Equity markets generally improve

Asia Market Update: Equity markets generally improve; WTI Crude FUTs extend gains; UST FUTs extend losses.

General trend

- GBP rises amid BOE comments.

- USD/JPY trades at the highest level since late 2018 amid recent rise in UST yields.

- Nikkei rebounds from opening decline [Yen extends drop; Kishida played down tax concerns]; Topix Banks index supported by higher UST yields.

- Hang Seng has extended gain [TECH index rises after Meituan news; Lenovo drops on withdrawal of listing application] Property index lags, various CN/HK property developers in the headlines (Evergrande, Fantasia, Modern Land).

- Shanghai Composite has remained slightly higher.

- S&P ASX 200 has declined after opening flat [Star Entertainment weighs on Consumer Discretionary index].

- US equity FUTs decline after higher open.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened flat.

- Star Entertainment [SGR.AU]: Issues response to media reports concerning allegations.

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

- (NZ) New Zealand PM Ardern: Need to maintain coronavirus restrictions longer; Auckland to remain in Lv 3 lockdown, to review in 1 week.

China/Hong Kong

- Hang Seng opened +1.3%, Shanghai Composite +0.2%.

- (CN) China State Council said to call to that energy supply be ensured; To allow power generators to increase industrial tariff by 20% - financial press.

- Evergrande [3333.HK]: Reportedly Evergrande's offshore creditors' advisers prepare backup contingency plan – press [Oct 8th].

- (CN) China Vice Premier Liu He: China is negotiating cancellation of tariffs and sanctions; Exchanged views with USTR on the trade agreement - comments after Friday teleconference.

- (CN) China City Harbin (NE China) said to be offering home buyers a subsidy of up to CNY100K for a purchase - China Daily.

- (CN) China Sec Journal: PBOC may roll over MLF with a larger amount in Oct to maintain reasonable growth of credit and money supply [Note: PBOC normally conducts MLF operations around the 15th of the month].

- (CN) Funds raised by property trust firms in China declined by >40% m/m in Sept [amid issues related to Evergrande] – Shanghai Securities News.

- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B prior; Net drain CNY190B v Net drain CNY320B prior [Oct 11th].

- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B prior; Net drain CNY320B v Net drain CNY330B prior [Oct 9th].

- (CN) China PBOC sets Yuan reference rate: 6.4479 v 6.4604 prior.

- Lenovo [992.HK]: Withdraws application to list on Shanghai STAR board.

- Meituan [3690.HK]: China's market regulator fines Meituan CNY3.4B for conducting monopolistic behaviour - press.

Japan

- Nikkei 225 opened -0.3%.

- (JP) Japan Chief Cabinet Sec Matsuno: Will strengthen tax system towards raising wages first.

Korea

- Kospi is closed for holiday.

Other Asia

- (SG) Singapore PM: Will allow vaccinated travelers from more countries, including UK and US, to enter without quarantining.

North America

- (US) Treasury Sec Yellen: confident that Congress will be able to raise debt ceiling on Dec 3rd.

- (US) Senate minority leader McConnell sends letter to Pres Biden saying he will not provide assistance again to Democrats in raising the US debt limit.

- (US) Goldman Sachs analysts cut US 2021 GDP growth forecast from 5.7% to 5.6%; Cuts US 2022 GDP growth forecast from 4.4% to 4.0%.

- (US) Fed's Daly (non-voter, dove): labor market is going to have ups and downs, especially with the Delta variant; It is too soon to say that it is stalling.

Europe

- (UK) BOE Gov Bailey: Inflation will be higher than our forecast; Concerned with inflation being above target - press interview.

- (UK) BOE's Saunders (QE dissenter): households should get ready for “significantly earlier” interest rates rise due to increasing inflation pressure - UK press interview.

- (UK) UK Manufacturers of steel, glass, ceramics and paper, have warned the govt that unless something is done about rising wholesale gas prices they could shut down production.

- (UK) Brexit Min Frost expected to tell EU Tuesday that "significant change" to the Northern Ireland protocol is vital for the restoration of genuinely good relations between EU and UK – press.

- (UK) China Customs: bans imports of UK cattle beef that is under 30 months in age due to mad cow disease case found in beef.

- (AT) Austria Chancellor Kurz steps down after pressure from his coalition partner, the Greens; proposes Foreign Min Alexander Schallenberg as next PM, will remain as party leader.

Levels as of 01:20 ET

- Nikkei 225, +1.5%, ASX 200 -0.3% , Hang Seng +2.2%; Shanghai Composite +0.5% ; Kospi closed.

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

- EUR 1.1579-1.1563 ; JPY 112.72-112.15 ; AUD 0.7332-0.7291 ;NZD 0.6947-0.6916.

- Gold flat at $1,757/oz; Crude Oil +2% at $80.94/brl; Copper +0.2% at $4.2900/lb.