Equity markets generally reverse gains

Asia Market Update: Equity markets generally reverse gains; HSI extends loss amid continued Evergrande uncertainty; CNH declines, Biden’s China trade policy in focus [10-11 am EST].

General trend

- Equity indices pare gains amid trading halts for Evergrande and Evergrande Property Services; Evergrande speculated to sell majority stake in Property Services unit to Hopson Development.

- Vaccine makers trade generally lower after news related to Merck’s COVID pill.

- Japanese shipping cos. extend losing streak.

- Fast Retailing [largest Nikkei component] is due to issue monthly sales after the Tokyo close.

- HK casino names reverse gains on Macau/Zhuhai news.

- S&P ASX 200 rises after sharp drop on Friday [-2%]; Financials, Resources and Consumer Discretionary indices gain.

- Singapore traded higher on reduced quarantine period for travelers arriving and easing of entry requirements.

- NZD declined ahead of Wed’s RBNZ decision, there has also been some focus on the new COVID cases.

- Soybean FUTs decline ahead of US comments on China trade strategy.

- Shanghai markets are closed for holiday from Oct 1-7 (Fri-Thurs).

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened 0.0%.

- (NZ) RBNZ Shadow Board: Lockdown divides Shadow Board’s views on tightening.

- (NZ) Reserve Bank of New Zealand (RBNZ): Maintaining focus on economic wellbeing and prosperity - Annual Report.

- (AU) Reserve Bank of Australia (RBA): Excess cash at exchange settlement (ES) accounts at A$369.3B v A$365.8B prior.

- CBA.AU Completes A$6.0B off market share buyback at A$88.62/shr (79.4% scale back rate applied above priority allocation).

- (NZ) New Zealand PM Ardern: Extends Auckland Lv 3 lockdown, to be reviewed weekly; Rest of country to remain at lv 2.

Japan

-Nikkei 225 opened +1.0%.

- (JP) Japan LDP Sec Gen Amari said government will immediately compile a large extra budget after the general elections - financial press.

- 9984.JP Vision Fund 2 portfolio has quintupled the number of investments in startups in less then 9 months (115 so far) - press.

- (JP) Japan Fin Min Aso (outgoing): Believe international tax agreement will be official this month, currency has remained stable, at one point proposed to BOJ to lower 2% CPI target.

- (JP) Said that incoming Japan PM Kishida will hold a lower house election on Oct 31st - Press.

- (JP) Japan parliament officially elects Kishida as PM.

Korea

-Kospi closed for holiday.

- (KR) North Korea to restore inter-Korean hotline starting today – Yonhap.

China/Hong Kong

-Hang Seng opened -0.4%; Shanghai Composite to reopen Friday.

- 6666.HK Hopson to acquire 51% stake for HK$40B - Chinese press.

- (HK) Hong Kong largest independent trade union, Confederation of Trade Unions (HKCTU), disbanded on Sunday due to Security Law.

- (HK) Hong Kong Govt adviser David Hui: Reopening border with China will take 4-5 months of talks – SCMP.

- (HK) Hang Seng to announce Q3 review results Nov 19th.

- (HK) Macau halts border resumption plan with China Zhuhai city (Guangdong Province).

- 992.HK Shanghai Exchange accepts application related to CDR issuance.

Other

- (TW) China sent 77 warplanes into Taiwan defense zone over the past 2 days - Taiwan press citing Govt.

North America

- (US) Fed Vice Chair Clarida in 2020 financial disclosure traded into stocks day before Powell made statement on pandemic [in Feb 2020], said they were pre-planned for rebalancing - press over weekend.

- (CN) US Trade Rep Tai set to unveil China trade policy Monday after concluding top to bottom review of last administration's trade policy; expected to say that China is not complying with the Phase 1 trade deal; US said to consider potential actions against China [including possible additional tariffs], cites non-compliance with trade deal.

- press.

- NEO Guardant Health said to have decided against takeover offer – press.

Europe

- (UK) Govt has drawn up proposal to permanently replace agreement with the EU that’s in place to maintain an open border between Ireland and Northern Ireland - UK press.

- (UK) Reportedly UK Fin Min Sunak planning £500M fund to help people get into work - press.

- (UK) Trade Sec Truss: A post Brexit agreement with US President Biden, is not the "be all to end all" of trade deals, refuses to commit to signing a FTA with US by 2030 - UK press.

- (EU) Former ECB chief Trichet: In Europe, currently, you could say that the thesis that inflation is transitory can be accepted; the same claim in the US calls for some skepticism - press.

Levels as of 01:15ET

- Hang Seng -2.1%; Shanghai Composite closed for holiday; Kospi closed for holiday; Nikkei225 -1.1%; ASX 200 +1.2%.

- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.3%, Dax -0.4%; FTSE100 -0.2%.

- EUR 1.1614-1.1588; JPY 111.11-110.89; AUD 0.7283-0.7252; NZD 0.6953-0.6927.

- Commodity Futures: Gold +0.2% at $1,761/oz; Crude Oil -0.4% at $75.61/brl; Copper -0.3% at $4.19/lb.