Asian Mid-session Update: Markets rise on expectations of slow Fed liftoff; BOJ on hold with a new downside inflation risk warning
***Economic Data***
- (JP) JAPAN OCT TRADE BALANCE TOTAL: ¥111.5B V -¥246BE; ADJUSTED: -¥202.3B V -¥343BE
- (NZ) NEW ZEALAND Q3 PPI INPUT Q/Q: +1.6% (2-year high) V -0.3% PRIOR; PPI OUTPUT Q/Q: +1.3% (2-year high) V -0.2% PRIOR
- (NZ) NEW ZEALAND OCT ANZ JOB ADVERTISEMENTS M/M: 1.2% V 2.3% PRIOR
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +1.1%, S&P/ASX +1.3%, Kospi +0.9%, Shanghai Composite -0.1%, Hang Seng +1.1%, Dec S&P500 +0.1% at 2,081
***Commodities/Fixed Income***
- Dec gold +0.6% at $1,075/oz, Jan crude oil +0.7% at $42.23/brl, Dec copper -0.6% at $2.06/lb
- (CN) NDRC to cut natural gas wholesale price by 28% from Nov 20th - SCMP
- (CN) PBoC to inject CNY20B in 7-day reverse repos (40th consecutive injection); Injects net CNY10B this week v neutral position prior
- (JP) Japan investors bought net ¥871B in foreign bonds v bought ¥1.03T in prior week; Foreign investors bought net ¥328B in Japan stocks v bought ¥171B in prior week
***Market Focal Points/FX***
- Impressive US market rally in the wake of the Fed meeting minutes has carried over into Asia, where higher-beta Australia market is leading the way. The takeaway from the minutes is generally that December meeting would be the likely juncture for the liftoff, but any tightening campaign would be very gradual. US treasuries traded little changed post minutes, though USD has been on the defensive in Asia, particularly vs AUD and NZD. AUD/USD rose some 70pips above 0.7170, NZD/USD up nearly 80pips from the lows above 0.6540, and EUR/USD up 60pips above 1.0710.
- USD/JPY pair hit a low near 123.00 - down over 50pips - with most of the losses coming after the Bank of Japan policy decision. BOJ maintained its annual pace of monetary base expansion at ¥80T and also kept its overall economic assessment unchanged, suggesting that domestic economy continued to recover moderately. The only change the BOJ has made is on inflation front, reiterating that Y/Y rate of increase in CPI about 0% and inflation expectations rising from longer-term perspective, but adding some indicators recently showed weak developments. In its outlook, BOJ still sees Y/Y increase in CPI to be 0% for time being due to decline in energy prices.
- Earlier, Japan trade balance was better than expected on the headline, but a look inside the numbers revealed exports falling for the first time in 14 months and import decline much higher than expected - -13.4% v -8.6%e. Shipments to Asia and China were both down over 3.5%, while exports to US and Europe up over 5%.
- Elsewhere, shares of BHP were up about 3% amid positive sentiment from its annual shareholders meeting in spite of the Samarco disaster. China weekly open market operations revealed first net injection after 2 weeks of neutral stance. Terror alert levels across the globe in the wake of the Paris attacks also remain high - NYC police dept said it was "aware" of an ISIS video featuring Times Square, but did not suggest there were any immediate threats.
***Equities***
US equities / ADRs:
- KBIO: Turing Pharma CEO Martin Shkreli discloses buying 1.2M additional shares raising his stake to 1.625M shares (39.4% shares outstanding); +824% afterhours
- GMCR: Reports Q4 $0.85 v $0.70e, R$1.04B v $1.02Be; Raises annualized dividend 13% to $1.30 (implied yield 3.2%); +19.1% afterhours
- CTRP: Reports Q3 $2.09 (unclear if comp) v $0.07e, R$501M v $487Me; +13.6% afterhours
- CRM: Reports Q3 $0.21 v $0.19e, R$1.71B v $1.70Be; +5.8% afterhours
- WB: Reports Q3 $0.10 v $0.06e (1 est), R$124.7M v $84.1M y/y; +4.7% afterhours
- SINA: Reports Q3 $0.39 v $0.21e, R$224M v $220Me; +2.3% afterhours
- NTAP: Reports Q2 $0.61 v $0.56e, R$1.45B v $1.42Be; +1.8% afterhours
- LB: Reports Q3 $0.55 v $0.53e, R$2.48B v $2.50Be; +0.8% afterhours
- AGN: Pfizer said to be in advanced talks with Allergan on deal terms for as much as $380/shr - financial press; +0.7% afterhours
- SMTC: Reports Q3 $0.16 v $0.23e, R$116M v $115Me; -7.2% afterhours
- SUNE: Reportedly Blackstone unit denies earlier reports, says NOT looking to invest in SunEdison debt - financial press; -9.9% afterhours
Notable movers by sector:
- Consumer discretionary: Mobile Embrace MBE.AU +14.6% (guidance); Panasonic Corporation 6752.JP +1.2% (to sell new OLED TVs in FY17)
- Financials: Legend Holdings Corporation 3396.HK +0.3% (Q3 result); Bank of Beijing 601169.CN +10.0% (targeted RRR cut); Greentown China 3900.HK +6.2% (plans JV); OzForex Group OFX.AU +28.1% (possible takeover speculation); Tokio Marine Holdings 8766.JP +1.5% (H1 result)
- Industrials: James Hardie Industries JHX.AU -8.0% (H1 result)
- Technology: Truly International Holdings 732.HK +1.2% (9-month result)
- Materials: South32 S32.AU +4.0% (reaffirms guidance); BHP Billiton BHP.AU +2.1% (AGM; to commission external probe into dam spill)
- Energy: China Resources Gas Group 1193.HK -1.8% (NDRC cuts natural gas price)