RBA Gov Lowe and Oct Minutes more upbeat while monitoring housing

Asia Mid-Session Market Update: RBA Gov Lowe and Oct Minutes more upbeat while monitoring housing; New Zealand CPI tops forecasts

US Session Highlights

- (US) OCT EMPIRE MANUFACTURING: -6.80 V +1.00E; prices paid highest since 2014

- (US) SEPT INDUSTRIAL PRODUCTION M/M: 0.1% V 0.2%E; CAPACITY UTILIZATION: 75.4% V 75.6%E

- (US) Fed Vice Chair Fischer: low rates make the economy more vulnerable to shocks; global factors are contributing to depressing US interest rates - comments in NY

- Hasbro shares shine after Q3 results and positive 'Star Wars' outlook

- WHR: Association of Home Appliance Manufacturers (AHAM) reports Sept US shipments of major home appliances +5% y/y - press

US markets on close: Dow -0.3%, S&P500 -0.3%, Nasdaq -0.3%

- Best Sector in S&P500: Utilities

- Worst Sector in S&P500: Services

- Biggest gainers: HAS +7.4%, VMC +2.6%, NEM +2.4%, ILMN +2.3%, FE +2.3%

- Biggest losers: SWN -3.3%, CHK -3.3%, HPQ -3.1%, DVN -3.0%, WDC -3.0%

- At the close: VIX 16.21 (+0.1pts); Treasuries: 2-yr 0.82% (-2bp), 10-yr 1.76% (-3bp), 30-yr 2.52% (-4bp)

US movers afterhours

- NFLX +19.7%: Reports Q3 $0.12 v $0.06e, R$2.29B v $2.28Be

- TACO +8.9%: Reports Q3 $0.13 v $0.12e, R$104.4M v $101Me

- SPLS +1.6%: Said to be in talks with Cerberus about European operations (about 200 stores) - financial press

- F +0.1%: Plans shutdown at four plants in next weeks to align production with demand and inventory goals - press

- V -1.0%: Announces CEO Succession plan effective December 1, 2016

- IBM -3.0%: Reports Q3 $3.29 v $3.21e, R$19.2B v $19.0Be

Asia Session Notable Observations, Speakers and Press

- RBA Gov Lowe spoke at Citi's annual Australia Investment Conference, reiterating RBA is monitoring employment and financial stability for impact from prior rates; Also hints next week's quarterly CPI will be closely watched for progress on returning to 2-3% target. Recall the Q2 y/y CPI was a multi-year low of 1%. Lowe also views full employment threshold to be around 5% - below 5.6% most recent figure.

- RBA Oct meeting minutes offer few forward looking policy details, reiterating there's considerable uncertainty in labor and housing markets. Recall the property sector received some added attention in the Oct decision for signs of imbalances amid extra-low period of interest rates, as RBA acknowledged greater caution for lending, decline in turnover, slowing rate of appreciation, and growth in rents being the smallest in decades.

- New Zealand Q3 CPI at 0.2% on both q/q and y/y basis tops forecasts; Annual inflation saw tradeable prices fall over 2%, though housing inflation was up over 6%; Annualized CPI has now been below 1-3% target range for 2 years, but the slight beat reduces probability of another RBNZ rate cut in Nov by about 5pts to just under 80%.

- China Commerce ministry upbeat that trade conditions can stabilize despite gloomy global environment; Recall China Sept trade surplus fell to a 6-month low and exports contracted by 10% - the biggest decline in 7 months

- USD under pressure as US Treasury yields come in; Technical factors of preserved trendlines in the DXY and the 10-year cited.

- Netflix spikes about 20% afterhours on much stronger Q3 results and guidance, as total streaming adds of 3.57M exceeded 2.3M forecast; IBM down about 3% despite the beat on top and bottom line as gross margins shrink 200bps amid the shift to cloud computing.

Asia Key economic data:

- (NZ) NEW ZEALAND Q3 CPI Q/Q: 0.2% V 0.0%E; Y/Y: 0.2% (below target range for 2 years, 3-quarter low) V 0.1%E

- (AU) AUSTRALIA SEPT NEW MOTOR VEHICLE SALES M/M: 2.5% v 0.1% PRIOR; Y/Y: 0.8% v 2.8% PRIOR

Asian Equity Markets (23:30ET)

- Nikkei +0.1%, Hang Seng +0.8%, Shanghai Composite +0.5%, ASX200 +0.4%, Kospi +0.3%

FX ranges/Commodities/Futures/Fixed Income (23:30ET):

- EUR 1.0995-1.1025; JPY 103.70-103.90; AUD 0.7625-0.7675; NZD 0.7130-0.7190

- Dec Gold +0.3% at 1,260/oz; Crude Oil +0.6% at $50.25/brl; Copper +0.4% at $2.11/lb

- GLD: SPDR Gold Trust ETF daily holdings rise 1.8 tonnes to 967.2 tonnes; highest since Aug 13th (4th straight increase)

- Equity Futures: S&P e-mini +0.3%, Dax +0.3%, FTSE100 +0.1%

- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.7303 V 6.7379 PRIOR

- (CN) PBOC to inject CNY40B in 7-day reverse repos and CNY40B in 14-day reverse repos

- (AU) Australia MoF (AOFM) sells A$100M in 1.25% 2040 Bonds; avg yield: 0.7169%; bid-to-cover: 2.91x

Asia movers

Notable movers by sector:

- Consumer discretionary: Chow Tai Fook Jewellery Group 1929.HK

-1.5% (Q2 result); Toho Co 9602.JP -2.4% (raises guidance); Crown Resorts CWN.AU +2.3% (Deutsche Bank raised to Buy)

- Consumer staples: Daio Paper Corp 3880.JP +1.5% (H1 result speculation); Woolworths WOW.AU +0.4% (Caltex confirms interest in petrol stations business), CTX -3.6%

- Financials: Challenger Financial Services Group CGF.AU +6.7% (Q1 result)

- Industrials: Guangzhou Automobile Group 2238.HK +0.2% (Sept result); Honda Motor Co. 7267.JP -0.1% (new assembly plant in China); Aurizon Holdings AZJ.AU -1.8% (affirms guidance)

- Technology: Sharp Corp 6753.JP +1.4% (health venture speculation)

- Materials: Regis Resources RRL.AU +4.1% (upgraded to buy from hold at Bell Potter); Whitehaven Coal WHC.AU -0.3% (Credit Suisse cuts to underperform); Formosa Petrochemical Corp. 6505.TW -1.0% (Nomura cuts to neutral)

- Energy: China Coal Energy 1898.HK +1.4% (Sept result); Oil Search OSH.AU +1.4% (Q3 result)

- Healthcare: Sonic Healthcare SHL.AU +1.0% (affirms guidance); AWE AWE.AU -2.4% (affirms guidance)