Asia market update: Asian equities down in limited market moves amid JP holiday and ahead of CB decisions; Evergrande drops ~20% then recovers; AU RBA Minutes tomorrow.

General trend

- Stocks were generally weaker across Asia today after Friday’s strong rises.

- 3rd straight drop in China FDI figures, accelerating with the August data.

- Evergrande dropped ~20% in early trading as police in Southern China said to have detained certain wealth management employees [unclear if the move relates to a new investigation]. However, prices came back by lunch to be up on the day by ~+3%.

- A reminder that Country Garden has more Yuan bond extension votes that have been delayed until today.

- The Hang Seng Mainland Properties Index down approx. -1.5% at lunch.

- The risk-off mood was widespread across Asia with all indexes down. Australia’s ASX was pulled down by financials, energy and IT as investors wait for the RBA Minutes tomorrow to assess the interest rate outlook. AU 10-yr bond yields up over 12bps to 4.2160%.

- After hours Friday Taiwan Semiconductor told major suppliers to delay delivery of high-end chip-making equipment as they are nervous about weak customer demand. Stock is down nearly 3% today.

- Today Michelle Bullock officially began her first day as the new Governor of the Australian RBA, taking over from Gov Philip Lowe.

- Asian company comments on impact of continuing US automakers' strike [Sona BLW Precision Forgings – see below].

- US equity FUTs slightly up in the Asian session.

Looking ahead (Asian time zone)

- Tue 19 Sep AU RBA Meeting Minutes.

- Wed 20 Sep JP Balance of Trade, CN LPR, & UK CPI.

- Wed night US FOMC Rate Decision.

- Thu NZ Q2 GDP.

- Thu evening UK BoE Rate Decision.

- Fri JP CPI (national) and JP BOJ Rate Decision.

Holidays in Asia this week

- Mon 18 Sept Japan.

- Tue 19 Sept India.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 7,271.

- Chevron (CVX) Australia's Offshore Alliance Union: Workers begin 24-hour strike at Chevron's Australian LNG facilities; Flags industrial action until mid-October.

- New Zealand Aug Performance Service Index (PSI): 47.1 v 48.0 prior.

- New Zealand Aug Non-Resident Bond Holdings: 62.4% v 62.2% prior.

- NZIER economists see 2023-24 GDP expanding +0.4% (+0.6% prior); CPI inflation at 4.3% in Q1 2024 (3.9% prior).

China/Hong Kong

- Hang Seng opens -0.6% at 18,069.

- Shanghai Composite opens -0.2% at 3,110.

- Evergrande (3333.HK) Stock drops ~20% as police in Southern China said to have detained certain wealth management employees [unclear if the move relates to a new investigation] - financial press [update].

- China Foreign Min Wang Yi to visit Russia Sept. 18-21 for China-Russia strategic security consultations.

- US Sec of State Blinken to meet with China Vice Premier Han Zheng in NYC on Sept 18th.

- Apple new iPhone 15 series experienced surge in advance orders in China during Friday pre-sales.

- China Jan-Aug YTD Foreign Direct Investment (FDI) (CNY-denominated): CNY847.2B (~$116.4B), Y/Y growth -5.1% v -4.0% prior (weekend update).

- China Jun Client FX Net Settlement (CNY): 89.5B v 29.1B prior (weekend update).

- China Foreign Ministry has decided to apply sanctions on Northrop Grumman and Lockheed Martin - financial press [**Note: China has already sanctioned and fined Lockheed Martin for Taiwan arms sales several times earlier] (weekend update).

- "G77 + China Summit" in Cuba ends with calls for "multi-lateralism and international cooperation" (weekend update).

- IMF Managing Dir Georgieva: Urge China to work on boosting domestic consumption amid aging population and declining productivity because the growth model of infrastructure, pumping in more money, in this current environment is not going to be productive (weekend update).

- Reportedly China Defense Minister (Li Shangfu) is under investigation over corrupt procurement (weekend update).

