Asian Market Update: RBA, RBNZ officials talk down respective exchange rates; ADB cuts SE Asia GDP targets
***Economic Data*** - (JP) JAPAN AUG PPI SERVICES Y/Y: 3.5% V 3.7%E - (AU) AUSTRALIA JUN-AUG JOB VACANCIES Q/Q: -0.7% V +2.5% PRIOR - (KR) SOUTH KOREA AUG DISCOUNT STORE SALES Y/Y: +3.2% V -4.6% PRIOR; DEPARTMENT STORE SALES Y/Y: +10.5% V +2.0% PRIOR - (PH) PHILIPPINES JUL TRADE BALANCE: -$33M V $181ME
***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 +1.2%, S&P/ASX +0.2%, Kospi +0.1%, Shanghai Composite +0.6%, Hang Seng +0.4%, Dec S&P500 -0.1% at 1,990
***Commodities/Fixed Income/Currencies*** - Dec gold -0.5% at $1,214/oz, Nov crude oil -0.1% at $92.76/brl, Dec copper -0.4% at $3.04/lb - SLV: iShares Silver Trust ETF daily holdings rise to 10,738 tonnes from 10,663 tonnes prior (multi-year high) - (CN) PBoC to drain CNY18B in 14-day repos (18th consecutive drain); Drains net CNY11B this week (largest drain in 7 weeks) v injected CNY8B in prior week; Offer yield at 3.5%, unchanged from prior. - USD/CNY: (CN) PBoC sets yuan mid point at 6.1497 v 6.1462 prior setting (weakest yuan setting since Sept 8th)
***Market Focal Points/Key Themes*** - Asian bourses are tracking a strong rebound in the US indices, where a 6-year high in new home sales reversed a 3-day slide. Nikkei225 is outperforming with a gain of over 1%, helped by renewed selling in Japanese Yen. - Volatility in foreign-exchange trading continued to pick up, with EUR/USD piercing below $1.2770 for a new 14-month low and NZD/USD falling below the $0.80 to mark a fresh 1-year low. NZD/USD sell-off was particularly pronounced at 70pips, driven by a statement from RBNZ calling Kiwi exchange rate level unjustified and unsustainable. Gov Wheeler added RBNZ would welcome a move to more sustainable exchange rate, and that the real rate has not adjusted materially to the recent downward movement in commodity prices given the 45% drop in dairy off its peak in February. AUD/USD fell to 7-month lows below $0.8820 following RBA board member Edwards also forecasting AUD downtrend likely to continue. - Asian Development Bank (ADB) released an update to its regional outlook for 2014, cutting Southeast Asia 2014 GDP forecast to 4.6% from 5.0% prior. ADB also affirmed China 2014 and 2015 GDP at 7.5% and 7.4% respectively, slightly more bullish than some of the recent growth downgrade projections from major banks. Separately, the head of China Banking Regulatory Commission (CBRC) said Chinese banking asset quality is within a stable range and risks are controllable.
***Equities*** US markets: - JBL: Reports Q4 $0.05 v $0.00e, R$4.06B v $3.81Be; +4.6% afterhours - EVTC: Announces $75M stock repurchase program (approx 4.3% of market cap); +0.5% afterhours - YHOO: Agrees to one-year lockup for Alibaba shares (Yahoo holds 15% stake post IPO) - filing; +0.3% afterhours - FUL: Reports Q3 $0.42 v $0.76e, R$526.8M v $539Me; -13.8% afterhours
Notable movers by sector: - Consumer staples: Daiei Inc 8263.JP -10.6%, Aeon 8267.JP +1.9% (Aeon's offer values Daiei at around ¥125/shr) - Financials: China South City Holdings 1668.HK +3.0% (Tencent to acquire additional stake); Monex Group 8698.JP -3.5% (analyst action) - Industrials: China Railway Tielong Container Logistics 600125.CN +1.5%, Shenzhen Feima International Supply Chain 002210.CN +2.7%, China Shipping Development 600026.CN +3.0%, China Cosco Holdings 601919.CN +6.4% (China to support logistics services); Minebea 6479.JP +5.0% (press speculation on FY14/15); Hyundai Heavy 009540.KR -2.1% (workers may go on strike) - Technology: Tsinghua Unisplendour 000938.CN +10.0%, Unisplendour Guhan Group 000590.CN +2.9% (Intel to acquire stake in Tsinghua Unigroup) - Utilities: Dongfang Electric 600875.CN +6.9%, Sufa Technology Industry 000777.CN +10.0%, Shenzhen Woer Heat-Shrinkable Material 002130.CN +6.6% (China to start building nuclear power projects)