Asia Market Update: Indices open mostly higher ahead of expected conclusion of low-level US/China trade talks; PBOC as expected cut 1-yr LPR, but left 5-yr rate unchanged; Big Aussie banks now all expect RBA to ease in Oct
General Trend:
- Aussie consumer stocks outperform amid near-term rate cut expectations
- Japanese banks rise as BoJ cut longer-term bond purchases at daily operation, trade-sensitive Marine/Transportation index also rises
- There has been renewed speculation about possible interim trade deal between the US and China, low-level trade talks due to conclude later today
- Offshore yuan (CNH) rises, PBoC to sell bills in Hong Kong on Sept 26th
- China sells 50-year bonds at higher than expected yield
- Kiwi declines ahead of next week’s RBNZ official cash rate (OCR) decision (Wed Sept 25th)
- Australia PM Morrison expected to meet with US President Trump in Washington D.C on Friday
Headlines/Economic Data
Australia/New Zealand
-ASX 200 opened +0.5%
-(AU) NAB: Now expects RBA to cut rates in Oct and Dec 2019 [vs rate cuts in Nov 2019 and Feb 2020 prior]; Big Aussie banks are now all calling for Oct 2019 rate cut
-(AU) Citi sees RBA cutting rates in Oct (prior Nov)
-(US) US senior administration official: Australia and US to announce a plan to boost supply of rare earth metals tomorrow - press
China/Hong Kong
-Shanghai Composite opened +0.2%, Hang Seng +0.2%
-(CN) Some analysts see risk that Q3 GDP growth in China could decline below 6% amid trade war [China’s official government GDP growth forecast for 2019 is 6.0-6.5%] - US financial press
-(CN) China PBoC sets 1-year loan prime rate (LPR) at 4.20% v 4.25% prior (4.20%e); sets 5-year LPR at 4.85% v 4.85% prior (4.80%e)
-(US) White House advisor Kudlow: See softening in the mood as US and China officials meet this week
-(CN) China Centre for International Economic Exchanges' Chief Economist Wenling: China, US could be close to agreeing interim trade war deal – SCMP
-(CN) Chinese trade negotiators reportedly intend to visit US farm country after talks wrap up in Washington this week - CNBC
-(CN) US Ag Sec Perdue: doesn't know about China plans to buy crops next week – press
-(CN) China Pres Xi urges nations to cooperate in the manufacturing sector
-(CN) China PBOC sets Yuan Reference Rate: 7.0730 v 7.0732 prior
-(CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 7-day and 14-day reverse repos v CNY170B prior in 7-day and 14-day; Net injection CNY120B v drain CNY170B prior
-(CN) China Environment Min: Cities that met last year's targets will be exempt from this year's targets; will set higher targets for cities that had higher air quality concentrations higher than PM2.5 last Fall and Winter
Japan
- Nikkei 225 opened +0.4%
- (JP) JAPAN AUG NATIONAL CPI Y/Y: 0.3% V 0.3%E; CPI EX-FRESH FOOD (CORE) Y/Y: 0.5% V 0.5%E (slowest rise since July 2017)
- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Cuts 5-10, 10-25, >25 year JGB purchases
- (JP) Bank of Japan (BOJ) to hold meeting regarding market operations on Oct 18
Korea
- Kospi opened flat
-(KR) South Korea Pres Moon approval rating at lowest since the start of his term - US Financial Press
-(KR) South Korea Fin Min: To pursue FTA agreements with Indonesia, Malaysia, and Philippines by end of 2019
-(KR) North Korea may be preparing a submarine capable of launching ballistic missiles - Japan Press
Other Asia
-(IN) India Fin Min is said likely to announce new efforts to boost the economy on Friday; may also review import tariffs on some items – press
- (IN) India Fin Min Sitharaman: proposes to cut corporate tax rates for domestic manufacturing companies
-(IN) India Central Bank (RBI) Gov Das: negative rates posing threat to financial stability; inflation below target and price stability give us room to cut
-(PH) Philippines Central Bank Chief Diokno: Sept CPI estimate at 1.4%; CPI to be within target even if oil is $90/barrel; Reiterates looking at 100bps RRR to come soon; very comfortable with PHP level; Central Bank has not intervened in FX market for a 'long, long time'
North America
-(US) New York Fed to conduct a fourth day of repo operations tomorrow morning (Friday)
-(US) SEMI: Aug North America Manufacture Billings: $2B, -1.4% m/m, -10.5% y/y
-SMTC Corp [SMTX]: Plans to exit China market on tariff and macroeconomic uncertainty; cuts FY19 guidance
Europe
-(EU) Incoming ECB President Lagarde: Central Bankers must be 'predictable' and focus on stability; global growth fragile and under threat
-(SA) Saudi-led coalition launches military operation north of Hodeidah in Yemen against 'military targets' - Local media
-(DE) German Fin Min Monthly Report: Global slowdown is weighing on Germany; started Q3 on weaker footing; sees continued contraction in industrial production
Levels as of 1:20 ET
- Nikkei 225, +0.2%, ASX 200 +0.4%, Hang Seng +0.1%; Shanghai Composite +0.2%; Kospi +0.4%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 -1.1%
- EUR 1.1061-1.1039 ; JPY 108.08-107.89 ; AUD 0.6809-0.6778 ;NZD 0.6311-0.6284
- Gold +0.3% at $1,511/oz; Crude Oil +0.9% at $58.70/brl; Copper +0.4% at $2.618/lb
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.