China not worried about trade war with US

Asia Market Update: Equities significantly weaker after a banner day yesterday; Japan reiterates sales tax hike plans; China not worried about trade war with US

General Trend:

- Asian equity markets trade generally lower

- Chinese automaker BAIC Motor trades at record low, reported 9-month results

- Australian equities weighed down by Utilities, Energy and Financial shares

- Shipping and Iron/Steel companies underperform in Japan

- Asian steelmaker earnings in focus

- Tokyo Steel declines ahead of expected earnings report

- South Korean steelmaker Posco declines ahead of expected earnings report

- Samsung Biologics declines over 4% ahead of expected earnings report

-China govt official Zhang Qingli reportedly told US investors at meeting that 'We don't fear a trade war with the US

- US companies expected to report earnings on Tuesday (including afterhours) include 3M, Arch Coal, Biogen, Caterpillar, Corning, Harley Davidson, Lockheed Martin, McDonald’s, Pulte Homes, Texas Instruments and Verizon

Headlines/Economic Data

Japan

- Nikkei 225 opened -0.9%

- 7202.JP Reportedly to partner with Nvidia on self-driving trucks and large commercial vehicles - Nikkei

- (JP) Japan to end new official development assistance to China - Japanese Media

-(JP) Former BOJ gov Shirakawa: Growing global debt may lead to the next economic crisis - Japan press

-(JP) Japan Fin Min Aso: 'In principle' the sales tax increase will happen as planned, some disruption expected when it takes place but will not delay for that

- Nomura: Planning to set up ¥100B fund with China sovereign wealth fund CIC - Japan press

Korea

- Kospi opened -0.7%

- (KR) According to economists South Korea needs to quickly take measures to prevent a possible interest rate hike next month from making a deeper dent in the country’s economic growth and employment - Korean press

- (KR) South Korea Sept PPI M/M: 0.3% v 0.5% prior; Y/Y: 2.7% v 3.0% prior

- (KR) South Korea Fin Min Kim: domestic financial and FX markets are stable

- Posco, 005490.KR Reports Q3 (KRW) Net 1.1T v 910Be; Op 1.5T v 1.4Te; Rev 16.4T v 16Te; Expect steel prices to remain solid due to China winter production cuts

China/Hong Kong

- Hang Seng opened -0.5%, Shanghai Composite -0.1%

- (CN) China govt official Zhang Qingli reportedly told US investors at meeting that 'We don't fear a trade war with the US'

- (CN) Brokerage firms in China to establish CNY21.0B asset management plan - China Securities Times

-(CN) China PBoC Open Market Operation (OMO): To inject CNY120B in 7-day reverse repos v CNY120B prior: Net: CNY120B injection v CNY120B prior

-(CN) China PBOC sets Yuan Reference Rate: 6.9338 v 6.9236 prior

-(CN) China Industry Ministry (MIIT) Official: China vehicle sales may grow slowly in the future

-(CN) China PBOC funds release from re-lending is not QE - China 21st

Australia/New Zealand

- ASX 200 opened flat

- (AU) New polling analysis shows collapse in support for Australia PM Morrison's Coalition in every mainland state since the leadership change - The Australian

- WPP.AU Cuts FY18 EPS tracking below current guidance of +3% y/y, now expects -15% to -13% y/y; Rev -2% to -1% y/y; CEO Mike Connaghan resigns, effective Dec 31st [-28%]

- BXB.AU Reports Q1 Rev $1.42B, +6% y/y at cc [-0.8%]

- HSO.AU Receives A$2.36/share cash offer from BGH Consortium; board to assess the proposal [+21%]

- (AU) Australia PM Morrison: Energy retailers to set price benchmarks for bills

- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 112.3 v 119.5 prior

- (AU) Rabobank sees Australia Winter 2018/19 wheat harvest at 29.3M tons, -23% y/y - Winter Crop Production Outlook

Other Asia

-(SG) Singapore Sept CPI M/M: 0.0% v 0.1%e; Y/Y: 0.7% v 0.8%e

North America

- US equity markets ended mixed: Dow -0.5%, S&P500 -0.4%, Nasdaq +0.3%, Russell -0.2%

- (US) President Trump seeking extra tax cut of 10% for middle income Americans

- TRPX FSD Pharma Signs Binding LOI to Acquire Therapix Biosciences, TRPX shareholders to receive $48M [+70% afterhours]

-(US) President Trump: Drug prices will soon be "plunging"

Europe

- (UK) OBR underestimate on tax receipts gives Finance Ministry a £13B/yr windfall in budget to ease pressure on National Health Service (NHS) - FT

- Bayer [BAYN.DE]: San Francisco judge in 'Roundup' case Ramos Bolanos ruled the $250M in punitive damages awarded by jury must be cut to match the ~$39.3M in compensatory damages - US financial press

Levels as of 01:30ET

- Hang Seng -2.2%; Shanghai Composite -1.3%; Kospi -2.8%; Nikkei225 -2.4%; ASX 200 -1.1%

- Equity Futures: S&P500 -0.8%; Nasdaq100 -0.9%, Dax -0.8%; FTSE100 -0.6%

- EUR 1.1468-1.1452; JPY 112.49-112.84 ; AUD 0.7059-0.7084;NZD 0.6537-0.6612

- Dec Gold +0.2% at $1,227/oz; Dec Crude Oil -0.3% at $69.19/brl; Dec Copper -0.1% at $2.77/lb