Asian Market Update: China manufacturing PMIs hit multi-month highs
***Observations/Insights*** - Twin Manufacturing PMIs from China - official and final HSBC - both top estimates to hit multimonth highs. HSBC chief economist points to stronger momentum of manufacturing growth translating into the first expansion of employment since March. Moreover, Oct marked the strongest expansion of new business from abroad in nearly a year, and the stocks of finished goods increased for the first time in four months. - Fluor and AIG miss on the top line, shares down over 3% in extended session; FSLR up sharply after beating estimates and upgrading guidance as a result of initial revenue recognition of Desert Sunlight project. - Japan Finance Minister targets a ¥4T cut in primary balance; Says will monitor the impact of US monetary policy a day after US Treasury announced plans to track Japan. - Australia PPI hits a 3-year high while manufacturing sector shines with its highest level in over 3 years.
***Economic Data*** - (CN) CHINA OCT FINAL HSBC/MARKIT MANUFACTURING PMI: 50.9 V 50.7E (7-month high) - (CN) CHINA OCT MANUFACTURING PMI: 51.4 V 51.2E (18-month high) - (AU) AUSTRALIA Q3 PPI Q/Q: 1.3% V 0.1% PRIOR (3-year high); Y/Y: 1.9% V 1.2% PRIOR - (AU) AUSTRALIA OCT RPDATA/RISMARK HOUSE PRICE: 1.3% V 1.6% PRIOR - (AU) AUSTRALIA OCT AIG PERFORMANCE OF MANUFACTURING INDEX (PMI): 53.2 V 51.7 PRIOR (2nd straight month above 50; highest level since Jul 2010) - (ID) INDONESIA OCT HSBC/MARKIT MANUFACTURING PMI: 50.9 V 50.2 PRIOR - (ID) INDONESIA OCT CPI M/M: +0.1% V -0.3% PRIOR; Y/Y: 8.3% V 8.4% PRIOR; CORE CPI Y/Y: 4.7% V 4.7% PRIOR - (ID) INDONESIA SEPT TRADE BALANCE: -$660M V +$132M PRIOR - (VN) VIETNAM OCT HSBC/MARKIT MANUFACTURING PMI: 51.5 V 51.5 PRIOR - (TW) TAIWAN OCT HSBC/MARKIT MANUFACTURING PMI: 53.0 V 52.0 PRIOR - (KR) SOUTH KOREA OCT HSBC/MARKIT MANUFACTURING PMI: 50.2 V 49.7 PRIOR (5-month high) - (KR) SOUTH KOREA OCT TRADE BALANCE: $4.9B V $4.3BE - (KR) SOUTH KOREA OCT CPI M/M: -0.3% V +0.1%E; Y/Y: 0.7% V 1.0%E (14-year low); CPI CORE Y/Y: 1.6% V 1.6% PRIOR
***Fixed Income/Commodities/Currencies*** - USD/CNY: (CN) PBoC sets yuan mid point at 6.1452 v 6.1425 prior setting (weakest Yuan setting since Oct 10th) - (JP) BOJ offers to buy ¥2T in T-bills outright on Nov 6th - (AU) Australia MoF (AOFM) sells A$800M in 5.75% 2021 Bonds; avg yield: 3.800%; bid-to-cover: 4.27x - (US) Weekly Fed Balance Sheet Assets Week ending Oct 30th: $3.800T (record high) v $3.795T prior; M1 y/y change: 9.0% v 9.0% w/w; M2 y/y change: 6.6% v 6.6% w/w
- Euro remains under pressure across the board, as less dovish than expected FOMC statement and soft EZ inflation data overnight are helping send EUR/USD to 2-week lows below $1.3550, now down about 3 big figures from the highs seen just last week. EUR/JPY is also at a 2-week low below 133, while EUR/GBP is at a 1-week low. By contrast, the recent decliner AUD is off its lows on the heels of higher than expected PPI, strong AiG manufacturing, and robust China PMI's. AUD/USD is up 40pips to 0.9480, and EUR/AUD cross is at a 1-week low. USD/JPY fell below the ¥98 handle in the afternoon session, off by about 50pips from the highs.
