Asian Market Update: Japanese, Asian stocks weaker on economic data, geopolitical concerns
***Economic Data***
- (KR) SOUTH KOREA SEPT MANUFACTURING BUSINESS SURVEY: 74 V 75 PRIOR; BUSINESS SURVEY NON-MANUFACTURING: 72 V 66 PRIOR
- (NZ) NEW ZEALAND JULY BUILDING PERMITS M/M: 0.1% V 1.0%E
- (KR) SOUTH KOREA JULY CYCLICAL LEADING INDEX CHANGE: 0.1 V 0.2 PRIOR
- (KR) SOUTH KOREA JULY INDUSTRIAL PRODUCTION M/M: 1.1% V 0.3%E; Y/Y: 3.4% V 2.3%E
- (UK) UK AUG HOMETRACK HOUSING SURVEY M/M: 0.1% V 0.1% PRIOR; Y/Y: 5.5% V 5.8% PRIOR
- (UK) UK AUG GFK CONSUMER CONFIDENCE: +1 V -1E
- (JP) JAPAN JULY NATIONAL CPI Y/Y: 3.4% V 3.4%E; CPI EX FRESH FOOD Y/Y: 3.3% V 3.3%E
- (JP) JAPAN AUG TOKYO CPI Y/Y: 2.8% V 2.7%E; CPI EX FRESH FOOD Y/Y: 2.7% V 2.7%E
- (JP) JAPAN JULY JOBLESS RATE: 3.8% V 3.7%E; JOB-TO-APPLICANT RATIO: 1.10 V 1.10E
- (JP) JAPAN JUL OVERALL HOUSEHOLD SPENDING Y/Y: -5.9% V -2.9%E; (4th consecutive decline)
- (JP) JAPAN JUL PRELIMINARY INDUSTRIAL PRODUCTION M/M: 0.2% V 1.0%E; Y/Y: -0.9% V -0.1%E
- (JP) JAPAN JULY RETAIL SALES M/M: -0.5% V 0.3%E; RETAIL TRADE Y/Y: 0.5% V -0.2%E (first rise since April sales tax increase)
- (JP) JAPAN JULY LOANS & DISCOUNT CORP: 2.0% V 2.3% PRIOR
- (NZ) NEW ZEALAND AUG ANZ ACTIVITY OUTLOOK: 36.6 V 45.1 PRIOR (6th consecutive decline, lowest since 2012); ANZ BUSINESS CONFIDENCE: 24.4 V 39.7 PRIOR
- (AU) AUSTRALIA JULY PRIVATE SECTOR CREDIT M/M: 0.4% V 0.5%E; Y/Y: 5.1% V 5.1%E
- (SG) SINGAPORE JULY MONEY SUPPLY M1 Y/Y: +2.2% V -0.8% PRIOR; M2 Y/Y: 1.7% V 0.6% PRIOR
- (SG) SINGAPORE JULY BANK LOANS AND ADVANCES Y/Y: 10.8% V 12.3% PRIOR
- (SG) SINGAPORE JULY CREDIT CARD BAD DEBTS: 23.7M V 22.7M PRIOR; CREDIT CARD BILLINGS: 3.7B V 3.7B PRIOR
- (NZ) NEW ZEALAND JULY M3 MONEY SUPPLY Y/Y: 5.3% V 5.4% PRIOR
- (TH) Thailand July manufacturing production y/y: -5.2% v -3.0%e
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.7%, S&P/ASX flat, Kospi -0.4%, Shanghai Composite +0.2%, Hang Seng -0.4%, Sept S&P500 0.1% at 1,997
***Commodities/Fixed Income/Currencies***
- Dec gold -0.1% at $1,289, Oct crude oil +0.1% at $94.63/brl, Sept Copper +0.2% at $3.13/lb
- (JP) BOJ offers to buy ¥300B in 1-3yr JGB, ¥200B in 3-5yr JGB, ¥140B in floating rate notes as well as ¥1.8T in T-bills
- (AU) Australia MoF (AOFM) sells A$600M in 3.25% bonds due 2018; Avg yield: 2.7961%; Bid-to-cover: 5.01x
***Market Focal Points/Key Themes***
- Japan, Asian stocks were trading weaker on renewed Ukrainian tensions. Ukrainian President Poroshenko, and later the US, accused Russia of troops entering into Ukraine in support of pro-Russian rebels. Tougher sanctions are expected on Russia. Ukraine will hold an emergency meeting with NATO on Friday.
