China Manufacturing PMI meets consensus

Asian Market Update: China Manufacturing PMI meets consensus; AUD, JPY hit new multi-month lows; CDC announces US case of Ebola

Economic Data

- (CN) CHINA OFFICIAL SEPT MANUFACTURING PMI: 51.1 V 51.0E

- (AU) AUSTRALIA AUG RETAIL SALES M/M: 0.1% (3-month low) V 0.4%E

- (AU) AUSTRALIA SEPT RPDATA/RISMARK HOUSE PRICE INDEX: 0.1% (4th consecutive increase) V 1.1% PRIOR

- (JP) JAPAN Q3 TANKAN MANUFACTURING INDEX:13 V 10E; LARGE ALL INDUSTRIAL CAPEX Y/Y: 8.6% V 7.0%E; LARGE MANUFACTURING OUTLOOK: 13 V 13E

- (JP) JAPAN SEPT FINAL MARKIT/JMMA MANUFACTURING PMI: 51.7 (4th straight month of expansion) V 51.7 PRELIM

- (KR) SOUTH KOREA SEPT TRADE BALANCE: $3.4B V $3.8BE

- (KR) SOUTH KOREA SEPT HSBC MANUFACTURING PMI: 48.8 (3-month low) V 50.3 PRIOR

- (KR) SOUTH KOREA SEPT CPI M/M: -0.1% V +0.2%E; Y/Y: 1.1% (7-month low) V 1.5%E; CORE CPI Y/Y: 1.9% (6-month low) V 2.1%E

Index Snapshot (as of 02:30 GMT)

- Nikkei225 +0.3%, S&P/ASX +0.1%, Kospi -0.6%, Shanghai Composite closed, Hang Seng closed, Dec S&P500 -0.2% at 1,962

Commodities/Fixed Income/Currencies

- Dec gold -0.5% at $1,206/oz, Nov crude oil +0.3% at $91.43/brl, Dec copper -0.1% at $3.00/lb

- (US) API PETROLEUM INVENTORIES: CRUDE: -0.46M v +0.9Me, GASOLINE: -2.5M v -0.8Me, DISTILLATE: -1.8M v -0.2Me

- GLD: SPDR Gold Trust ETF daily holdings fall 2.4 tonnes to 769.9 tonnes; Lowest level since Dec 2008

- (JP) BOJ offers to buy ¥100B in JGB with maturity of 1-year and under, ¥300B in 1-3yr JGB, ¥200B in 3-5yr JGB

- (AU) Australia MoF (AOFM) sells A$700M in 2023 Bonds; Avg yield: 3.3933%; Bid-to-cover: 3.62x

Market Focal Points/Key Themes

- China official manufacturing PMI figure released despite the market holidays in Shanghai was a decimal above consensus, however state economists noted sentiment remains weak as decline in new orders reflects business destocking. New export orders rose slightly to 50.2, employment component remained unchanged, and input prices fell 1.9pts to 47.4, boding poorly for September inflation data. Separately, China Real Estate Index System saw home prices in the largest cities fall 0.9% - a 5th consecutive decline and the biggest drop since 2010.

- Bank of Japan's Q3 Tankan Survey topped consensus for manufacturing components but missed widely in services. Non-Manufacturing Index came in at a 5-quarter low of 13, well below 17 estimate. Tankan silver lining was in industrial capex, with 8.6% increase registering the biggest increase since late 2007. Recall the most recent wage inflation data saw base earnings post the highest increase in 9 years.

- AUD/USD hit 8-month lows and traded within 10pips of 4-year lows of $0.8660 after slower than expected retail sales figures from Australia. 0.1% m/m increase was below 0.4% and marked a 3-month low. RPData house price index was also up 0.1%, but slowed from 1.1% prior. RPData head of reseach said the figures would likely to be seen as a positive indicator by the Reserve Bank, which has alluded to taking macroprudential measures to deal with property sector inflation.

- Economic data out of South Korea was mixed - HSBC manufacturing PMI fell into contraction with a 3-month low print of 48.8. Trade surplus was below expectations, but exports growth was the highst in 9 months and imports growth the highest since early 2012.

- US Center for Disease Control confirmed a single case of Ebola diagnosis in Texas. CDC director said the patient arrived from West Africa on 20th of Sept and checked into a hospital when symptoms occured on the 26th. Shares of Ebola related companies (TKMR, BCRX, SRPT) were sharply higher afterhours, while airlines traded lower.

Equities

US markets:

- TKMR: CDC confirms first case of Ebola diagnosed in the US - financial press; +30.8% afterhours

- ANGI: Said to have hired bankers, may mull possible sale - FT; +19.5% afterhours

- SYNC: Raises FY14 EBITDA to -$1M to breakeven (prior -$2.5M to -$1M), Reaffirms Rev $100-103M v $100Me; +7.3% afterhours

- ASEI: Expects a net loss in Q2 and plans to reduce workforce by 10%; -6.3% afterhours

- WPRT: Lowers FY14 Rev guidance to $130-140M v $179Me (prior $175-185M); -17.0% afterhours

Notable movers by sector:

- Industrials: ANA Holdings Inc 9202.JP +0.5% (partnership with Philippine Airlines)

-Technology: Hon Hai Precision Industries 2317.TW +1.5% (speculation to increase workforce for iPhone6); Softbank Corp 9984.JP +0.5% (exclusive sales rights of Sony's smartwatch)

- Materials: PanAust PNA.AU -3.9% (halts Phu Kham copper-gold ops); Sedgman SDM.AU +2.5% (contract)

- Energy: Lonestar Resources LNR.AU +2.5% (positive shale results)