***Speakers/Political/In the Papers*** - (CN) China Oct home prices +1.24% m/m to CNY10.7K/sqm- Soufun - (CN) China State Administration of Foreign Exchange (SAFE) may issue policy on Yuan demand limit - Hong Kong press - (CN) Nikkei News comments on a rise in non-performing loans among China's top banks - (NZ) New Zealand Oct new residential listings +27% m/m - Realestate.co.nz - (JP) Japan Fin Min Aso: Aims to cut primary balance by ¥4T in FY14/15 - (JP) According to a majority of private-sector economists, there is still a "deflationary mindset" in Japan - Nikkei News
***Equities*** Market Snapshot (as of 03:30 GMT): - Nikkei225 -0.9%, S&P/ASX -0.1%, Kospi +0.2%, Shanghai Composite flat, Hang Seng flat, Dec S&P500 +0.2% at 1,754, Dec gold -0.1% at $1,323, Dec crude oil -0.1% at $96.31/brl
US markets: - ELLI: Reports Q3 $0.25 v $0.29e, R$33M v $34.3Me; -17.4% afterhours - ABX: Plans To Reduce Debt; Launches a $3.0B Public Equity Offering (15% of market cap); -5.4% afterhours - FLR: Reports Q3 $1.05 v $1.03e, R$6.68B v $7.27Be; -3.3% afterhours - AIG: Reports Q3 $0.96 adjusted v $0.93e, R$8.43B v $10.1Be; -3.2% afterhours
- NEM: Reports Q3 $0.46 v $0.32e, R$1.98B v $1.98Be; +0.3% afterhours - RSG: Authorizes additional $650M for Stock Repurchases (about 5% of market cap); +2.3% afterhours - FSLR: Reports Q3 $2.28 v $0.92e, R$1.27B v $961Me; +7.3% afterhours - TRMB: Reports Q3 $0.39 v $0.36e, R$556.5M v $558Me; +7.4% afterhours - GDOT: Reports Q3 $0.24 v $0.22e, R$139.1M v $136Me; Green Dot and Walmart Expand Walmart MoneyCard Portfolio with a Suite of Prepaid Debit Cards; +14.6% afterhours
Notable movers by sector: - Consumer discretionary: Panasonic Corp 6752.JP +5.6% (H1 results); Capcom Co Ltd 9697.JP -0.9% (H1 results); Japan Airlines Corp 9201.JP -0.5% (H1 results); David Jones Ltd DJS.AU +6.8% (Q1 results); Bega Cheese BGA.AU +10.0% (Fonterra acquires stake); Dongfeng Motor 489.HK +2.4% (Q3 results); SK Networks 001740.KR +1.8% (Q3 results) - Industrials: Mazda Motor Corp 7261.JP -0.5% (H1 results); Toto Ltd 5332.JP +5.6% (H1 results); Yamaha Corp 7951.JP -1.6% (H1 results); Sumitomo Heavy Industries 6302.JP +8.3% (H1 results) - Materials: PanAust PNA.AU -3.7% (acquires project) - Financials: Macquarie Group Ltd MQG.AU +4.7% (H1 results); Shinsei Bank Ltd 8303.JP flat (H1 results) - Technology: Sony Corp 6758.JP -12.1% (H1 results); Sharp Corp 6753.JP +2.8% (H1 results); Sumitomo Electric Industries Ltd 5802.JP -0.2% (H1 results); NTT Data Corp 9613.JP -6.5% (H1 results); TCL Corp 1070.HK +3.1% (sees to profit in Q4) - Utilities: TEPCO 9501.JP +2.5% (H1 results) - Telecom: Softbank 9984.JP +2.9% (H1 results)