Equity indices trade lower amid holidays and recent US declines

Asia Market Update: Equity indices trade lower amid holidays and recent US declines; AU Resources index extends drop; Evergrande concerns weigh on HK Property and Financial indices; AUD and CNH decline.

General trend

- US equity FUTs have extended declines.

- Hang Seng declines by over 4% [Financials drop, Evergrande declines over 14%].

- HK casino names trade generally lower ahead of meeting with Macau officials.

- PBOC conducted OMO on Sat. [Note: Some analysts see PBoC injection as sign the authorities were seeking to soothe market nerves frayed by concern over quarter-end funding needs and China Evergrande Group’s debt crisis].

- Shanghai markets are closed for holiday on Mon-Tues (Sept 20-21).

- S&P ASX 200 Resources index again declines by over 4% [Iron Ore miners extend drop].

- Japan markets are closed for holiday.

- AUD lags amid weaker equities and iron ore FUTs; RBA Minutes due tomorrow.

- CNH drops amid Evergrande concerns; Evergrande’s debt repayment dates in focus.

- Copper and Iron Ore FUTS extend declines, focal points include Fed meeting and China property market.

- Iron ore continues to decline with main headwinds China targeting cuts to steel output, rising global supply and property developer contagion fears amid Evergrande's debt crisis.

- Indonesia is mulling nickel tax?.

- Natural Gas FUTS continue to move lower.

- Japan LDP's Kishida is now the favorite to be the next party leader (poll).

- Sept 22nd Fed decision in focus (Wed).

- The next North American SEMI Billings report is September 20, 2021 at 3:00pm Pacific.

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened -0.2%.

- TCL.AU New South Wales Govt confirms WestConnex sale of A$11B to Sydney Transport Partners consortium.

- (NZ) New Zealand Aug Performance Service Index: 35.6 v 55.9 prior.

- AST.AU Announces indicative, non-binding proposal of A$2.50/shr from Brookfield Asset Management, to be reduced by any dividends that are proposed prior to the implementation of the proposed transaction; board in favor.

- (AU) Reserve Bank of Australia (RBA) Offers to buy A$1.60B in Govt bonds v A$1.60B prior.

Japan

-Nikkei 225 closed for holiday.

- 7267.JP Notes that for Aug and Sept, Japan production is running 60% lower than planned due to part shortages, expected to last into Oct.

- (JP) Said that Japan is considering lifting coronavirus state of emergency at end of Sept – press.

- (JP) Japan LDP's Kishida favorite to be next party leader according to Mainchi poll.

- (JP) Japan LDP Leadership candidate Takaichi said to want the BOJ Focus to be on jobs - Nikkei.

Korea

-Kospi closed for holiday.

- (KR) South Korea ruling DP party chief Song: United States must not return to the so-called strategic patience when dealing with North Korea, current administration policy on the North may be too "vague".

China/Hong Kong

-Hang Seng opened -1.1%; Shanghai Composite closed for holiday.

- (HK) Hong Kong held its first "patriots only" election, final results show on 1 pro-democracy candidate won a seat out of 1.5K seats.

- 3333.HK Next interest payments due Thursday, to be closely watched for possible default and spillover.

- (CN) New Universal Studios theme park in Beijing, to open today (Monday), saw tickets for its grand opening sell out in 30 minutes at CNY638/each ($99).

- (CN) China PBOC conducted extra Open Market Operation (OMO) Saturday Sept 18th: Injects CNY50B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Sells CNY50B in 14-day reverse repos v CNY0B prior; Net inject CNY100B v Net CNY90B prior.

- (CN) China railways expected to transport 10.5M passengers Sunday (1st day of the Mid-Autumn Festival).

- (HK) Macau officials will meet gaming industry names this afternoon to consult the operators on a proposed casino law revision announced last week.

- (CN) China Premier Li Keqiang: China will continue to stabilize commodity prices - financial press.

Other

- (ID) Nickel Mines [NIC.AU] notes rumors related to Indonesia nickel tax; understands that the reported comments were made without prior consultation with other Indonesian Government Ministries, including the ministry which would be responsible for the introduction of such a tax, the Ministry of Energy and Natural Resources (MEMR).

North America

- (US) US investigating 30M vehicles over possible airbag defects – press.

- (US) NIH's Fauci: FDA's final decision on allowing booster shots is expected during upcoming week.

- AMZN Said that UK PM Johnson will tell company it must pay fair share of taxes.

- AAPL Reportedly more than 2M iPhones 13 were reordered on Chinese website JD.com v ~1.5M iPhones 12 y/y – press.

- (US) Senate parliamentarian found that the social policy bill will not be able to create a path to citizenship for an ~8.0M undocumented workers; “policy changes of this proposal far outweigh the budgetary impact scored to it and it is not appropriate for inclusion in reconciliation".

Europe

- (SE) Sweden PM Lofven: Sweden debt to GDP ratio will fall to 35% (currently 40%), the economy can withstand surging energy prices.

- (UK) Sept Rightmove House Prices M/M: +0.3% v -0.3% prior; Y/Y: 5.8% v 5.6% prior.

Levels as of 01:15ET

- Hang Seng -3.8%; Shanghai Composite closed for holiday; Kospi closed for holiday; Nikkei225 closed for holiday; ASX 200 -2.1%.

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

- EUR 1.1732-1.1710; JPY 110.04-109.86; AUD 0.7268-0.7227; NZD 0.7045-0.7017.

- Commodity Futures: Gold -0.2% at $1,748/oz; Crude Oil -0.9% at $71.20/brl; Copper -2.0% at $4.16/lb.