RBNZ's McDermott reiterates expects to ease again

Asia Mid-Session Market Update: Equity markets mixed with broad dollar strength across the region, Fed's Evans reiterates Dec rate hike could be fine; RBNZ's McDermott reiterates expects to ease again

Asia Session Notable Observations, Speakers and Press

- Markets in the region generally opened higher, before tech names got dragged lower on Samsung Electronics (-7%) after they halted mobile providers from selling or exchanging the Galaxy Note 7 due to continued issues. Residual effects were felt in the Taiex -0.6%, with many of its major firms acting as suppliers to Samsung. There was broad dollar strength against the currencies of the region, most notable AUD/USD (-0.75%) and NZD/USD (-1.0%).

- Fed's Evans (dove, non-voter) speaking in Sydney said even with a "very shallow path" of interest rate increases, inflation won't rise to 2% target until 2020; comfortable with a December rate hike

- Goldman Sachs noted China FX outflows may be worse than reported; More capital is leaving in CNY rather than USD, which a report from Chinabond.com said that China govt bond holdings by foreign investors reaches record high.

- China Premier Li comments the global economic recovery is slow but debt risks are under control. Noted leverage outside of financial sector is high, but is confident of reaching economic goals this year.

- RBNZ Assistant Gov McDermott reiterated policy will continue to be accommodative; current projects indicate further policy easing will be required, NZD/USD fell to 0.7089

- UK press reported that the UK Treasury reportedly may lose £66B/year under a 'Hard Brexit' scenario, GBP/USD tested 1.2302

 

US Session Highlights

- Thin US Columbus Day markets calibrate to developments in US Presidential race

- (US) NBC/Wall Street Journal poll: Hillary Clinton leads Donald Trump by 46%-35% margin in 4-way ballot; Mexican Peso surged 3% against the Greenback and continues to be seen as a barometer for the November election.

- TWTR: Reportedly Salesforce still considering making a "lowball" offer for Twitter, despite shareholder opposition - press

- FANG: Reports Q3 production 44.9K boe/d, +22% q/q; Raises FY16 prod outlook

- Oil producers are set to meet in Turkey on Wednesday, and once again there was no shortfall of jawboning by officials arriving ahead of the meetings.

- (GR) Reportedly Eurozone ministers agree to disburse €1.1B to Greece now, delay the remaining €1.7B to a later date

 

US Markets on Close: Dow +0.5%, S&P500 +0.5%, Nasdaq +0.7%

- Best Sector in S&P500: Energy

- Worst Sector in S&P500: Industrials

- Biggest gainers: TSRO +18.8%, HDP +13.4%, MYL +8.2%, CRM +5.9%, AGCO +3.7%

- Biggest losers: TWTR -11.5%, BMY -10.1%, HVT -9.4%, DOV -7.7%, COG -2.5%

VIX 13.38 (-0.1pts); Treasuries: 2-yr 0.87% (+2bp), 10-yr 1.72% (-1bp), 30-yr 2.45% (-1bp)

 

US Movers Afterhours

- ILMN: Reports prelim Q3 R$607M v $628Me (prior guidance $625-630M), Guides Q4 Rev flat to slightly up q/q (implies ~$607M v $682Me); -24.3% after hours

- TMO -2.3%; PACB, -6.4% afterhours (on ILMN guidance)

- RDUS Shire said to be close to multi-billion dollar takeover - financial press, +5.8% after hours

- CLDT: Cuts Q3 AFFO $0.70-0.71 v $0.75e, adj EBITDA $37-37.5M (prior $0.72-0.75, $38-39.5M); -4.5% after hours

- EARS: To announce Keyzilen program update and host conference call and webcast October 11th , +4.9% after hours

- LC: Wedbush initiates with Underperform rating and $3.75 price target, -2.2% after hours

- YHOO: Verizon CEO still sees real value in Yahoo, says merger still makes sense - CNBC, +0.5% after hours

 

Equity Futures (00:00ET): S&P e-mini -0.2%, Dax -0.2%, FTSE100 -0.4%

FX ranges/ Fixed Income/Commodities (00:00ET):

- EUR 1.1142-1.1119; JPY 103.99-103.610; AUD 0.7609-0.7543, NZD 0.7142-0.7062

- Dec Gold 0.02% at 1,260/oz; Crude Oil -0.2% at $51.78/brl; Copper -0.1% at $2.19/lb

- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.7098 V 6.7008 PRIOR (lowest level since Sept 2010)

- (CN) PBOC to inject CNY20B in 7-day reverse repos and CNY10B in 14-day reverse repos

 

Asian Equity Markets (00:00ET)

- Nikkei +0.9%, Hang Seng -1.1%, Shanghai Composite +0.4%, ASX +0.6%, Kospi -1.2%

Key Economic Data:

- (NZ) NEW ZEALAND SEPT CARD SPENDING M/M: 1.9% (10-year high) V 0.8%E; TOTAL M/M: +2.0% V -1.1% PRIOR

- (UK) SEPT BRC LFL SALES VALUE Y/Y: +0.4% V -0.3%E

- (JP) JAPAN AUG CURRENT ACCOUNT BALANCE: ¥2.00T V ¥1.50TE; ADJUSTED CURRENT ACCOUNT: ¥1.98T V ¥1.57TE; TRADE BALANCE: ¥243B V ¥117BE

- (AU) AUSTRALIA SEPT NAB BUSINESS CONFIDENCE: 6 V 6 PRIOR; CONDITIONS: 8 V 7 PRIOR

- (AU) AUSTRALIA AUG HOME LOANS M/M: -3.0% V -1.5%E

- (AU) Australia Q3 CBA/HIA Housing Affordability: 81.8 v 81.7 prior

 

Asia Movers

- Consumer discretionary: Skyworth Digital 751.HK -3.5% (Sept result); Intime Department Store Group Co 1833.HK -0.75% (Sept result); Shimachu Co 8184.JP +5.8% (annual result)

- Financials: Evergrande Real Estate Group 3333.HK -2.3% (Sept result); China Merchants Land 978.HK -0.8% (guidance); Sunac China Holdings 1918.HK -3.7% (Sept result); China Vanke Co 000002.CN +3.0% (Sept result)

- Industrials: Geely Automobile Holdings 175.HK +4.7% (Sept result); Great Wall Motor 2333.HK +2.2% (Sept result); Takata Corp.7312.JP -8.0% (chapter 11 filing for TK Holding speculation); WorleyParsons WOR.AU +5.9% (oil trades near 16-month high)

- Technology: Samsung Electronics 005930.KR -6.7% (request to stop sales and exchanges of Note 7)

- Materials: Sinopec Yizheng Chemical Fibre Co 1033.HK -3.6% (guidance); Sakata Seed Corp 1377.JP +6.9% (Q1 result); Hills Ltd HIL.AU +1.7% (agreement with Woolworths ends)

- Energy: Ausdrill ASL.AU +0.2% (guidance); Santos STO.AU +4.1%, Beach Energy BPT.AU +3.1%, Inpex 1605.JP +3.4% (oil trades near 16-month high)

- Healthcare: Sirtex Medical SRX.AU -1.7% (UBS cuts PT