Equity markets generally improve
|Asia Market Update: Equity markets generally improve; WTI Crude FUTs extend gains; UST FUTs extend losses.
General trend
- GBP rises amid BOE comments.
- USD/JPY trades at the highest level since late 2018 amid recent rise in UST yields.
- Nikkei rebounds from opening decline [Yen extends drop; Kishida played down tax concerns]; Topix Banks index supported by higher UST yields.
- Hang Seng has extended gain [TECH index rises after Meituan news; Lenovo drops on withdrawal of listing application] Property index lags, various CN/HK property developers in the headlines (Evergrande, Fantasia, Modern Land).
- Shanghai Composite has remained slightly higher.
- S&P ASX 200 has declined after opening flat [Star Entertainment weighs on Consumer Discretionary index].
- US equity FUTs decline after higher open.
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened flat.
- Star Entertainment [SGR.AU]: Issues response to media reports concerning allegations.
- (AU) Reserve Bank of Australia (RBA) Offers to buy A$1.60B in Govt bonds v A$1.60B prior.
- (NZ) New Zealand PM Ardern: Need to maintain coronavirus restrictions longer; Auckland to remain in Lv 3 lockdown, to review in 1 week.
China/Hong Kong
- Hang Seng opened +1.3%, Shanghai Composite +0.2%.
- (CN) China State Council said to call to that energy supply be ensured; To allow power generators to increase industrial tariff by 20% - financial press.
- Evergrande [3333.HK]: Reportedly Evergrande's offshore creditors' advisers prepare backup contingency plan – press [Oct 8th].
- (CN) China Vice Premier Liu He: China is negotiating cancellation of tariffs and sanctions; Exchanged views with USTR on the trade agreement - comments after Friday teleconference.
- (CN) China City Harbin (NE China) said to be offering home buyers a subsidy of up to CNY100K for a purchase - China Daily.
- (CN) China Sec Journal: PBOC may roll over MLF with a larger amount in Oct to maintain reasonable growth of credit and money supply [Note: PBOC normally conducts MLF operations around the 15th of the month].
- (CN) Funds raised by property trust firms in China declined by >40% m/m in Sept [amid issues related to Evergrande] – Shanghai Securities News.
- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B prior; Net drain CNY190B v Net drain CNY320B prior [Oct 11th].
- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B prior; Net drain CNY320B v Net drain CNY330B prior [Oct 9th].
- (CN) China PBOC sets Yuan reference rate: 6.4479 v 6.4604 prior.
- Lenovo [992.HK]: Withdraws application to list on Shanghai STAR board.
- Meituan [3690.HK]: China's market regulator fines Meituan CNY3.4B for conducting monopolistic behaviour - press.
Japan
- Nikkei 225 opened -0.3%.
- (JP) Japan Chief Cabinet Sec Matsuno: Will strengthen tax system towards raising wages first.
Korea
- Kospi is closed for holiday.
Other Asia
- (SG) Singapore PM: Will allow vaccinated travelers from more countries, including UK and US, to enter without quarantining.
North America
- (US) Treasury Sec Yellen: confident that Congress will be able to raise debt ceiling on Dec 3rd.
- (US) Senate minority leader McConnell sends letter to Pres Biden saying he will not provide assistance again to Democrats in raising the US debt limit.
- (US) Goldman Sachs analysts cut US 2021 GDP growth forecast from 5.7% to 5.6%; Cuts US 2022 GDP growth forecast from 4.4% to 4.0%.
- (US) Fed's Daly (non-voter, dove): labor market is going to have ups and downs, especially with the Delta variant; It is too soon to say that it is stalling.
Europe
- (UK) BOE Gov Bailey: Inflation will be higher than our forecast; Concerned with inflation being above target - press interview.
- (UK) BOE's Saunders (QE dissenter): households should get ready for “significantly earlier” interest rates rise due to increasing inflation pressure - UK press interview.
- (UK) UK Manufacturers of steel, glass, ceramics and paper, have warned the govt that unless something is done about rising wholesale gas prices they could shut down production.
- (UK) Brexit Min Frost expected to tell EU Tuesday that "significant change" to the Northern Ireland protocol is vital for the restoration of genuinely good relations between EU and UK – press.
- (UK) China Customs: bans imports of UK cattle beef that is under 30 months in age due to mad cow disease case found in beef.
- (AT) Austria Chancellor Kurz steps down after pressure from his coalition partner, the Greens; proposes Foreign Min Alexander Schallenberg as next PM, will remain as party leader.
Levels as of 01:20 ET
- Nikkei 225, +1.5%, ASX 200 -0.3% , Hang Seng +2.2%; Shanghai Composite +0.5% ; Kospi closed.
- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.2%, Dax +0.1%; FTSE100 flat.
- EUR 1.1579-1.1563 ; JPY 112.72-112.15 ; AUD 0.7332-0.7291 ;NZD 0.6947-0.6916.
- Gold flat at $1,757/oz; Crude Oil +2% at $80.94/brl; Copper +0.2% at $4.2900/lb.
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