Equity indices trade mixed

Asia Market Update: Equity indices trade mixed; RBA ended YCC (as expected), Aussie yield curve steepens.

General trend

- Nikkei 225 has remained modestly lower.

- Japanese companies expected to report earnings include Nippon Steel and Japan Airlines; Fast Retailing due to issue monthly sales.

- Japan markets are closed tomorrow (Nov 3rd).

- Hang Seng has pared the opening gain [TECH index rises, Property sector lags].

- Shanghai Composite ended morning trading lower [Property index extends drop].

- China's most traded Dalian iron ore futures contract falls 10% after steel curbs continue to weigh on demand.

- S&P ASX 200 declined ahead of the RBA decision [Financials and Resources indices dropped]; the index later pared decline.

- South Korea CPI again comes in above target range in October, but mostly attributed to low base effect, but analysts note that even adjusting for this CPI remains well above 2% target for the 7th month, adding to the case for another rate increase.

- NZ Q3 Labor Market data is due on Wed (Nov 3rd).

- Companies due to report during the NY morning include Arconic, Bausch Health Companies, Cummins, CNH, ConocoPhillips, Corsair Gaming, DowDuPont, Estee Lauder, Eaton Corp, Evonik, Generac, Henry Schein, Ingredion, IPG Photonics, Gartner, KKR, Lear Corp, Louisiana Pacific, Martin Marietta Materials, Marathon Petroleum, Pfizer, Ralph Lauren, Thomsons Reuters, Under Armour, Westlake Chemical, Zebra Technologies.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened 0.0%.

- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%; AS EXPECTED; REMOVES 3-YEAR YIELD TARGET (AS EXPECTED); Adjusts wording of forward guidance to "likely to take some time" (drops 2024 reference).

- (AU) Reserve Bank of Australia (RBA) Gov Lowe: Now plausible that lift in cash rate could be appropriate in 2023+; Latest data and guidance do not warrant increase in cash rate in 2022; still entirely possible cash rate will remain at current level until 2024; Finally, in terms of the bond purchase program, we will be including the April 2024 bond in our regular auctions from next week; 2.5% inflation would not justify higher rates.

- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Unsustainable level of house prices poses monetary and financial stability challenges and have become more so over the last 12 months, reiterates using monetary policy to target house prices is not our mandate.

- (NZ) New Zealand Sept Building Permits M/M: -1.9% v 3.8% prior (1st contraction in 5 months).

- IAG.AU Cuts FY22 Reported Margin 10-12% (prior 13.5-15.5%); Raises FY22 Natural Perils claims to A$1.05B.

Japan

- Nikkei 225 opened -0.6%.

- (JP) Japan Fin Min Suzuki: Still considering details of cash handouts; FX Stability remains important.

- (JP) Japan to ease COVID-related entry rules for certain foreigners for short business trips, study abroad, and technical training; To announce policy changes as soon as this week – Nikkei.

- (JP) Bank of Japan (BOJ) Meeting Minutes: Economy to improve as pandemic impact subsides; To closely monitor impact of coronavirus, discussed COVID program tapering.

- (JP) Japan Chief Cabinet Sec Matsuno: One idea for raising wages is to require small and medium sized companies to receive subsidies.

Korea

- Kospi opened +0.6%.

- (KR) SOUTH KOREA OCT CPI M/M: 0.1% V 0.2%E; Y/Y: 3.2% V 3.3%E (highest since Jan 2012); CPI Core Y/Y: 2.8% v 2.6%e (fastest since 2015).

- (KR) South Korea Finance Ministry: To conduct KRW2.0T ($1.70B) of emergency South Korea Treasury Bond (KTB) buyback to stabilize markets; To announce which govt bonds to buyback.

China/Hong Kong

- Hang Seng opened +1.8%; Shanghai Composite opened 0.0%.

- (CN) China Securities News: PBOC lower injections does not signal tighter liquidity.

- (CN) China People's Daily calls on Govt to build more EV charging stations.

- (CN) China PBOC sets Yuan reference rate: 6.4009 v 6.4192 prior.

- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B prior; Net Drain CNY190B v Net drain CNY190B prior.

- 388.HK Said to be considering relaxing three requirements in SPAC framework - local press.

- (CN) China State Planner (NDRC): China has seen significant improvement in coal supply as production has expanded and prices have stabilized (yesterday after the close).

- (CN) Global Times' Hu Xijin: Reunification of Taiwan island is inevitable, the most important thing is not the timetable, but at which point and in which specific way the reunification will be most beneficial to China's overall national strategy (yesterday after the close).

- (HK) Hong Kong Q3 Advance GDP Q/Q: 0.1% v 0.6%e; Y/Y: 5.4% v 5.7%e (avoids technical recession) (yesterday later in session).

Other

- (SG) Monetary Authority of Singapore (MAS) Gov Menon said prepared to act against inflation risks; recently announced policy tightening was deliberately small on risk related to growth – US financial press.

North America

- AAPL Said to cut iPad production to use saved chips in iPhone 13 production - Press.

- CLX CEO: To raise prices on 70% of our consumer product portfolio - earnings call comments.

- JNJ California judge finds JNJ, Teva Pharmaceutical and other former opioid makers didn’t create a public health crisis through misleading marketing of Opioids, defeating $50.0B case – press.

- DD Said to be exploring options for mobility and materials unit, also close to deal to acquire electronics materials company, Rogers Corp for $4.0B, could be announced tomorrow – press.

- TSLA CEO Musk: No contract has been signed with Hertz yet, deal would have 0 effect on economics, will sell them cars at the same margin as consumers.

Europe

- STAN.UK Reports Q3 adj Pretax $1.08B v $745M y/y, Op income $3.77B v $3.52B y/y.

- (UK) UK Govt: Welcome France's decision to not go ahead with measures, ready to continue talks on fisheries, welcome France's acknowledgement that in depth talks are needed.

Levels as of 01:15ET

- Hang Seng +0.4%; Shanghai Composite -1.2%; Kospi +1.4%; Nikkei225 -0.5%; ASX 200 -0.6%.

- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.1%, Dax -0.2%; FTSE100 -0.1%.

- EUR 1.1608-1.1595; JPY 114.14-113.64; AUD 0.7532-0.7487; NZD 0.7190-0.7169.

- Commodity Futures: Gold -0.0% at $1,795/oz; Crude Oil -0.1% at $84.00/brl; Copper -0.8% at $4.35/lb.