Dovish Fed minutes extend the risk-on rally in Asia

Economic Data

- (AU) AUSTRALIA AUG HOME LOANS M/M: 2.9% V 4.7%E

- (NZ) NEW ZEALAND SEPT RETAIL CREDIT CARD SPENDING M/M: 0.9% V 0.4%E; TOTAL M/M: 0.7% V 0.1% PRIOR

Index Snapshot (as of 02:30 GMT)

- Nikkei225 +0.8%, S&P/ASX +1.0%, Kospi closed, Shanghai Composite +0.1%, Hang Seng +1.6%, Dec S&P500 -0.1% at 2,004

Commodities/Fixed Income

- Dec gold flat at $1,144/oz, Nov crude oil +0.6% at $49.71/brl, Dec copper +1.3% at $2.37/lb

- USD/CNY: (CN) PBoC sets yuan mid point at 6.3493 v 6.3505 prior setting; strongest Yuan setting since Aug 12th

- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥400B in 3-5yr JGBs, ¥240B in 10-25yr JGBs, ¥140B in JGBs with maturity over 25-yrs, as well as ¥1.5T in T-bills

- (AU) Australia MoF (AOFM) sells A$800M in 3.25% 2018 Bonds; avg yield: 1.884%; bid-to-cover: 3.94x

Market Focal Points/FX

- US equities rallied into the close as S&P500 sliced through and closed above the psychological 2,000 level resistance for the first time in nearly 2 months after the minutes from the September Fed meeting proved to be less hawkish than anticipated. Despite the close call going into that hold among investors, the actual text of the minutes suggested there wasn't nearly as much disagreement among FOMC members. In fact, a significant number of Fed officials expressed concern over the state of inflation, even though much of the Fed-speak going into that decision suggested the widely held view regarding low price pressures is that it would be "transitory." Materials, metals, and energy are helping S&P/ASX outperform, with the rally also reflected in commodities futures - crude oil remains on the cusp of $50/brl and Dec copper gained another 2% in electronic trade toward $2.40/lb. In FX, AUD/USD was most volatile, rising 30pips to $0.7280, USD/JPY traded in a 20pip range below ¥120, while EUR/USD tracked in a 30pip range below $1.13.

- Alcoa kicked off the official start of the US earnings season with disappointing results. Much like the case with Yum Brands earlier this week, slowdown in China was cited as the culprit, as the aluminum giant noted it lowered its estimate for 2015 automotive production growth to +1-2% from +5-8%. China markets were less volatile going into next week's bulk release of September economic data and Q3 GDP. Economist with UBS said Q3 will likely show overall improvement, but GDP will slow to 6.6% from 7.0% in Q2. PBoC chief economist offered thoughts about the high-profile TPP deal from which China has been excluded, noting the mainland stands to lose 2.2pts in GDP by not joining the partnership.

- In Japan, BOJ Gov Kuroda defended unchanged policy at this week's meeting, expressing optimism economy will sustain moderate recovery. Separately, Fin Min Aso participated in tri-party talks with China and South Korea, discussing enhanced financial cooperation with his China counterpart Fin Min Lou.

Equities

US equities/ADRs:

- HELE: Reports Q2 $1.12 v $0.90e, R$369M v $345Me; +8.2% afterhours

- ANGO: Reports Q1 $0.11 v $0.11e, R$83.7M v $84.7Me; -4.3% afterhours

- AA: Reports Q3 $0.07 v $0.14e, R$5.57B v $5.67Be; -5.1% afterhours

- GPS: Reports Sept SSS -1% v -1.3%e; Guides Q3 gross margin flat q/q; -5.9% afterhours

- RT: Reports Q1 -$0.03 v +$0.01 y/y, R$279M v $281M y/y; -7.9% afterhours

- SMCI: Reports prelim Q1 $0.44-0.45 v $0.54e, R$529-530M v $542Me (prior $0.49-0.59, R$520-580M); -16.7% afterhours

- LDRH: Reports preliminary Q3 R$39.3M v $40Me; reaffirms FY15 rev outlook; -19.0% afterhours

Notable movers by sector:

- Consumer discretionary: Chow Tai Fook Jewellery Group 1929.HK +2.5% (Q2 result); Intime Department Store Group Co 1833.HK +2.1% (9-mo result); Fast Retailing Co 9983.JP -9.2% (FY14/15 result); McDonald's Holdings Co Japan 2702.JP -1.4% (Sept result)

- Financials: Evergrande Real Estate Group 3333.HK +1.3% (Sept result); China Vanke 000002.CN +0.2% (Sept result); Guangzhou R&F Properties 2777.HK +2.4% (Sept result); Seven & I Holdings 3382.JP +1.0% (H1 result)

- Industrials: Great Wall Motor 601633.CN -1.7% (Sept result); China Merchants Energy Shipping Co 601872.CN +2.7% (profit guidance); Jiangling Motors Corp 000550.CN -3.5% (Sept result); Mitsui Osk Lines 9104.JP +1.9% (H1 result speculation); Anhui Jianghuai Automobile Co 600418.CN +3.2% (Sept result)

- Technology: Universal Scientific Industrial Shanghai Co 601231.CN +10.0% (Sept result); Acer Inc 2353.TW -0.7% (Sept result); Taiwan Semiconductor Manufacturing 2330.TW +0.7% (Sept result); Advanced Semiconductor Engineering 2311.TW -1.7% (Sept result); Sony Corp 6758.JP +0.3% (acquisition)

- Materials: Sinopec Yizheng Chemical Fibre Co 600871.CN -4.2% (profit warning) Glencore Xstrata 805.HK +0.4% (cuts zinc production capacity); Evolution Mining EVN.AU +3.2% (Q1 result)

- Energy: Beach Energy BPT.AU +13.2%, Santos STO.AU +5.3% (crude oil rises)

- Healthcare: Shandong Wohua Pharmaceutical Co 002107.CN +10.0% (9-mo result)