Asian Mid-session Update: Dovish Fed minutes unable to revive sentiment in Asia
***Economic Data***
- (AU) AUSTRALIA JULY RBA FX TRANSACTIONS (A$): -0.7B v -2.5B PRIOR
- (NZ) NEW ZEALAND AUG ANZ CONSUMER CONFIDENCE INDEX: 109.8 V 113.9 PRIOR; M/M: -3.6% V -5.0% PRIOR
- (NZ) NEW ZEALAND JULY ANZ JOB ADVERTISEMENTS M/M: +0.1% V -0.5% PRIOR
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.6%, S&P/ASX -1.4%, Kospi -0.9%, Shanghai Composite -0.6%, Hang Seng -1.4%, Sept S&P500 +0.1% at 2,074
***Commodities/Fixed Income***
- Dec gold +0.7% at $1,135/oz, Oct crude oil -0.9% at $40.92/brl, Sept copper -0.2% at $2.27/lb
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3915 v 6.3963 prior setting; 5th straight firmer Yuan setting
- (CN) PBoC to inject CNY120B in 7-day reverse repos (17th consecutive injection); Injects net CNY150B this week (2nd week of injection, largest Weekly injection in 6 months) v injected CNY5B prior
- (JP) Japan investors bought net ¥600.3B in foreign bonds v bought ¥110.8B in prior week; Foreign investors sold net ¥501.1B in Japan stocks v bought ¥356.4B in prior week
***Market Focal Points/FX**
- Diminished expectations for a September liftoff gleaned in the latest release of the FOMC policy meeting minutes are not able to boost sentiment in the far east. July minutes revealed the committee concluded that "economic conditions warranting an increase in the target range for the federal funds rate had not yet been met." Note that sentiment had yet to capture continued soft inflation data - with today's headline US CPI showing more evidence of lower oil prices - and also China's latest devaluation measures. Australia's ASX led the regional selloff with a downward test of 5,300 - a multi-month low area. Hong Kong's Hang Seng also struggled with the added headwinds of the technically bearish "death cross" scenario.
- In Chinese press, there was more chatter that medium term GDP target could be formally downgraded to 6.5% from 7% in the coming 13th Five Year plan. Report also noted policymakers may give more focus on urban job creation and R&D investment. Recall earlier this week there were reports of a debate regarding that growth rate objective. PBoC also continued its open market operation easing activity, injecting another CNY120B for the day and CNY150B for the week - the biggest weekly injection in 6 months. Yuan midpoint was again set marginally higher relative to prior setting and relative to the close - the first stronger setting for the latter in 4 days.
- In FX, USD reaction was clearly bearish after the FOMC Minutes release, but there was little follow-through of that trend in Asia. USD/JPY fell 40pips below 123.70 after the minutes but was seen testing the upside of 124 again late in Asia. AUD/USD and NZD/USD were contained to 30pip ranges 0.7340 and 0.6590 respectively, while EUR/USD rose about 30pips above 1.1130. Gold pushed out to new 1-month highs around $1,139 in Asia, adding about $7 to the initial $6 jump on minutes release.
