Asia Mid-Session Market Update: Japan manufacturing PMI returns to expansion as cabinet officials resume jawboning against Yen strength

 

Top US session headlines

- (US) AUG EXISTING HOME SALES: 5.33M V 5.45ME

- (US) INITIAL JOBLESS CLAIMS: 252K V 261KE; CONTINUING CLAIMS: 2.11M V 2.14ME (lowest initial jobless claims since April)

- Reportedly no breakthrough reached at OPEC meeting in Vienna ahead of meeting in Algeria next week - press

- (US) TREASURY $11B 10-YEAR TIPS REOPENING DRAW 0.052%; BID TO COVER 2.59 V 2.27 PRIOR AND 2.38 AVG OVER THE LAST 4 (highest BTC since May 2014)

- YHOO: Confirms certain data from 500M user accounts was stolen, including hashed passwords, names and email addresses

 

Asia Notes/Observations

- Volatility is compressed for the 2nd day and US yield curve flattens as markets process FOMC ripple and settle on 50-50 chance of December hike.

- Nikkei returns from holiday with a down day amid catch-up to Yen bid on BOJ policy change

- Oil pares gains on diminished prospects of Algiers agreement for any supply shift

- NZD still under pressure in the extended wake of more dovish than expected RBNZ; other USD majors in narrow ranges

- Japan PMI surprises to the upside with first expansion in 7 months; Output up for 2nd month and Employment rises to 4-month highs

- Japan Fin Min acknowledges not much impact anticipated from latest BOJ move; Cabinet Sec Suga warns govt watching market moves and Yen direction following BOJ and FOMC

- North Korea Army spokesperson threatens to strike Guam and Seoul if US flies its B-1B bombers over Korea

 

US markets on close: Dow +0.5%, S&P500 +0.7%, Nasdaq +0.8%

- Best Sector in S&P500: Consumer Discretionary

- Worst Sector in S&P500: Basic Materials

- Biggest gainers: WY +5.7%, RIG +5.6%, DISCA +4.8%, FTR +4.8%, RCL +4.6%

- Biggest losers: EQR -2.5%, SWN -2.3%, LVLT -2.1%, KSS -1.9%, PXD -1.8%

 

VIX 12.0 (-1.3pts); Treasuries: 2-yr 0.77% (-1bp), 10-yr 1.63% (-4bp), 30-yr 2.35% (-4bp)

US movers afterhours

- MIFI +29.8%; Pact to Sell Mobile Broadband Unit

- BATS +28.5%; CBOE reportedly in discussions to acquire BATS Global - press

- IMPV +16.4%; Said to Draw Acquisition Interest

- AIR +4.8%; 1Q EPS Cont. Operations, Sales Beat Ests.

- FB -1.4%; Said to have overestimated video ads' viewing time by as much as 60-80% for 2 years - financial press

- ENPH -21.0%; Will Cut 11% of Workforce, Offer Stock

 

After extended session

- GM: Chevrolet to begin offering all-new Equinox SUV model in China - financial press

 

Equity Futures (23:30ET): S&P e-mini flat, Dax flat, FTSE100 -0.1%

FX/Commodities (23:30ET):

- EUR 1.1195-1.1210; JPY 100.70-101.25; AUD 0.7630-0.7650, NZD 0.7275-0.7315

- Gold -0.2% at 1,338; Oil -1.1% at $45.81/brl; Copper -0.2% at $2.19/lb

- GLD: SPDR Gold Trust ETF daily holdings rise 6.5 tonnes to 950.9 tonnes; Highest since Sept 7th

 

Asian Equity Markets (23:30ET)

- Nikkei -0.1%, Hang Seng +0.1%, ASX +0.7%, Shanghai -0.1%, Kospi +0.1%

 

Key economic data:

- (JP) JAPAN SEPT PRELIMINARY PMI MANUFACTURING: 50.3 V 49.5 PRIOR; first expansion in 7 months

- (HK) Macau Aug visitor arrivals: 2.88M, +3.1% y/y

 

