Equities track US declines, 2nd straight contraction in US ISM Manufacturing data eyed

Asia Market Update: Equities track US declines, 2nd straight contraction in US ISM Manufacturing data eyed; Bank branch closures seen in HK as protests escalate; Kospi underperforms amid another launch by North Korea

General Trend:

- North Korea may have fired submarine-launched ballistic missile (Yonhap)

- South Korean chipmakers decline, Samsung may report prelim Q3 results on Friday (Oct 4th)

- Hang Seng returns from Tuesday’s holiday to continued protests; Protestors vowed to step up action after police shooting of teenager (SCMP); Various bank branch closures reported

- Chinese markets will return from holiday on Oct 8th (Tuesday)

- NAB disclosed ~A$1.2B in added provisions, weighs on banking sector

- Banks, Marine/Transportation and Iron/Steel firms are among the decliners in Japan

- Fast Retailing is expected to report Sept SSS after Tokyo close

- JGB Futures rise, on Tuesday's session (Oct 1st) JGB Futures had their largest daily drop in 3-years

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened -0.2%

- NAB.AU Reports additional A$1.18B costs related to remediation, will reduce H2 cash earnings by ~A$1,12B

- (AU) Reserve Bank of Australia (RBA) Gov Lowe: Can't ignore global easing trends; Board recognizes that monetary policy still works, Cutting rates as insurance against possibility of noticeable slowdown - speaking at RBA Board Dinner with the business community, Melbourne (overnight)

- (AU) Australia Labor is intensifying its demands for the PM Morrison to release the transcript of a conversation with Trump, accusing Morrison of cosying up to the US President at the expense of Australia's national interest - Aussie press

- MYX.AU Signs 20-year license agreement for novel oral contraceptive

- (AU) Australia sells A$1.2B v A$1.2B indicated in 1.50% June 2031 bonds, avg yield 1.0054% v 1.1779% prior, bid to cover 2.2x v 2.0x prior

Japan

- Nikkei 225 opened -0.6%

- (JP) Japan Chief Cabinet Sec Suga: North Korea ballistic missile may have landed in Japan EEZ off Shimane Prefecture and one outside of EEZ

- (JP) Bank of Japan (BOJ) Q3 Tankan Company Survey of CPI Expectations: Maintains outlook from Q2

- (JP) Japan PM Abe: Confirms North Korea launched 2 ballistic missiles on Wed (Oct 2nd); Strongly condemn North Korea missile launches, they breach UN resolution

- (JP) Japan LDP official Amari: Japan to act quickly to address any sales tax hike fallout, will do best to not raise tax again

- 7012.JP Issues 3-year targets: FY21 Targets: Op profit of at least ¥100B; at least 6% op margin and at least 10% pre-tax ROIC

Korea

- Kospi opened -0.7%

- (KR) South Korea Fin Min Hong: Will be difficult to achieve the 2019 GDP projections of 2.4-2.5% - speaking in Parliament

- (KR) Chairmen of the Joint Chiefs of Staff of South Korea, the United States and Japan held a trilateral meeting in Washington today about South Korea decision to pull out of intelligence sharing agreement – Yonhap

- (US) US and North Korea reportedly agreed to hold working level talks on Oct 5th - North Korean press

- (KR) North Korea launched a missile - Japan and Korean Press

- (KR) Follow Up: North Korea may have fired submarine based ballistic missiles - Yonhap

China/Hong Kong

- Hang Seng opened -0.7%; Shanghai Composite closed

- (HK) Hong Kong protesters vow to step up action after police shot teenager in the chest yesterday – SCMP

- (HK) Hong Kong Bar Association said to be experiencing cooling relations with China, with reports of a total breakdown in communication with mainland authorities - SCMP

Other Asia

- (ID) Indonesia Central Bank (BI) Hendarsah: Will guard the stability of currency, will carry out bold intervention in bonds if outflows are seen

North America

- (US) SEPT ISM MANUFACTURING: 47.8 V 50.0E; PRICES PAID: 49.7 V 50.5E (lowest since June 2009)

- AMTD Announces $0 commissions for online stock, ETF, and option trades; expects impact to Rev of $220-240M/quarter

- JNJ Reaches combined $10M Settlement Agreement with Two Ohio Counties Ahead of Upcoming Opioid Trial

Europe

- (UK) PM Johnson plans to announce tomorrow a 'two borders for four years' Brexit idea - UK's Telegraph

- (UK) Fin Min Javid expected to delay budget release until after Oct 31 no deal Brexit deadline - FT

- (IE) Ireland Min: UK Brexit proposal as reported is unacceptable

-(RU) Russia Energy Min Novak: OPEC+ output cuts arent permanent, Russia will join in these cuts when necessary - Russian press

Levels as of 01:20ET

- Hang Seng -0.1% ; Shanghai Composite closed; Kospi -1.5%; Nikkei225 -0.5%; ASX 200 -1.3%

- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 -0.4%

- EUR 1.0942-1.0929; JPY 107.89-107.64 ; AUD 0.6719-0.6698; NZD 0.6255-0.6234

- Commodity Futures: Gold -0.4% $1,482/oz; Crude Oil +1.3% at $54.33/brl; Copper +0.7% at $2.583/lb