Asian Market Update: Stocks decline after losses on Wall St.; CN Markets Lower Despite Generally Better Data, Bond Yields; US stock FUTs extend declines, FedEx forecast weighs.
General trend
– Yuan the currency weakens to test the 7.00 level (first time since July 2020) [China papers are downplaying the concerns of CNY weakening past 7 against the USD].
– Will the PBOC cut prime lending rates next week amid better data and yuan weakness? [PBOC normally sets the LPRs around the 20th of the month (Tues)].
– USD trading is mixed.
– The 2-year UST yield prolongs the rise.
– AU and NZ yields also increase [analysts revise RBA and RBNZ rate forecasts].
– RBA Government Lowe said: Inflation can also come from profit margins; Rates are still too low right now; See some rate hikes in the coming months; At the next board meeting, we will discuss a rate increase of 25 basis points from 50 basis points.
– Delay in Australian stocks [Energy, REIT and Resources indices underperform].
– Shanghai property index lags amid weaker data [(CN) China Aug YTD property investment Y/Y: -7.4% V -7.0%E].
– The Shanghai Financials index also falls [China said to order reduction in brokerage fees].
– UK retail sales expected later in the day.
Securities/economic data
Australia/New Zealand
– The ASX 200 opened -0.3%.
– (AU) RBA Gov Lowe: Well-anchored medium-term inflation expectations; Rate increases are larger and faster than expected; The board expects further increases will be needed to bring inflation back to target; not on a predefined path – testimony in parliament.
– (NZ) New Zealand manufacturing PMI in August: 54.9 vs. 53.5 previously (13th consecutive expansion).
– (NZ) New Zealand Aug Non-Resident Bond Holdings: 58.4% vs. 58.6% previously.
– (AU)NAB expects the RBA to hike rates by 50 basis points to 2.85% in October from 25 basis points previously.
– (NZ) ANZ Bank expects OCR to peak at 4.75% by May 2023.
Japan
– Nikkei 225 opened -0.9%.
– (JP) The Bank of Japan (BOJ) is offering to buy 5 to 10 year JGBs at a fixed rate of 25 basis points; Opens a window to buy unlimited 10-year JGBs at 0.25% [as expected].
– (JP) Japan Fin Min Suzuki: if sudden movements of the yen exist, will take the necessary measures without excluding any option; Reiterating previous comments that sharp FX moves are undesirable, it is important that FX moves follow fundamentals.
– (JP) Japan to investigate global investment banks in structured bond crackdown – press.
Korea
– Kospi opened -0.6%.
– (KR) Unemployment rate in August in South Korea: 2.5% against 3.0%e (the lowest since the data recorded in June 1999).
– (KR) South Korea Y/Y August Export Price Index: 13.4% vs. 16.3% prior; Y/Y import price index: 22.9% vs. 27.9% before.
– (KR) South Korea July Money supply M2 M/M: 0.3% vs. 0.3% before.
China/Hong Kong
– Hang Seng opened -1.0%; Shanghai Composite opened -0.3%.
– (CN) The Chinese PBOC sets the reference rate for the yuan: 6.9305 against 6.9101 previously.
– *(CN) New housing prices in August in China M/M: -0.3% V -0.1% before (12th consecutive drop); Y/Y: -1.3% V -0.9% forward.
– (CN) Said China’s local government finance companies have embarked on a land-buying spree – China Press.
– (CN) China Financial News: China’s LPR rate in September is unlikely to change.
– (CN) Chinese newspapers play down concerns about the CNY weakening beyond 7 against the USD.
– (CN) said China will test onshore USD/CNY trading extension from September 16 [Fri] – Hurry.
– (CN) China PBOC Open Market Operation (OMO): sells CNY 2.0 billion in 7-day reverse repos against CNY 2.0 billion previously; Net CNY0B against Net CNY0B before.
– (CN) Industrial production in August in China Y/Y: 4.2% V 3.8%E; YTD Y/Y: 3.6%V 3.6%E.
– (CN) Retail sales in August in China Y/Y: 5.4% V 3.2%E; YTD Y/Y: 0.5%V 0.2%E.
– (CN) China August fixed urban assets YTD Y/Y: 5.8% V 5.5%E.
– (CN) August year-to-date residential property sales in China: -30.3% vs. -31.4% previously.
– (CN) China August YTD real estate investment Y/Y: -7.4% V -7.0%E.
– (CN) Unemployment rate surveyed in August in China: 5.3% against 5.4%e.
– (CN) Chinese exchange regulator (SAFE): the CNY is performing much better than other currencies.
– (CN) An official from the National Bureau of Statistics of China (NBS):: to coordinate economic development and control of COVID, will increase demand to keep the economy within a reasonable range.
– (CN) Some banks [including JPMorgan and ICBC Standard Bank] supposed to limit the financing of the Chinese metal – American financial press.
– (HK) Hong Kong Monetary Authority (HKMA) Chief Executive Officer Yue’s opening speech at the 2022 Treasury Markets Summit.
– (CN) Some banks [including JPMorgan and ICBC Standard Bank] supposed to limit the financing of the Chinese metal – American financial press.
– (CN) China’s Ministry of Finance (MOF) is selling 3-month bills and 50-year bonds.
North America
– *(United States) Advance of retail sales in August M/M: +0.3% V -0.1%E; Retail sales (EX-AUTO) M/M: -0.3% V 0.0%E.
– (US) Initial Unemployment Insurance Claims: 213K V 227KE; continuing claims: 1.403MV 1.48ME.
– FDX Cut Q1 $3.44 vs $e5.06, Rev $23.2B vs $23.7B; Removes full-year earnings outlook, amid “global volume slowdown that accelerated in the final weeks of the quarter.”
– (US) Atlanta Fed’s GDPNow: cut Q3 GDP to 0.5% from 1.3% previously.
– UBER Investigate Computer System Breach; Employees instructed not to use internal messaging service and other internal systems – US Press.
– * (US) President Biden announces tentative railroad labor deal [Sept 15th].
Europe
– (EU) EU’s Dombrovskis: Reiterates that sanctions against Russia will remain to exert pressure.
– (RU) Russia Dep PM Novak: I hope we can soon agree with China on gas supply through the Power of Siberia 2 gas pipeline.
Levels starting at 1:20 a.m. ET
– Nikkei 225, -1%, ASX 200 -1.4%, Hang Seng -0.5%; Shanghai Composite -1.2%; Kospi -0.9%.
– S&P500 equity futures: -0.7%; Nasdaq100 -0.9%, Dax -0.9%; FTSE100 -0.3%.
– €1.0012-0.9986; JPY143.55-142.82; AU$0.6724-0.6684; NZ$0.5988-0.5954.
– Gold -0.3% at $1,672/oz; Crude Oil +0.2% to $85.30/brl; Flat copper at $3.4715/lb.
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