***Equities***
US equities / ADRs:
- AGTC: Announces strategic collaboration with Biogen effective and Biogen Equity Investment closed; +12.9% afterhours
- NTAP: Reports Q1 $0.29 v $0.23e, R$1.34B v $1.35Be; +12.1% afterhours
- UNFI: Guides Q4 $0.72-0.73 v $0.72e, R$2.06-2.065B v $2.05Be; +2.7% afterhours
- SSS: To be added to S&P400 and PLUS to be added to S&P600, after the close on Aug 21st; +1.5% afterhours
- LB: Reports Q2 $0.68 v $0.68e, R$2.77B v $2.77Be; -2.6% afterhours
- SMTC: Reports Q2 $0.24 v $0.23e, R$126M v $123Me; -3.2% afterhours
- JMEI: Reports Q2 $0.13 v $0.15e, R$308.1M v $154.5M y/y; -5.6% afterhours
Notable movers by sector:
- Consumer discretionary: Qantas Airways Ltd QAN.AU -2.1% (FY15 result); Breville Group Ltd BRG.AU +1.5% (FY15 result); Tatts Group Ltd TTS.AU -3.9% (FY15 result); Cathay Pacific Airways 293.HK -4.6% (H1 result); Galaxy Entertainment Group 27.HK -5.9% (H1 result); Macau Legend Development 1680.HK -2.9% (H1 result); China Dongxiang Group Co 3818.HK -1.0% (H1 result); AVIC Aero-Engine Controls Co 000738.CN -2.0% (H1 result); Jiangsu Pheonix Publishing & Media Co 601928.CN +8.2% (H1 result)l Intime Department Store Group Co 1833.HK +7.1% (H1 result)
- Financials: AMP Limited AMP.AU -0.6% (H1 result); Australian Stock Exchange ASX.AU -0.4% (FY15 result); WesFarmers Limited WES.AU +1.7% (FY15 result); Shanghai Pudong Development Bank 600000.CN -0.3% (H1 result); Beijing North Star Co 601588.CN -2.1% (H1 result); Shenzhen Overseas Chinese Town Co 000069.CN -2.9% (H1 result); Haining China Leather Market Co.002344.CN -0.8% (H1 result); Country Garden Holdings Co 2007.HK -1.4% (H1 result); China Overseas Land 688.HK +2.8% (H1 result)
- Industrials: Qube Logistics QUB.AU -3.3% (FY15 result); Ridley Corp RIC.AU -4.3% (FY15 result); PaperlinX PPX.AU +12.0% (FY15 result); Geely Automobile Holdings 175.HK -0.7% (H1 result); Sany Heavy Equipment International Holdings Co 631.HK -1.7% (H1 result); CIMC Enric Holdings Ltd 3899.HK -4.5% (H1 result); China National Chemical Engineering Co 601117.CN +0.7% (H1 result); Dongjiang Environmental Co 002672.CN +1.3% (H1 result); Changjiang & Jingong Steel Building Group Co 600496.CN -2.2% (H1 result); Guangzhou Guangri Stock Co 600894.CN -0.5% (H1 result); Henan Zhongyuan Expressway Co 600020.CN +10.0% (H1 result)
- Technology: Brambles Limited BXB.AU -2.7% (FY15 result); Hithink Flush Information Network Co 300033.CN -4.2% (delisting risk); Kingdee International Software Group Co 268.HK -5.3% (H1 result); Fujian Newland Computer Co 000997.CN +2.0% (H1 result); Sumavision Technologies Co 300079.CN +6.5% (H1 result); GoerTek Inc 002241.CN +1.8% (H1 result); Inspur Electronic Information Industry Co 000977.CN +5.1% (H1 result)
- Materials: Sandfire Resources SFR.AU -3.4% (FY15 result); Adelaide Brighton Limited ABC.AU -0.8% (H1 result); ENN Ecological Holdings 600803.CN -1.4% (H1 result); Zhongjin Gold Co Ltd 600489.CN +7.7% (H1 result); China Fiberglass Co 600176.CN -3.9% (H1 result)
-Energy: Origin Energy ORG.AU -11.8% (FY15 result) CGN Power Co 1816.HK -7.2% (H1 result); ENN Energy Holdings 2688.HK -4.0% (H1 result)
-Telecom: China Telecom Corp 728.HK +1.7% (H1 result)
-Utilities: CGN Meiya Power Holdings Co 1811.HK -2.3% (H1 result); China Electric Power Construction 601669.CN -1.7% (YTD new contracts); Sichuan Chuantou Energy Co 600674.CN -1.2% (H1 result)