- (CN) TTN Research Alert: >$2.0T in Western (mainly US) exposure to Chinese financial securities as per China SAFE records; China's real estate and financial sector linkage via an update on troubled China shadow bank Zhongrong Trust; Illustrating the risk to the wider China economy incl. Western financial firms' China investments. (weekend update).

- USD/CNY (CN) China PBOC sets Yuan reference rate: 7.1736 v 7.1786 prior.

- China PBOC Open Market Operation (OMO): Sells CNY184B in 7-day reverse repos v CNY105B prior; Sells CNY60B in 14-day reverse repos v CNY34B prior; Net injects CNY29B v Net drains CNY224B prior.


- Nikkei closed for holiday.

- Japan plans to let startups raise money from VC firms by selling digital assets such as cryptocurrency instead of stock.

South Korea

- Kospi opens -0.5% at 2,588.

- South Korea Finance Ministry: Lowers expected tax revenue for 2023, ~15% lower than budget plan; South Korea to seek early repayment of certain FX debt.

- North Korea leader Kim Jong Un met Russian Defence Min Shoigu in Vladivostok, who shows Kim Russia's hypersonic 'Kinzhal' missiles, as well as three nuclear-capable strategic aircraft.

- South Korea Vice Foreign Min Chang: China doesn't want to share its influence over North Korea with Russia (weekend update).

- South Korea is reviewing measures to limit currency and swap traders' tenure in local dealing rooms to 3 years from 5 years (weekend update).

Other Asia

- Singapore Aug Non-oil Domestic Exports M/M: -3.8% v 4.2%e; Y/Y: -20.1% v -17.1%e (11th straight monthly decline) - Electronic Exports Y/Y: -21.1% v -26.1% prior.

- Taiwan Semiconductor (TSM) Has reportedly told major suppliers, including ASML, to delay delivery of high-end chip-making equipment; TSMC said to be increasingly nervous about customer demand (weekend update).

- Thailand PM Srettha: Increasing minimum wage is a priority; to announce details of minimum wage increase in Nov; the minimum wage increase will take effect on Jan 1st.

North America

- UAW Pres Fain: Talks continue with slow progress; I don't really want to say we're closer; To meet with General Motors, Ford Motor. and Stellantis later on Sunday.

- (US) Sona BLW Precision Forgings Ltd of India announces that UAW workers in the US went on strike at 3 OEM plants on Sept 15th.

- House Republican GOP factions said to reach deal on stop gap funding push for US gov't.

- White House National Security Advisor Sullivan held weekend talks (Sept 16-17) with China’s top diplomat Wang Yi in Malta; Talks centered on improving US-Sino relations.


- UK Sept Rightmove House Prices M/M: +0.4% v -1.9% prior; Y/Y: -0.4% v -0.1% prior.

- EU may become as hooked on China batteries as it was on Russian energy - Korea press.

- ECB's Muller (Estonia, hawk): Sees no further rate hikes needed; Notes strong case to quicken balance-sheet rolloff.

- ECB’s Holzmann (Austria, hawk): We definitely can’t say that this was the final hike, but the likelihood of another hike is not big; Inflation risks haven’t receded lately.

- ECB's Kazaks (hawk, Latvia): Sept rate move was not a 'dovish hike'; Does not preclude future decisions. Apr rate cut would be inconsistent with macro scenario (weekend update).

Levels as of 01:20 ET

- Nikkei 225, closed, ASX 200 -0.6% , Hang Seng -1.4%; Shanghai Composite -0.1% ; Kospi -1.2%.

- Equity S&P500 Futures: +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 +0.5%.

- EUR 1.0660-1.0674 ; JPY 147.64-147.88 ; AUD 0.6427-0.6449 ; NZD 0.5897-0.5919.

- Gold +0.2% at $1,949/oz; Crude Oil +0.6% at $90.59/brl; Copper flat at $3.7957/lb.

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