RBNZ statement in line with analysts’ expectations

Asia Market Update: Equities track US declines, Hang Seng underperforms amid broad-based selling; RBNZ statement in line with analysts’ expectations

General Trend:

- US equity markets ended lower amid focus on Trump’s UN comments and political concerns in the US

- US Sept Consumer Confidence missed ests amid trade concerns

- Small-caps and tech shares weigh on Shanghai Composite, PBOC continues to leave money market rates unchanged

- Softbank drops over 2% in Japan after the recent focus on Wework and plans for new Vision Fund.

- Japanese automakers decline in the face of uncertainty about US/Japan trade agreement

- Nike rises over 5% in afterhours trading, reported Q1 results above ests

- On Tuesday RBA Gov Lowe said feels no pressure from the pricing of financial markets [Big Aussie banks are calling for easing at Oct 1st rate decision]

- Japan had multi-year low BTC at 40-year JGB auction, follows Kuroda’s comments on super-long JGB yields

- PBoC to sell CNY10B in central bank bills in Hong Kong on Sept 26 (Thursday)

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened -0.2%

- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.00%; AS EXPECTED

- (AU) Reserve Bank of Australia (RBA) Gov Lowe: reiterates extended period of low rates is likely needed; may well need to cut interest rate further; Will not comment on market pricing for October for rate move - speech in Armidale last night after the close

- (NZ) New Zealand Aug Trade Balance (NZ$): -1.56B v -1.4Be; Exports: 4.1B v 4.1Be; Imports: 5.7B v 5.6Be; Trade Balance (12-month YTD): -5.5B v -5.4Be

- SCP.AU CEO: See FY20 FFO A$0.167/unit, modest growth; expect to bring specialty occupancy back within our preferred range within the next 12-18 months – AGM

- MGX.AU Total Mineral Resources are estimated at 74.2 million tonnes (Mt) of iron ore at an average grade of 61.8% Fe; reductions in the estimates from a year ago reflect mining depletion

- (AU) Australia sells A$800M v A$800M indicated in 2030 bonds; avg yield 0.9438% v 1.1494% prior; bid to cover 2.53x v 3.11x prior

Japan

- Nikkei 225 opened -0.6%

- (JP) Bank of Japan (BOJ) member Masai: BOJ will not hesitate to take additional easing measures if there is greater possibility that momentum toward reaching price stability target

- (JP) Japan planning to put US auto tariff removal in trade deal – Nikkei; earlier: Japan and the US said to fail to reach agreement on US tariff removal timeline

- (JP) Bank of Japan (BOJ) minutes from July policy meeting (two meetings ago): members shared the recognition that downside risks to economic activity and prices warranted attention, and that, although it would take time to achieve 2% price stability target it was appropriate to persistently continue with the current powerful monetary easing

- (JP) Japan Aug PPI Services Y/Y: 0.6% v 0.5%e

- Japan Exchange, 8697.JP Cuts FY19 Net ¥42B (prior ¥46B); Op ¥60B (prior ¥66B); completes tender offer of Tokyo Commodity Exchange

- (JP) Japan MoF sells ¥400B v ¥400B indicated in 0.50% 40-year JGBs, highest accepted yield 0.435% v 0.425% prior, bid to cover: 2.69x v 3.02x prior (btc fresh multi-year low)

Korea

- Kospi opened -0.4%

- (KR) Pres Trump: North Korea must denuclearize; US does not want endless wars - UN

-005380.KR Moody's: Plan to form $4.0B JV with Ireland's autonomous vehicle startup Aptiv Plc is credit positive

China/Hong Kong

- Hang Seng opened -0.5%; Shanghai Composite opened -0.3%

- (CN) China Q3 Beige Book: China's economic performance during Q3 was the weakest thus far for 2019 driven by manufacturing

- (CN) China Foreign Min Wang Yi: US-China relations have come to a crossroads; beneficial cooperation is only right option for China and US; US and China have both benefited from cooperation over past 40 years; higher tariffs have reduced competitiveness of US firms and farmers and manufacturers have felt mounting pressures; trade war has inflicted losses on both sides

- (CN) China PBOC sets Yuan Reference Rate: 7.0724 v 7.0729 prior

- (CN) China PBoC Open Market Operation (OMO): Injects CNY20B in 14-day reverse repos v CNY40B prior in 14-day; Net drains CNY10B v CNY40B injected prior

- (CN) China National Development and Reform Commission (NDRC) and Ministry of Finance: The Customs Tariff Commission of the State Council will continue to exclude soybeans, pork and other agricultural products from the additional tariffs on US goods – Xinhua

North America

- (US) House Speaker Pelosi: Trump Administration's effort to block release of whistleblower report was a violation of the law; Pres Trump's actions are serious violations of the Constitution, starts impeachment inquiry into President Trump

-(US) Pres Trump: the future belongs to patriots, not to globalists; China has not adopted promised reforms - UN General Assembly

Europe

-(UK) Min Rees-Mogg said to have called Supreme Court judgement on suspending parliament a coup - press

-AIR.FR Reportedly US considering rotating tariffs on the EU in its WTO dispute between Airbus and Boeing - press

Levels as of 1:20 ET

- Nikkei 225, -0.4%, ASX 200 -0.5%, Hang Seng -1%; Shanghai Composite -0.6%; Kospi -0.9%

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

- EUR 1.1024-1.0998 ; JPY 107.42-106.97 ; AUD 0.6804-0.6778 ;NZD 0.6349-0.6301

- Gold -0.2% at $1,537/oz; Crude Oil -0.6% at $56.95/brl; Copper +0.2% at $2.607/lb