-Healthcare: Yunnan Baiyao Group Co 000538.CN -0.4% (H1 result); Inner Mongolia Jinyu Group 600201.CN -3.9% (H1 result); Aier Eye Hospital Group Co 300015.CN -1.3% (H1 result); China National Accord Medicines Co 000028.CN -2.8% (H1 result); Changchun High & New Technology Industries 000661.CN -4.5% (H1 result); Shandong Weigao Group Medical Polymer 1066.HK+4.8% (H1 result)
***Economic Data***
- (AU) AUSTRALIA JULY RBA FX TRANSACTIONS (A$): -0.7B v -2.5B PRIOR
- (NZ) NEW ZEALAND AUG ANZ CONSUMER CONFIDENCE INDEX: 109.8 V 113.9 PRIOR; M/M: -3.6% V -5.0% PRIOR
- (NZ) NEW ZEALAND JULY ANZ JOB ADVERTISEMENTS M/M: +0.1% V -0.5% PRIOR
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.6%, S&P/ASX -1.4%, Kospi -0.9%, Shanghai Composite -0.6%, Hang Seng -1.4%, Sept S&P500 +0.1% at 2,074
***Commodities/Fixed Income***
- Dec gold +0.7% at $1,135/oz, Oct crude oil -0.9% at $40.92/brl, Sept copper -0.2% at $2.27/lb
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3915 v 6.3963 prior setting; 5th straight firmer Yuan setting
- (CN) PBoC to inject CNY120B in 7-day reverse repos (17th consecutive injection); Injects net CNY150B this week (2nd week of injection, largest Weekly injection in 6 months) v injected CNY5B prior
- (JP) Japan investors bought net ¥600.3B in foreign bonds v bought ¥110.8B in prior week; Foreign investors sold net ¥501.1B in Japan stocks v bought ¥356.4B in prior week
***Market Focal Points/FX**
- Diminished expectations for a September liftoff gleaned in the latest release of the FOMC policy meeting minutes are not able to boost sentiment in the far east. July minutes revealed the committee concluded that "economic conditions warranting an increase in the target range for the federal funds rate had not yet been met." Note that sentiment had yet to capture continued soft inflation data - with today's headline US CPI showing more evidence of lower oil prices - and also China's latest devaluation measures. Australia's ASX led the regional selloff with a downward test of 5,300 - a multi-month low area. Hong Kong's Hang Seng also struggled with the added headwinds of the technically bearish "death cross" scenario.
- In Chinese press, there was more chatter that medium term GDP target could be formally downgraded to 6.5% from 7% in the coming 13th Five Year plan. Report also noted policymakers may give more focus on urban job creation and R&D investment. Recall earlier this week there were reports of a debate regarding that growth rate objective. PBoC also continued its open market operation easing activity, injecting another CNY120B for the day and CNY150B for the week - the biggest weekly injection in 6 months. Yuan midpoint was again set marginally higher relative to prior setting and relative to the close - the first stronger setting for the latter in 4 days.
- In FX, USD reaction was clearly bearish after the FOMC Minutes release, but there was little follow-through of that trend in Asia. USD/JPY fell 40pips below 123.70 after the minutes but was seen testing the upside of 124 again late in Asia. AUD/USD and NZD/USD were contained to 30pip ranges 0.7340 and 0.6590 respectively, while EUR/USD rose about 30pips above 1.1130. Gold pushed out to new 1-month highs around $1,139 in Asia, adding about $7 to the initial $6 jump on minutes release.
