Stimulus-induced equity rally continues in China

General trend

- Shanghai Stock Exchange is experiencing delays, confirmed abnormal and slow transactions in stock auctions since market opened.

- Asian equities trade mixed overall.

- China 10-year and 30-year government bond yields extend rise (**Reminder Sept 26th: (CN) China said to issue CNY2T (~$284B) of sovereign debt as part of new fiscal stimulus - press [**Note: China’s 2008-09 economic stimulus plan has been estimated at CNY4.0T]).

- China industrial profits collapsed in Aug.

- PBOC set Yuan reference rate:7.0101 v 7.0354 prior [ China PBOC was expected to set yuan mid-point at 7.0093 (prior CNY fix was 7.0354 ) - financial press poll].

- CNH declines after recent gains.

- Nikkei 225 rises ahead of LDP leadership election.

- USD/JPY: Trades at 3-week high.

- (JP) Reminder: Japan is holding the ruling Liberal Democratic Party (LDP) leadership election on Sept 27th.

- LDP Leadership race moves into runoff between Takaichi and Ishiba; Economic Security Min Takaichi receives 181 votes, short of majority (said to be an advocate for easing policy) [Reminder on Sept 9th: (JP) Japan Security Min Takaichi: Cannot say Japan has stably achieved BOJ's 2% inflation target].

Headlines/economic data

Australia/New Zealand

-ASX 200 opens +0.2% at 8,223.

-Australia Treasurer Chalmers: Agreed to cooperate further with China on investment, trade and decarbonization (**Reminder Aug 26th: (AU) Australia Treasurer Chalmers could visit China ‘within weeks in early Sept’[would be the first such trip to China in 7 years] – AFR [**Note: China is Australia's largest trade partner]).

-Australia sells A$500M v A$500M indicated in 2.25% May 2028 Bonds; Avg Yield: 3.5038%; bid-to-cover: 3.54x.

- New Zealand Sept ANZ Consumer Confidence: 95.1 v 92.2 prior.

China/Hong Kong

- Hang Seng opens +2.6% at 20.446.

- Shanghai Composite opens +1.6% at 3,049.

-China said to issue CNY2T (~$284B) of sovereign debt as part of new fiscal stimulus - press [**Note: China’s 2008-09 economic stimulus plan has been estimated at CNY4.0T].

-(CN) PBOC cuts 14-day reverse repo rate by 20BPS to 1.65% from 1.85%.

-(CN) China PBOC: Previously announced RRR cut effective from Sept 27th [FRI]; the weighted average RRR for financial institutions is now at 6.60%; The new 7-day reverse repo rate is also effective from Sept 27th.

- China PBOC sets Yuan reference rate:7.0101 v 7.0354 prior.

- China PBOC Open Market Operation (OMO): Sells CNY333B in 14-day Reverse Repos: Net drains CNY238.9B v drains CNY231.6B prior.

-China Aug Industrial Profits Y/Y: -17.8% v 4.1% prior.

-CIFI Holdings [884.HK]: Has entered into a restructuring support agreement (the ‘‘RSA’’) with the members of the AHG.

-(CN) US Treasury Official Shambaugh: Not sure if Sec Yellen will meet again with He Lifeng.

Japan

- Nikkei 225 opens +0.5% at 39,108 [**Reminder Sept 23rd: (JP) Japan investors were required to buy stocks by Sept 26th [Thurs] in order to have dividend rights - Nikkei].

- Japan Sept Tokyo CPI Y/Y: 2.2% V 2.2%E; CPI (ex-fresh food) Y/Y: 2.0% V 2.0%E; CPI (ex-fresh food and energy) Y/Y: 1.6% v 1.6%e.

- Japan releases weekly flows data [period ended Sept 20th]: Foreign buying of Japan equities: -¥1.93T v -¥3.0T prior ; Japan buying of foreign bonds: +¥774.0B v +¥2.10T prior.

- (JP) Japan Final July Leading Index CI: 109.3 v 109.5 prelim; Coincident Index: 117.2 v 117.1 prelim.

- Japan sells 3-Month Bills; Avg Yield: 0.0047% v 0.0498% prior; bid- to-cover: 2.71x v 3.50x prior.

- LDP VP Aso to vote for Takaichi in an election runoff – Japanese press.

-Japan Fin Min Suzuki: Affirms support for Kamikawa in LDP leadership race.

-Toyota Motor [7203.JP]: Reports Aug global sales at 888.7K units, -3.7% y/y; Global production at 808.0K units; -12.6% y/y.

Korea

-Kospi opens +0.1% at 2,674.

-Samsung: Expects global HBM demand to double in 2025; cites unnamed industry sources - South Korea press.

North America

-(US) Fed's Cook (voter): Upside risks to inflation have diminished while downside risks to employment have increased; Rate cut reflected growing confidence.

-(US) Initial jobless claims: 218K V 223KE (lowest since end-May); continuing claims: 1.834M V 1.83ME.

-(US) Q2 final GDP annualized Q/Q: 3.0% V 2.9%E; personal consumption: 2.8% V 2.9%E.

-(US) NHC: Helene makes landfall as a Category 4 Hurricane in the Florida Big Bend; Weakening is expected after Helene moves inland.

-Intel [INTC] Reportedly Arm Holdings made high-level approach about possible deal, which Intel declined; Arm remains interested in Intel Product Group, not the factory division - press [Reminder: 08/13 ARM Intel dissolves 1.18M share stake in Arm Holdings during Q2 - filing].

-Intel [INTC]: Intel and US 'race' to finalize $8.5B in CHIPS funding by the end of 2024 - FT.

Levels as of 01:20 ET

- Nikkei 225, +1.7%, ASX 200 +0.1% , Hang Seng +3.7%; Shanghai Composite +2.6% ; Kospi -0.3%.

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

- EUR 1.1178-1.1162 ; JPY 146.23-144.75 ; AUD 0.6899-0.6871 ;NZD 0.6336-0.6300.

- Gold -0.1% at $2,693/oz; Crude Oil -0.1% at $67.60/brl; Copper +0.1% at $4.6500/lb.