Speakers/Press

China:

- (CN) Former China vice housing minister Qiu Baoxing warns about risk of overheating property sector - Chinese press

- (CN) Moody's: China developers will have stable margins in 2016 v 2015

- (CN) China State Administration of Foreign Exchange (SAFE) official: No basis for long term Yuan depreciation - financial press

Japan:

- (JP) Japan Chief Cabinet Sec Suga: Will continue to watch market moves, fx moves are very sensitive

- (JP) Japan Fin Min Aso: Reiterates Govt and BOJ need to work together on many issues; deflation is the main problem for the economy

- (JP) Japan Business Federation (Keidanren) chief Sakakibara met with China's Commerce Ministry, urging more transparent antitrust process - Nikkei

 

Asia movers

- China Unicom 762.HK +5.0%; Raised at Goldman Sachs

- Iluka Resources ILU.AU +4.8%; raised to buy from neutral at UBS

- Qube Holdings QUB.AU +4.6%; upgraded to outperform at Macquarie

- Warehouse Groupd WHS.NZ +1.4%: Reports FY16 adj net NZ$64.1M v NZ$57.1M y/y, Rev NZ$2.95B v NZ$2.78B y/y

- Gold miners trade lower on gold prices; Newcrest NCM.AU -2.8%, Evolution Mining EVN.AU -2.6%

- Wynn Macau -3.7%, MGM China -3.0% cut at Credit Suisse

- Dentsu 4324.JP -4.6%: Confirms issues with improper accounting in internet ads, apologizes to customers

- Charter Hall CHC.AU -6.6%; Halt lifted after Gandel Group block sale

- Whitehaven Coal WHC.AU -8.5%; Annual report, CEO pay hike

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Editors’ Picks

EUR/USD clings to 3.5-week’s high, trades above 1.1000 figure

The pair is challenging the 1.1047 resistance. EUR/USD bull recovery from 34-month lows remains intact. Further coronavirus headlines are awaited.

EUR/USD News

GBP/USD hits new 2020 low and bounces amid Brexit rhetoric, coronavirus headlines

GBP/USD is trading above 1.2800 after hitting a new 2020, nearing the 1.2700 figure, as concerns about a no-trade-deal Brexit are weighing on the pound. Modest recovery seen in USD during the American session keeps the bearish pressure intact.

GBP/USD News

USD/JPY hits seven-week lows under 108.00 as markets panic

Flight-to-safety dragged USD/JPY below 108 for the first time since early January on Friday. Although the pair recovered modestly to 108.20, it remains on track to erase more than 300 pips this week.

USD/JPY News

Editors’ Picks

EUR/USD clings to 3.5-week’s high, trades above 1.1000 figure

The pair is challenging the 1.1047 resistance. EUR/USD bull recovery from 34-month lows remains intact. Further coronavirus headlines are awaited.

EUR/USD News

GBP/USD hits new 2020 low and bounces amid Brexit rhetoric, coronavirus headlines

GBP/USD is trading above 1.2800 after hitting a new 2020, nearing the 1.2700 figure, as concerns about a no-trade-deal Brexit are weighing on the pound. Modest recovery seen in USD during the American session keeps the bearish pressure intact.

GBP/USD News

USD/JPY hits seven-week lows under 108.00 as markets panic

Flight-to-safety dragged USD/JPY below 108 for the first time since early January on Friday. Although the pair recovered modestly to 108.20, it remains on track to erase more than 300 pips this week.

USD/JPY News

Crypto summer will be back in the next spring

The attention of the financial world is right now on the equity segment. The force with which prices are moving down is extraordinary, with terrifying technical details such as a close below 3000 points on the S&P 500… 100 points down!

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XAU/USD tumbles near two-week’s lows, sub-$1600/oz

Gold has been dropping sharply this Friday while reaching the 200 SMA on the four-hour chart. XAU/USD bulls gave up as sellers took the market down sharply. The bears seem to be in charge and more down could potentially be expected. 

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