***Equities***
US equities / ADRs:
- AGTC: Announces strategic collaboration with Biogen effective and Biogen Equity Investment closed; +12.9% afterhours
- NTAP: Reports Q1 $0.29 v $0.23e, R$1.34B v $1.35Be; +12.1% afterhours
- UNFI: Guides Q4 $0.72-0.73 v $0.72e, R$2.06-2.065B v $2.05Be; +2.7% afterhours
- SSS: To be added to S&P400 and PLUS to be added to S&P600, after the close on Aug 21st; +1.5% afterhours
- LB: Reports Q2 $0.68 v $0.68e, R$2.77B v $2.77Be; -2.6% afterhours
- SMTC: Reports Q2 $0.24 v $0.23e, R$126M v $123Me; -3.2% afterhours
- JMEI: Reports Q2 $0.13 v $0.15e, R$308.1M v $154.5M y/y; -5.6% afterhours
Notable movers by sector:
- Consumer discretionary: Qantas Airways Ltd QAN.AU -2.1% (FY15 result); Breville Group Ltd BRG.AU +1.5% (FY15 result); Tatts Group Ltd TTS.AU -3.9% (FY15 result); Cathay Pacific Airways 293.HK -4.6% (H1 result); Galaxy Entertainment Group 27.HK -5.9% (H1 result); Macau Legend Development 1680.HK -2.9% (H1 result); China Dongxiang Group Co 3818.HK -1.0% (H1 result); AVIC Aero-Engine Controls Co 000738.CN -2.0% (H1 result); Jiangsu Pheonix Publishing & Media Co 601928.CN +8.2% (H1 result)l Intime Department Store Group Co 1833.HK +7.1% (H1 result)
- Financials: AMP Limited AMP.AU -0.6% (H1 result); Australian Stock Exchange ASX.AU -0.4% (FY15 result); WesFarmers Limited WES.AU +1.7% (FY15 result); Shanghai Pudong Development Bank 600000.CN -0.3% (H1 result); Beijing North Star Co 601588.CN -2.1% (H1 result); Shenzhen Overseas Chinese Town Co 000069.CN -2.9% (H1 result); Haining China Leather Market Co.002344.CN -0.8% (H1 result); Country Garden Holdings Co 2007.HK -1.4% (H1 result); China Overseas Land 688.HK +2.8% (H1 result)
- Industrials: Qube Logistics QUB.AU -3.3% (FY15 result); Ridley Corp RIC.AU -4.3% (FY15 result); PaperlinX PPX.AU +12.0% (FY15 result); Geely Automobile Holdings 175.HK -0.7% (H1 result); Sany Heavy Equipment International Holdings Co 631.HK -1.7% (H1 result); CIMC Enric Holdings Ltd 3899.HK -4.5% (H1 result); China National Chemical Engineering Co 601117.CN +0.7% (H1 result); Dongjiang Environmental Co 002672.CN +1.3% (H1 result); Changjiang & Jingong Steel Building Group Co 600496.CN -2.2% (H1 result); Guangzhou Guangri Stock Co 600894.CN -0.5% (H1 result); Henan Zhongyuan Expressway Co 600020.CN +10.0% (H1 result)
- Technology: Brambles Limited BXB.AU -2.7% (FY15 result); Hithink Flush Information Network Co 300033.CN -4.2% (delisting risk); Kingdee International Software Group Co 268.HK -5.3% (H1 result); Fujian Newland Computer Co 000997.CN +2.0% (H1 result); Sumavision Technologies Co 300079.CN +6.5% (H1 result); GoerTek Inc 002241.CN +1.8% (H1 result); Inspur Electronic Information Industry Co 000977.CN +5.1% (H1 result)
- Materials: Sandfire Resources SFR.AU -3.4% (FY15 result); Adelaide Brighton Limited ABC.AU -0.8% (H1 result); ENN Ecological Holdings 600803.CN -1.4% (H1 result); Zhongjin Gold Co Ltd 600489.CN +7.7% (H1 result); China Fiberglass Co 600176.CN -3.9% (H1 result)
-Energy: Origin Energy ORG.AU -11.8% (FY15 result) CGN Power Co 1816.HK -7.2% (H1 result); ENN Energy Holdings 2688.HK -4.0% (H1 result)
-Telecom: China Telecom Corp 728.HK +1.7% (H1 result)
-Utilities: CGN Meiya Power Holdings Co 1811.HK -2.3% (H1 result); China Electric Power Construction 601669.CN -1.7% (YTD new contracts); Sichuan Chuantou Energy Co 600674.CN -1.2% (H1 result)
-Healthcare: Yunnan Baiyao Group Co 000538.CN -0.4% (H1 result); Inner Mongolia Jinyu Group 600201.CN -3.9% (H1 result); Aier Eye Hospital Group Co 300015.CN -1.3% (H1 result); China National Accord Medicines Co 000028.CN -2.8% (H1 result); Changchun High & New Technology Industries 000661.CN -4.5% (H1 result); Shandong Weigao Group Medical Polymer 1066.HK+4.8% (H1 result)