- Japanese household spending in July fell more than expected, declining for the fourth consecutive month, while industrial production remained weak after plunging last month. The m/m preliminary reading of 0.2% came in less than the expected 1.0%, though it was the first rise in two months; y/y also came in less than expected at -0.9% v -0.1%e. The spending and production data suggests soft exports and the hike in sales tax may drag on the economy longer than expected. The government maintained its assessment of output, adding that industrial production has weakened. The industries that mainly contributed to the increase were business machinery, textiles and petroleum.
- Japan headline and core inflation data for July came in as expected. CPI for Tokyo, considered a leading indicator, was up 2.8% beating forecast of 2.7% and unchanged from the prior month's reading.
- Also the Japanese unemployment rate for July came in at a seasonally adjusted reading of 3.8% missing the expected reading of 3.7% expected.
- Retail sales in Japan were up 0.5% on year beating forecasts of 0.2%. The components indicated sales from large retailers were down 0.6%, while commercial sales were up 0.1% on year. On a monthly seasonally adjusted basis, retail sales fell 0.5% coming lower than the forecast of +0.3%.
- NZD/USD traded lower by 20pips following New Zealand's July Building Permit monthly data at +0.1% below the forecasted +1.0%.
- New Zealand's ANZ Business Outlook showed 24% of businesses are optimistic regarding the overall outlook, down from the prior reading of 39%, and down 46 ppt from the peak in February. The Activity Outlook of 36.6 marked the sixth consecutive decline. The ANZ did comment that the level of confidence is still consistent with solid momentum and growth. The economy has semblances of Goldilocks; good growth and low inflation is a powerful mix.
***Equities***
US markets:
- VEEV: Reports Q2 $0.07 v $0.07e, R$75.7M v $69.6Me; Raises FY14 guidance; +13.4% afterhours
- SPLK: Reports Q2 +$0.01 v -$0.02e, R$101.5M v $93.9Me; +9.2% afterhours
- FRED: Reports Q2 -$0.19 v -$0.18e, R$491.2M v $491Me; +2.9% afterhours
- AVGO: Reports Q3 $1.26 v $1.06e, R$1.27B v $1.33Be; +2.2% afterhours
- OVTI: Reports Q1 $0.91 v $0.53e, R$406.5M v $384Me; +2.2% afterhours
- GOOGL: Said to be looking into the use of drones for delivery of goods - financial press; +0.3% afterhours
- JNJ: Reportedly seeking to sell its Cordis medical device unit worth around $2B - financial press; flat afterhours
- ZOES: Reports Q2 $0.04 v $0.02e, R$41.9M v $40.7Me; -1.7% afterhours
- TSLA: To cooperation with China Unicom; to build super-charging stations in 20 cities, 400 charging posts in 120 cities in 2 years - Chinese press
Notable movers by sector:
- Consumer Discretionary: Park24 4666.JP +1.9% (9-month results); Harvey Norman HVN.AU +5.8% (FY14 results)
- Consumer staples: Woolworths WOW.AU -1.3% (FY14 results)
- Materials: Silver Lake Resources SLR.AU +2.4% (FY14 results)
- Energy: Shunfeng Photovoltaic International 1165.HK -1.0% (H1 results); GCL-Poly 3800.HK +3.7% (H1 results); CNOOC 883.HK +2.4% (H1 results)
- Industrials: Virgin Australia VAH.AU +0.6% (FY14 results); Transfield Services TSE.AU +23.6% (FY14 results)
- Technology: Sharp Corp 6753.JP +1.2%, Pioneer Corp 6773.JP -3.1% (Sharp to sell stake in Pioneer)
- Healthcare: Unilife Corp UNS.AU +4.5% (FY14 results); GI Dynamics GID.AU +8.3% (names new CEO)