei 225 opened +1.3%.
- (JP) Japan PM Kishida Election Platform: Does not mention financial income tax.
- (JP) Japan Fin Min Suzuki: Will use FX Reserves to invest in ESG related investment products; Confirms PM Kishida has Instructed cabinet to compile economic stimulus (as expected); Will submit extra budget after election.
- (JP) Ally of Japan PM Kishida said to have called for capital gains tax increase to 25% [vs 20% currently] – Press.
- Japan PM Kishida is due to outline his policy program later today (Oct 8th).
- (JP) Japan Aug Current Account: ¥1.67T v ¥1.54Te; Adj Current Account: ¥1.04T v ¥1.43T prior; Trade Balance (BoP): -¥372.4B v +¥622.3B prior.
- (JP) Japan Aug Household Spending M/M: -3.9% v -2.0%e (4th straight decline); Y/Y: -3.0% v -1.2%e.
- (JP) Japan Aug Labor Cash Earnings Y/Y: 0.7% v 1.0% prior; Real Cash Earnings Y/Y: 0.2% v 0.7% prior.
- (JP) Japan Sept Eco Watchers Current Survey: 42.1 v 43.0e; Outlook Survey: 56.6 v 48.5e [first rise in 3 months].
Korea
- Kospi opened +0.6%.
-Samsung Electronics [005930.KR]: Reports prelim Q3 (KRW) Op 15.8T v 12.4T y/y (16.1Te), Rev 73.0T v 67.0T y/y (73.5Te).
Other Asia
- (IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 4.00%; AS EXPECTED; Not hesitant to take unconventional steps; Further government bond buying not needed.
North America
- (US) Senate votes 50-48 to increase debt ceiling until early Dec 2021; the measure will now move to the US House; White House has said that President Biden would sign the bill; The US House will convene on Oct 12th (Tues) to pass the stopgap debt measure.
- (US) Treasury Sec Yellen: Debt limit uncertainty is damaging to confidence; there is more work to do to get well past Dec 3rd on debt limit - CNN Interview.
- (US) Energy Dept spokesperson: We are not planning to tap the Strategic Petroleum Reserve or to pursue a ban on crude exports - press.
Europe
- (IE) Ireland govt reportedly plans to sign on to the OECD global corporate tax agreement - Virgin Media reporter.
Levels as of 01:20 ET
- Nikkei 225, +1.7%, ASX 200 +0.9% , Hang Seng -0.2%; Shanghai Composite +0.3% ; Kospi -0.4%.
- Equity S&P500 Futures: flat; Nasdaq100 -0.1%, Dax flat; FTSE100 -0.1%.
- EUR 1.1560-1.1547 ; JPY 111.92-111.60 ; AUD 0.7325-0.7294 ;NZD 0.6950-0.6920.
- Gold -0.1% at $1,757/oz; Crude Oil +1.4% at $79.40/brl; Copper +0.3% at $4.2610/lb.
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