China Premier reiterates currency won’t be used as trade tool

Asia Market Update: Status of US/China trade talks unclear after recent round of tariffs: China Premier reiterates currency won’t be used as trade tool

General Trend:

- Asian equites track US gains

- Japan steel makers continue outperformance

- China to levy tariffs on $60B worth of US goods at 5-10% rates, effective Sept 24th (counters US move)

- China mulling sending Vice Commerce Minister instead of Vice Premier for trade talks this month in US (Press)

- Few surprises seen in the BoJ’s policy statement , Gov Kuorda to hold press conference at 2:30 AM EST

- New Zealand Q2 GDP due for release on Thursday

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.2%

- (AU) Australia Aug Westpac Leading Index M/M: 0.1% v 0.0% prior

- (NZ) NEW ZEALAND Q2 BOP CURRENT ACCOUNT BALANCE (NZ$): -1.6B V -1.32BE; CURRENT ACCOUNT GDP RATIO YTD: -3.3% V -2.9%E

- (NZ) New Zealand Q3 Westpac Consumer Confidence: 103.5 v 108.6 prior (6-year low)

- (NZ) New Zealand to offer NZ$150M in April 2037 bonds at auction on Sept 20th

China/Hong Kong

- Shanghai Composite opened -0.2%, Hang Seng +0.3%

- (CN) China Premier Li Keqiang: China will further open itself at a faster pace: Has been sluggish global growth and sluggish trade recently; will not resort to forceful stimulus; reiterates won't devalue yuan to stimulate exports

- (CN) China PBoC Open Market Operation (OMO): To inject CNY60B in 7 and 14-day reverse repos v CNY200B injected in 7 and 14-day reverse repos prior: Net: Nil v CNY200B injection prior

- (CN) China PBoC set yuan reference rate: 6.8569 v 6.8554 prior

- (CN) China Cotton Futures decline over 2% after China announces retaliatory tariff measures on the US

- (CN) China Shanghai said to crack down on certain property market violations - Chinese Press

- (CN) China said to be drafting rules related to tax deduction for housing rents - Chinese Press

- (CN) Brokerage firms in China said to have been asked to increase control related to public comments - Chinese Press

- (CN) China government backed think tank says China can raise the leverage ratio of the government - Chinese Press

- (CN) Moody's: Yuan (CNY) depreciation will not impact China credit profile for now; yuan will show greater volatility over time

Japan

- Nikkei 225 opened +1.4%

-TOPIX index trades at highest level since June

- Japan 10-yr JGB yield traded above 0.115% ahead of BoJ policy decision (highest since early Aug); Tracks increase in US Treasury yields

- (JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED; Vote on yield curve control 7-2 (Harada and Kataoka again dissent)

- (JP) JAPAN AUG TRADE BALANCE: -444.6B V -¥483.2BE; ADJUSTED TRADE BALANCE: -190.4B V -¥144.1BE

Korea

- Kospi opened +0.4%

- (US) Pres Trump: Trade deal with South Korea is done and may be signed at UN General Assembly meeting this month - press conf with Polish Pres

- (KR) North Korea leader Kim signs military agreement with South Korea President Moon, aimed at reducing military tensions

Other

- (MY) Malaysia Aug CPI Y/Y: 0.2% v 0.4%e (3-year low)

North America

- US equity markets ended higher: Dow +0.7%, S&P500 +0.5%, Nasdaq +0.8%, Russell 2000 +0.4%

- MGM [MGM]: Starboard said to take $500M stake (NY Post)

- (US) Senate passed stopgap spending bill to avoid govt shutdown to keep govt funded through early Dec (Press)

Europe

- (UK) Prime Min May: exit deal is 'virtually agreed' to; rules out holding a second Brexit vote - UK press

- (UK) There is speculation that UK PM May to use the Salzburg meeting to seek a Brexit compromise solution for the Ireland border - FT

- (UK) BoE Vlieghe: Several indicators show low jobless rate making it hard for employers to find or keep staff; UK pay growth is accelerating 'quite slowly' - UK Press

Levels as of 01:30ET

- Nikkei 225, +1.2%, ASX 200 +0.5%, Hang Seng +1.4%; Shanghai Composite +1.2%; Kospi +0.1%

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

- EUR 1.1666-1.1653 ; JPY 112.44-112.22 ; AUD 0.7257-0.7207 ;NZD 0.6599-0.6572

- Dec Gold +0.3% at $1,207/oz; Oct Crude Oil -0.3% at $69.41/brl; Dec Copper +0.4% at $2.749/lb