Asia Mid-Session Market Update: Minutes show RBA is comfortable with policy stance; BOJ begins 2-day meeting as speculation of easier and more flexible settings swirl
***US markets on close: Dow flat, S&P500 flat, Nasdaq -0.2%***
- Best Sector in S&P500: Utilities
- Worst Sector in S&P500: Healthcare
- Biggest gainers: KORS +3.7%, RHT +2.9%, OKE +2.8%, COH +2.6%, GM +2.4%
- Biggest losers: CHK -7.4%, WYNN -4.3%, SRCL -4.0%, ENDP -3.8%, MU -3.0%
***VIX 15.53 (+0.16pts); Treasuries: 2-yr 0.78% (flat), 10-yr 1.70% (-1bp), 30-yr 2.44% (-1bp)***
***US movers afterhours***
- CYH: Apollo Global Management said to be interested in acquiring assets of Community Health Systems - financial press; +3.7% afterhours
- STLD: Guides Q3 $0.63-0.67 v $0.70e; -2.4% afterhours
- HNI: Cuts Q3 $0.74-0.79 v $0.95e (prior $0.90-0.95), cuts FY16 $2.50-2.70 v $2.87e (prior $2.80-2.95); -7.8% afterhours
- ASNA: Reports Q4 $0.08 v $0.17e, R$1.81B v $1.78Be; -23.0% afterhours
- SEAS: Reduces dividend to $0.10 from $0.21; To suspend subsequent dividend payments; -6.2% afterhours
***After extended session***
- GE: Announces over $800M in digital industrial power orders for Asia-Pacific region
- FWRD: Lowers Q3 $0.48-0.52 v $0.63e (prior $0.61-0.65); Rev at -2% to +2% y/y (implies $242-252M v $252Me, prior +1-5%)
***Equity Futures (23:30ET): S&P e-mini +0.1%, Dax +0.1%, FTSE100 +0.1%***
***FX / Commodities ranges (23:30ET): ***
- EUR 1.1160-1.1180; JPY 101.80-102.05; AUD 0.7530-0.7555, NZD 0.7290-0.7320
- Gold +0.1% at 1319; Oil -0.6% at $43.62 / brl; Copper -0.2% $2.15/lb
**** Asian Equity Markets (23:30ET) ****
- Nikkei +0.1%, Hang Seng -0.2%, ASX -0.2%, Shanghai -0.1%, Kospi flat
***Key economic data: ***
- (AU) AUSTRALIA Q2 HOUSE PRICE INDEX Q/Q: 2.0% V 2.8%E; Y/Y: 4.1% (3-year low) V 5.1%E
***Speakers / Press / Key Themes***
China:
- China Commerce Ministry (MOFCOM) spokesperson: China trade continues stabilizing and improving
- PBOC SETS YUAN MID POINT AT 6.6595 V 6.6786 PRIOR; strengthens by most in 2 weeks
- China Premier Li: Yuan exchange rate to stay basically stable at a reasonable and balanced level; no basis for sustained devaluation of yuan - Chinese press
- Goldman Sachs: China YTD actual FX outflows are estimated at $420B v PBoC data of $190B
Japan:
- Japan PM Abe: Govt to leave monetary policy to BOJ; important for policy to fight deflation
- Nikkei speculates BOJ will likely adjust the policy framework at its meeting this week; may be forced to abandon its 2-year target timeframe and switch to a longer view; Negative rates are expected to be the centerpiece of BOJ future policy expansion, but because of their negative impact on financial sector, the BOJ will need to communicate consideration of side effects. One option is communicating it will prevent downturns in superlong interest rates.
Australia:
- RBA Sept Meeting Minutes: Data indicates growth near potential; Policy stance consistent with meeting CPI target over time; Lower AUD continues to support activity in traded sector; Demand uncertainty still weighing on non-mining investment; Conditions in established housing market had generally eased; China growth has eased a little further
Asia movers:
- Financials: Country Garden Holdings Co 2007.HK +1.4% (YTD result, share buyback); China Construction Bank 939.HK +0.3% (plans to sell first bad MBS)
- Technology: Tokyo Electron 8035.JP +2.5%, Sumco 3436.JP +3.4% (Intel raised 3Q sales outlook)
- Materials: Tokyo Steel Mfg Co 5423.JP -8.4% (cuts Oct steel prices); St Barbara SBM.AU +1.7% (Macquarie raised to Outperform); Western Areas WSA.AU +1.4% (nickel prices rose overnight); Galaxy Resources GXY.AU -8.4% (update on Mt Cattlin); China Sandi Holdings 910.HK +32.7% (conversion of convertible securities); New Hope Corporation NHC.AU -1.6% (FY16 result)
- Telecom: China Unicom 762.HK -1.7% (Aug result); China Mobile 941.HK -0.4% (Aug result); TPG Telecom TPM.AU -19.1% (FY16 result)