Asia Mid-Session Market Update: China CPI inflation rises on higher food prices; Wholesale PPI turns positive for the first time since 2012
Fri, 14 Oct 2016 1:09 AM EST
***US Session Highlights***
- (US) INITIAL JOBLESS CLAIMS: 246K (matches lowest since 1973) V 253KE; CONTINUING CLAIMS: 2.05M V 2.05ME
- (US) SEPT IMPORT PRICE INDEX M/M: 0.1% V 0.2%E; Y/Y: -1.1% V -1.0%E
- (US) Fed's Harker (non-voter, hawk): supports one rate move by end of the year; starting to see wage pressures
- YHOO: Verizon General Counsel: reasonable to believe email data breach had a material impact on Verizon-Yahoo deal - press
***US markets on close: Dow -0.3%, S&P500 -0.3%, Nasdaq -0.5%***
- Best Sector in S&P500: Utilities
- Worst Sector in S&P500: Financials
- Biggest gainers: ULTA +11.4%, AAL +5.0%, HCA +4.5%, ALK +3.6%, RRC +3.6%
- Biggest losers: COG -4.5%, QRVO -4.4%, FCX -4.0%, R -3.7%, MTB -3.3%
- At the close: VIX 16.7 (+0.8pts); Treasuries: 2-yr 0.86% (+2bp), 10-yr 1.74% (-4bp), 30-yr 2.47% (-3bp)
***US movers afterhours***
- HPQ -1.3%: Guides FY17 $1.55-1.65 v $1.62e; To cut about 3-4K jobs across all divisions; increases share buy back to $3B (11.6% of market cap)
- RSPP -4.4%: To acquire Silver Hill Energy Partners for $2.4B in cash and shares
- NHTC -14.3%: Reports prelim Q3 R$70.7M v $80.8M y/y
- HIVE -18.3%: Reports prelim Q3 -$0.07 to -$0.06 v -$0.04e, R$40M v $48.1Me, gross margin 67.5-68%
***Asia Session Notable Observations, Speakers and Press***
- China CPI rebounds to a 3-month high of 1.9% after falling to a 10-month low in the prior month; Food prices spike to 3.2% v 1.3% prior, with non-food rising 1.6% v 1.4% prior; Wholesale PPI turns positive for the first time since 2012 amid recovery in metal and coal prices; Economists suggest the latest inflation data will keep PBoC on hold for the rest of 2016.
- China state planner NDRC warns the recently announced debt to equity swap may increase banks' risks; Separately, State-owned Assets Supervision and Administration Commission (SASAC) signals increasing control of SOEs' bond sales due to potential debt crisis.
- Japan Fin Min Aso: Income and employment situations are improving; Personal consumption still lacking strength.
- RBA semi-annual financial stability review notes rising bad debt charges weighing on bank profit growth, with China loans also seen as concern; acknowledges that some settlements are taking longer and lending valuations are coming in below their contract price, though settlement failures to date remain low.
- Singapore GDP well below consensus as Q3 q/q contracts by over 4%; MAS still keeps width and center of currency band, but anticipates inflation to only start to pick up next year and growth to remain low; SGD falls on sentiment.
- GBP falls on FT comments from European Council president Tusk; Says UK's only alternative to "hard Brexit" is no Brexit.
***Asia Key economic data:***
- (CN) CHINA SEPT CPI M/M: 0.7% (7-month high) V 0.1% PRIOR; Y/Y: 1.9% (3-month high) V 1.6%E
- (CN) CHINA SEPT PPI Y/Y: +0.1% V -0.3%E (1st increase in 55 months)
- (SG) SINGAPORE Q3 ADVANCED GDP Q/Q: -4.1% V 0.0%E; Y/Y: 0.6% V 1.7%E
- (JP) JAPAN SEPT PPI M/M: 0.0% V -0.1%E; Y/Y: -3.2% V -3.2%E
- (JP) JAPAN SEPT M2 MONEY STOCK Y/Y: 3.6% V 3.4%E; M3 MONEY STOCK Y/Y: 3.1% V 2.9%E
- (KR) SOUTH KOREA SEPT IMPORT PRICE INDEX M/M: +0.1% V -1.8% PRIOR; Y/Y: -7.8% V -8.4% PRIOR
***Asian Equity Markets (00:00ET)***
- Nikkei +0.2%, Hang Seng +0.6%, Shanghai Composite -0.5%, ASX200 flat, Kospi +0.6%
***FX ranges/Commodities/Futures/Fixed Income (00:00ET):***
- EUR 1.1030-1.1060; GBP 1.2200-1.2260; JPY 103.60-104.00; AUD 0.7555-0.7605; NZD 0.7075-0.7135
- Dec Gold -0.1% at 1,257/oz; Crude Oil +0.5 at $50.68/brl; Copper +0.2% at $2.13/lb
- GLD: SPDR Gold Trust ETF daily holdings rise 2.7 tonnes to 961.6 tonnes; highest since Aug 16th
- Equity Futures: S&P e-mini flat, Dax flat, FTSE100 +0.1%
- USD/CNY: *(CN) PBOC SETS YUAN MID POINT AT 6.7157 V 6.7296 PRIOR; First stronger Yuan setting in 8 sessions
- (CN) PBOC to inject CNY30B in 7-day reverse repos; Drain net CNY410B for the week v CNY420.1B w/w
- (CN) China MoF sells 3-month bills at 1.943%
- JGB: (JP) Japan MoF sells ¥2.175T in 5-year JGB bonds; avg yield -0.201% v -0.175% prior; bid-to-cover 4.31x v 3.03x prior
***Asia movers***
- SinoChem 600500.CN +9.7%; To merge with ChemChina
- China Railway 0390.HK +2.1%; Engineering projects
- Doosan Heavy 034030.KR +1.9%; Philippines plant project
- AIA Group 1299.HK +1.5%; Q3 value of buildings
- China Jinmao 0817.HK; +1.4%; monthly sales
- Samsung Electronics +1.3%; additional guidance after Note 7 scandal
- Seven & I 3382.JP +1.2%; Raised at Okasan to Buy
- Cochlear COH.AU +1.0%; BlackRock takes stake
- Agile Group 3383.hk +0.9%; monthly sales
- China Vanke 2202.HK -0.9%; UBS cut to Sell
- Easy One Financial 0221.HK -8.2%; profit warning
- Independence Group IGO.AU -4.3%; reserves estimate update