Asia trades generally flat, Shanghai rises following 8-day break

Asia Market Update: Asia trades generally flat, Shanghai rises following 8-day break; CNH supported by stronger than expected yuan fix; US equity FUTs extend gains.

General Trend

- Shanghai Composite rose by 1.9% during the morning session; Gainers included IT, Industrial, Financial and Consumer Staples firms

- HK gaming firms extend declines, Tech sector trades mixed

- Japan financial-related indices trade generally lower on the Topix, Marine Transportation and Retail indices rise

- Seven & I rises over 5% in Japan after raising its FY outlook

- Energy and Resource firms rise in Australia, Consumer Discretionary index lags

- Cimic (Aussie construction firm) rises over 6%, issued 9-month results and outlook comments

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.1%

- (AU) RBA Financial Stability Review: Business failures will increase substantially as deferral periods come to an end; Commercial real estate poses significant risks for lenders and leveraged investors

- (AU) Australia Aug Home Loans Value M/M: 12.6% v 1.9%e; Investment lending M/M 9.3% v 3.5% prior

- (AU) Australia sells A$1.5B v A$1.5B indicated in 0.25% Nov 2025 bonds, avg yield 0.3143% , bid to cover 6.2x

- (AU) Australia Port Hedland Aug Iron Ore Exports 46.1Mt v 43.6Mt m/m

- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$260M v NZ$410M prior in government bonds as part of QE v NZ$260M sought

- (NZ) Reserve Bank of New Zealand (RBNZ): Will seek to purchase NZ$960M v NZ$1.05B prior in government bonds next week

- (NZ) New Zealand Sept ANZ Heavy Truckometer M/M: +4.1% v -5.6% prior

China/Hong Kong

- Hang Seng opened +0.6%, Shanghai Composite +1.4%

- (CN) China PBOC sets Yuan reference rate: 6.7796 v 6.8101 prior

- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos

- *(CN) CHINA SEPT CAIXIN PMI SERVICES: 54.8 V 54.3E (5th straight expansion)

- -(CN) China Golden Week holiday consumer spending (Oct 1-7th) Y/Y: +6.3% - financial press

- (CN) China Golden Week Air passenger volumes 91% of y/y volume

- (CN) Pres Trump: I plan to use tariffs on China in a second term - Fox Business interview

- (CN) China Foreign Ministry: China to join World Health Organization (WHO) COVAX program; Will prioritize vaccine supply to developing countries when the vaccines are ready

Japan

- Nikkei 225 opened +0.3%

- (JP) Nikkei 225 Oct options said to settle at ~23,724

- (JP) Japan Fin Min Aso: Cash handouts proposal for students needs scrutiny; Spending on Dining out and hotels has stalled; Other areas of consumption are growing

- (JP) Japan Chief Cabinet Sec Kato: Reiterates Japan will not hesitate to take economic measures if needed; Japan has no specific plans to issue central bank digital currency (CBDC) at current time, topic needs to be considered

- (JP) Japan Aug Household Spending Y/Y: -6.9% v -6.7%e

- (JP) Japan Aug Labor Cash Earnings Y/Y: -1.3% v -1.2%e; Real Cash Earnings Y/Y: -1.4% v -1.4%e (6th consecutive decline)

Korea

- Closed for holiday

- (KR) South Korea confirms 54 additional coronavirus cases v 69 prior; 1 additional death

Other Asia

- (IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 4.00%; AS EXPECTED; Special OMOs to be increased to INR200B; Will conduct TAP TLTRO totaling INR1.0T

North America

- (US) President Trump: Really good chance of reaching Covid Aid, talks have reopened

- (US) President Trump: May do public events sooner than Sat, will do another coronavirus test on Friday; To try to conduct rally on Sat night, probably in Florida - Fox News Interview

- (US) White House Doctor: Trump has completed his course of therapy for coronavirus ; Trump's physical exam has remained stable since returning to White House; Trump should be able to hold public events by Sat

- (US) Fed's Kaplan (FOMC dissenter): Does not see the Fed needing to buy more bonds now; There is plenty of clarity on path of rates for the next 2.5-3 years.

- (US) Small Business Association and US Treasury announce simpler PPP forgiveness steps for loans that total <$50K (in line)

- Xilinx [XLNX]: Speculated that co. is in advanced talks to be acquired by AMD, the deal could be worth over $30.0B [vs Xilinix's closing market cap of ~$25.9B] - US financial press

- Regeneron [REGN]: President Trump and Chief of Staff Meadows said to urge FDA to hasten its review of Regeneron antibody drug - Washington Post

Europe

- (UK) Chancellor of the Exchequer Sunak (Fin Min) said to plan a carbon emissions tax aimed at boosting UK Economy – Press

- (UK) Chancellor of the Exchequer Sunak (Fin Min) reportedly expected to announce a local furlough plan - UK's Times

- (SA) Reportedly Saudi Arabia considering reversing course over planned OPEC output raise - press

Levels as of 1:20 ET

- Nikkei 225, -0.4%, ASX 200 flat , Hang Seng -0.2%; Shanghai Composite +1.6% ; Kospi closed

- Equity S&P500 Futures: +0.4%; Nasdaq100 +0.4%, Dax -0.6%; FTSE100 +0.1%

- EUR 1.1780-1.1754 ; JPY 106.04-105.81 ; AUD 0.7188-0.7159 ;NZD 0.6613-0.6573

- Gold +1.1% at $1,915/oz; Crude Oil -0.4% at $41.04/brl; Copper +0.9% at $3.0703/lb