Asia Market Update: Asia trades mostly lower after US declines, Hang Seng rises after lagging on Thurs; NZ to hold elections on Sat; Events for next week include China GDP and RBA speak.

General Trend

- Shanghai Composite ended the morning session lower by ~0.3%; Consumer and IT firms declined, Financials have continued to rise after the recent PBOC MLF operation

- Hang Seng TECH index opened higher by over 1.5%, chipmaker SMIC rose after increasing its Q3 guidance; Finance index rises over 1%

- Topix Pharma and Real Estate indices are among the decliners in Japan, gainers include Securities and Marine Transportation firms

- Fast Retailing (largest Nikkei component) rises over 3% after FY results and guidance

- Energy and Resource firms are among the decliners in Australia; Rio Tinto drops after quarterly production update; Financials trade generally flat

- AUD extends decline amid Thursday’s comments from RBA Gov Lowe, additional headlines related to China also seen; RBA Oct Minutes due on Oct 20th (Tues), RBA Assist Gov (Financial Markets) Kent is also due to speak on the same day; RBA Deputy Gov Debelle is due to speak on Oct 22nd (Thursday)

- China Q3 GDP data is due to be released on Monday (Oct 19th) [Sunday night in the US]

- NZ elections are due to be held on Oct 17th. (Saturday)

- Companies expected to report earnings during the NY morning include Bank of NY, JB Hunt Transport, Schlumberger, State Street, VF Corp

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened flat

- Rio Tinto [RIO.AU]: Reports Q3 Pilbara iron ore production 86.4Mt v 87.3Mt y/y; iron ore shipments 82.1Mt v 86.1Mt y/y; Affirms FY20 Pilbara Iron Ore shipments at 324-334Mt; Affirmed Capex forecasts

- (AU) China said to launch 'strike' related to cotton from Australia; spinning mills in China said to have been told to stop buying cotton from Australia - Australian media

- (AU) Australia sells A$1.0B v A$1.0B indicated in 0.25% Nov 2024 bonds, avg yield 0.1895%, bid to cover 7.0

- (NZ) New Zealand Sept Manufacturing PMI: 54.0 v 51.0 prior (4th straight expansion)

- (NZ) Reserve Bank of New Zealand (RBNZ) buys NZ$230M v NZ$350M prior in government bonds as part of QE v NZ$230M sought

- (NZ) Reserve Bank of New Zealand (RBNZ): Will seek to purchase NZ$880M v NZ$960M prior in government bonds next week

- (NZ) New Zealand Sept Non Resident Bond Holdings: 49.4% v 49.5% prior

China/Hong Kong

- Hang Seng opened +0.2%, Shanghai Composite +0.1%

- SMIC [981.HK]: Raises Q3 Rev +14-16% q/q (prior 1-3%), cites changes in product mix and increase in 'other operating income'

- Sinopharm [1099.HK]: Publishes phase 1 /2 Coronavirus vaccine study results in Lancet

- China Merchant Securities [6099.HK]: Said to be closing its London Commodities brokerage after business review – Press

- (CN) China Commerce Ministry (MOFCOM): will impose temporary anti-dumping deposits on US and Japan Polyphenylene Sulfide; The deposits for the US companies equal over 214%

- (CN) China: Qingdao coronavirus outbreak 'unlikely' to expand; Outbreak originated from a hospital

- (CN) China CSRC (securities regulator): China is seeking registration based system for all IPOs

- (CN) China PBOC sets Yuan reference rate: 6.7332 v 6.7374 prior

- (CN) China PBoC Open Market Operation (OMO): Injects CNY50B in 7-day reverse repos v Injects CNY50B in 7-day reverse repos prior; Net inject CNY50B v Net inject CNY50B prior

Japan

- Nikkei225 opened -0.1%

- (JP) Japan Fin MIn Aso: Confirms use of ¥549B from budget reserves for jobs and supply chain support

- (JP) Japan Transport Min: Japan will lower airport landing fees by 45% for domestic flights for fall [vs speculation of 50% cut]

Korea

- Kospi opened +0.1%

- (KR) Bank of Korea (BOK) Gov Lee: USD/KRW rate has been on steady downward trend since May; financial and FX markets are moving stably

- *(KR) SOUTH KOREA SEPT UNEMPLOYMENT RATE: 3.9% V 3.7%E

- (KR) South Korea Sells KRW764B in 50-year bonds: Avg yield: 1.670% v 1.610% prior

- SK Telecom [017670.KR]: Signs Mobility agreement with Uber (as speculated)

Other Asia

- *(SG) SINGAPORE SEPT NON-OIL DOMESTIC EXPORTS M/M: -11.3% V -4.4%E; Y/Y: 5.9% V 11.5%E; Pharmaceutical exports -27.3% y/y

- (TW) Taiwan to allow Foreign Investors to use FX for collateral for stocks, effective immediately; the rule will not allow foreign investors to exchange the collateral for Taiwan dollars

North America

- (US) Pres Trump: would raise stimulus bill offer to more than $1T, agrees he would go higher than $1.8T - Fox Business interview

- (US) Treasury Sec Mnuchin: Pres Trump is determined to work on a 'larger stimulus deal'; Trump and I are committed to keep working toward a deal

- (US) Sen Maj Leader McConnell: rejects 'higher amount' for coronavirus stimulus package; planned $500B is appropriate

- (US) Speaker Pelosi spokesperson: Mnuchin says Trump would 'weigh in' with Leader McConnell should an agreement be reached

- (US) President Trump: Republicans will back a stimulus if there is an agreement - Town Hall

- (US) Presidential Candidate Biden: Regeneron Drug is a useful tool but there is no distribution plan; Would stop tax breaks and subsidies for oil companies

- Blackstone Group [BX]: Reaches agreement to sell BioMed Realty for $14.6B to group of existing BioMed Investors [BioMed is the largest private owner of life science office buildings in the United States]

Europe

-Daimler [DAI.DE]: Reports prelim Q3 adj EBIT €3.48B v €2.50Be; Cited a faster than expected market recovery and a "particularly strong September performance"

Levels as of 1:20 ET

- Nikkei 225, -0.4%, ASX 200 -0.5% , Hang Seng +0.8%; Shanghai Composite -0.1% ; Kospi -1.1%

- Equity S&P500 Futures: flat; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 +0.8%

- EUR 1.1715-1.1700 ; JPY 105.46-105.19 ; AUD 0.7099-0.7069 ;NZD 0.6607-0.6587

- Gold flat at $1,909/oz; Crude Oil -1% at $40.56/brl; Copper -0.1% at $3.0802/lb

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