Asia market update: More CN property stimulus disappoints; Hot AU jobs; Focus on TSMC Q3 + ECB rate decision + US Sept Retail Sales tonight.
General trend
– China property stock gauges fell between 3-6% in reaction to the joint briefing by the Housing Ministry, MOF and PBOC. In a rather rambling meeting with little focus, the only major measure announced was to expand the white list of property projects to receive bank lending to CNY4T by end-2024 (currently stands at CNY2.3T).
– ASX 200 hit another fresh record high. Australia employment for September was another hot number, and the participation rate also saw a fresh record high. Aussie dollar +0.4% to over 67c again. Australia jobs data affirms RBA comments related no near-term easing [Gov Bullock from Sept 24th: Do not see rate cuts in near-term]. AU 3 yr yields +4.2bps.
– Japan ruling LDP party may lose outright majority at Oct 27th general election for the first time since 2009, in the early election called by new PM Ishiba.
– Japan trade deficit for Sept better than expected, although exports to US and China both down unexpectedly, with overall exports having their first contraction on a y/y basis for first time in 10 months.
– US equity FUTs -0.2% to -0.3% during the Asia session.
Looking ahead (Asian time zone)
– Thu Oct 17th (Thu eve EU Final Sept CPI, ECB rate decision, US Sept Retail Sales).
– Fri Oct 18th JP Sept National CPI, CN GDP/Industrial Prod/Retail Sales/FAI (Fri eve US Sept prelim Building Permits).
Holidays in Asia this week
– Mon Oct 14th Japan, Thailand.
Headlines/economic data
Australia/New Zealand
– ASX 200 +0.6% in early trading at 8,334.
– Australia Sept employment change: 64.1K V +25.0KE; unemployment rate: 4.1% V 4.2%E.
– BHP.AU Reports Q1 Waio Iron Ore Production: 71.6Mt v 71.9Me; Shipments 71.54Mt v 72.0.Mte; On track to meet production guidance; Expects copper demand to increase 70% by 2050; Affirms guidance.
– New Zealand sells total NZ$500M vs. NZ$500M indicated in 2031, 2034 and 2041 bonds.
China/Hong Kong
– Hang Seng opens +0.9% at 20,471; Shanghai Composite opens +0.6% at 3,220.
– China Housing Ministry, MOF and PBOC briefing: Will expand white list of property projects to receive bank lending to CNY4T by end-2024 (currently at CNY2.3T).
– PBOC Dep Gov Tao Ling: Real Estate development loans will be extended until end-2026; Have had ‘positive’ feedback to Sept policy changes.
– China stimulus plan seen to be ~CNY10T – China Daily.
– Apple reportedly has been quietly working with BYD on a long-range EV battery – press.
– Reportedly number of Chinese wind turbine manufacturers are now forming coalition to stop the price war in the wind turbine market – Danish press [overnight update].
– China Pres Xi: Stress to strive to achieve full year economic targets; Calls for effort on Q4 economic work – Chinese press [overnight update].
– China PBOC to drive technology in ‘some’ regions with more loans – financial press [overnight update].
– China PBOC sets Yuan reference rate: 7.1220 v 7.1191 prior (weakest level since Aug 29th).
– China PBOC Open Market Operation (OMO): Injects CNY133B in 7-day reverse repos; Net drains CNY17.4B v net injects CNY581B prior.
Japan
– Nikkei 225 opens +0.2% at 39,263.
– Japan Sept trade balance: -¥294.3B V -¥316.0BE.
– Japan ruling LDP party may lose majority at Oct 27th general election – Nikkei early polling.
– Japan PM Ishiba made offering to Yasukuni war shrine – Japanese press.
– Japan Stock Exchange CEO: Japan is currently at the top of the list for investors moving money away from China – press briefing.
– Japan sells ¥3.2T vs. ¥3.2T indicated in 12-Month Bills; Avg Yield: 0.2886% v 0.2622% prior; bid-to-cover: 3.04x v 3.56x prior.
Korea
– Kospi opens +0.4% at 2,620
– South Korea Vice Fin Min Yoon-sang: WGBI inclusion expected to draw fresh money inflows from countries including Japan and help keep Korean bond yields steady amid rising debt supply.
Other Asia
– Thailand Commerce Min Pichai: Reiterates wants to see higher inflation target – comments post-BOT rate cut of 25bps last night.
– Taiwan Central Bank (CBC) Gov Yang: Concerned house prices keep rising.
– Singapore Sept Non-oil Domestic Exports M/M: 1.1% v 4.9%e; Y/Y: 2.7% v 9.1%e.
– Philippines Central Bank (BSP) cuts overnight borrowing rate by 25bps to 6.00%; as expected.
– Thailand central bank (BOT) cuts benchmark interest rate by 25bps to 2.25%; not expected.
– Indonesia central bank (BI) leaves BI-rate unchanged at 6.00%; as expected.
North America
– (MX) Mexico Deputy Econ Min: General Motors, Foxconn, DHL, Stellantis, and Intel to lay out plan to replace imports to Mexico for local production.
– (US) MBA Mortgage Applications w/e Oct 11th: -17.0% v -5.1% prior.
– (US) Sept import price index M/M: -0.4% V -0.3%E; Y/Y: -0.1% V 0.0%E.
– (US) Oct New York Fed Services Business Activity Index: -2.2 v +0.5 prior.
Europe
– (YE) US forces struck Houthi weapons storage facilities in Yemen – US media.
– (IL) Reportedly US officials expect Israel’s counterattack on Iran will come before US Election Day on Nov 5th – CNN.
– (DE) German Chancellor Scholz: Need new industrial policy agenda that goes beyond reform.
Levels as of 01:20 ET
– Nikkei 225 -0.5%, ASX 200 +0.9%, Hang Seng +0.8%; Shanghai Composite +0.3%; Kospi -0.2%.
– Equity S&P500 Futures -0.2%; Nasdaq100 -0.3%; Dax -0.1%; FTSE100 flat.
– EUR 1.0851-1.0871; JPY 149.24-149.66; AUD 0.6660-0.6711; NZD 0.6054-0.6076.
– Gold +0.2% at $2,697/oz; Crude Oil +0.5% at $70.72/brl; Copper -0.3% at $4.3537/lb.