Aussie Dollar and bond yields decline amid RBA language change, China trade balance below ests

Asia Market Update: Aussie dollar and bond yields decline amid RBA language change; China trade balance below ests; CN also issued rare earth export rules.

General trend

- Is the RBA done with rate hikes?

- Equity markets decline.

- Kospi declines after prior gain [Reminder Nov 5th: South Korea govt confirms new temporary ban on short selling until June 2024; Applies to all listed stocks in South Korea].

- Upcoming Nintendo earnings in focus.

- BOK might release minutes.

Headlines/economic data

Australia/New Zealand

-ASX 200 opens flat at 6,999.

-RESERVE BANK OF AUSTRALIA (RBA) RAISES CASH RATE TARGET BY 25BPS TO 4.35%; AS EXPECTED; Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable time-frame will depend upon the data and the evolving assessment of risks.

- Australia PM Albanese: Satisfied that have positive engagement between China and Australia - comments following meeting with China President Xi.

-Origin Energy [ORG.AU]: Brookfield consortium said to consider hostile bid - Australian press.

-New Zealand Treasury: Indicators confirm economic slowdown is under way.

-RBNZ announces key decisions on review of policy for branches of overseas banks.

China/Hong Kong

-Hang Seng opens -0.6% at 17,850.

-Shanghai Composite opens -0.2% at 3,052.

-China Commerce Ministry: Issues new rules to strengthen management of rare earth exports; effective from Oct 31 2023 to Oct 31 2025 [China is the largest global rare earths producer].

-CHINA OCT TRADE BALANCE: $56.5B V $82.0BE; Exports Y/Y: -6.4% v -3.5%e; Imports Y/Y: +3.0% v -5.0%e.

-China PBOC expected to inject liquidity by using RRR cut or MLF in 2023; cites analyst - China Securities News.

-China PBOC Deputy Gov Zhang: Do not worry too much about China economy; economic recovery picked up notably.

-China PBoC said to make mortgage rates more market-based - press.

-(US) Treasury Sec Yellen said to meet China Vice Premier in San Francisco on Nov 9-10th - press.

-Vanke: Shenzhen Metro Group Co., Ltd. (the “SZMC”), as the largest shareholder of the co., stated on the communication meeting with financial institutions that SZMC is firmly optimistic about the prospect of the co.

-Sino-Ocean: Announces SOG [unit] China intends to negotiate the adjustment on repayment with the holders of the Corporate Bonds; trading of the Corporate Bonds will be suspended with effect from the commencement of the trading hours of The Shanghai Stock Exchange on 7 Nov.

-Tesla: Says plans to raise price of Model Y vehicles in China.

-China Commerce Ministry (MOFCOM): Sets 2024 fertilizer import quota at 13.7M Mts.

-CSRC Vice Chairman Wang [China Securities Regulator]: To deepen Connect program, including block trading.

-China PBOC Open Market Operation (OMO): Sells CNY353B in 7-day reverse repos; Net drains CNY259B.

-China PBOC sets Yuan reference rate: 7.1776 v 7.1780 prior.

Japan

-Nikkei 225 opens -0.5% at 32,551.

-Japan sells ¥250B in 10-year inflation-linked JGB Bonds; Yield at lowest accepted price: -0.480% v -0.51% prior, bid-to-cover: 2.73x v 2.91x prior [lowest BTC since 2017].

-JAPAN SEPT LABOR CASH EARNINGS Y/Y: 1.2% V 1.1% PRIOR; Real Cash Earnings Y/Y: -2.4% v -2.5% prior.

-Japan Sept Household Spending Y/Y: -2.8% v -2.5% prior.

-Japan Economy Min Nishimura: Economic package will help ensure solid wage gains; wage gains of 5.0% plus alpha needed for the economy.

Korea

-Kospi opens -1.0% at 2,476.

-South Korea Pres Yoon may appoint Choi as Fin Min - press.

- South Korea Vice Fin Min: FX authorities will continue to monitor currency markets.

Other Asia

- Foxconn: Reports Oct (NT$) Rev 741.2B -4.6% y/y, +12.2% m/m; Affirms Q4 business growing significantly q/q (update).

-Philippines Oct CPI M/M: -0.2% v +0.5%e, Y/Y: 4.9% v 5.6%e.

North America

-(US) Fed's Kashkari (voter): Not convinced that rate tightening is over; Would err on the side of doing more rather than failing to do enough.

-(US) Fed's Cook (voter): Remains determined to reached the 2% inflation target; Fed trying to balance two sided risks in hope of soft landing.

Europe

-(UK) Oct BRC LFL Sales Y/Y: 2.6% v 2.8% prior.

Levels as of 00:20 ET

- Nikkei 225, -1.3%, ASX 200 -0.3% , Hang Seng -1.4%; Shanghai Composite -0.2% ; Kospi -2.8%.

- Equity S&P500 Futures: -0.2%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 -0.1%.

- EUR 1.0723-1.0705 ; JPY 150.29-149.93 ; AUD 0.6502-0.6434 ;NZD 0.5976-0.5931.

- Gold -0.5% at $1,978/oz; Crude Oil -0.4% at $80.48/brl; Copper -0.6% at $3.6917/lb.