Asian Mid-session Update: RBA minutes confirm neutral policy stance; China property prices continue to rebound
***Economic Data***
- (AU) AUSTRALIA JULY NEW MOTOR VEHICLE SALES M/M: -1.3% V +3.9% PRIOR; Y/Y: 3.7% V 4.4% PRIOR
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 113.2 v 112.5 prior; 6-week high
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.2%, S&P/ASX +0.1%, Kospi -0.4%, Shanghai Composite -0.9%, Hang Seng +0.3%, Sept S&P500 +0.1% at 2,101
***Commodities/Fixed Income***
- Dec gold -0.1% at $1,117/oz, Sept crude oil -0.2% at $41.79/brl, Sept copper flat at $2.32/lb
- JGB: (JP) Japan's MoF sells ¥1.09T in 1.3% (1.3% prior) 20-year JGBs; Avg yield: 1.144% v 1.188% prior; bid-to-cover: 2.99x v 3.09x prior
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3966 v 6.3969 prior setting; 3rd straight firmer Yuan setting
- (CN) PBoC to inject CNY120B in 7-day reverse repos (16th consecutive injection); largest injection since Jan 2014; Offer yield at 2.50%, unchanged from prior
***Market Focal Points/FX***
- Asian indices are trading softer heading into the afternoon session in spite of the rebound late in the day on Wall St. China's Shanghai Composite is leading the selloff, down 1.5% at its midday break and near session lows. Although the PBoC set Yuan slightly firmer for the 3rd straight day - effectively ending the Yuan devaluation ripple that spooked investors across the globe last week - traders are monitoring Chinese central bank's latest easing efforts. PBoC injected CNY120B in reverse repos - the highest since early 2014 - but the offering yield was unchanged at 2.5%, leading some to conclude that policymakers will calibrate monetary stance primarily through the open market operations. Those worries are magnified by more reports of a slowdown. PBoC adviser Fan Gang remarked that economic growth would remain low for the next few years, while another press report noted there is some disagreement among the drafters of the 13th Five Year Plan (2016-2020) about whether to target GDP of 6.5% or 7.0% for the upcoming 5 years.
- China property prices continue to recover as investors disenchanted with the stock market return to more familiar pastures. July prices fell in 29 out of 70 cities m/m - down from 34 in the prior month, and prices rose in 31 vs 27 prior. Across China's 70 top cities, prices were estimated at +0.3% v +0.4% prior, 3rd straight increase. Y/Y prices were still down for 11th straight month by 3.7%, but this was a slower decline than 4.9% prior.
- RBA policy meeting minutes from earlier this month reflected the less dovish than anticipated stance. Recall RBA removed the language that "further exchange rate depreciation seems both likely and necessary", while adding that economy was "associated with somewhat stronger growth of employment." The minutes also revealed that while RBA is comfortable with accommodative policy, it also sees economic activity as generally turning more positive and the downside risks related to China receding. AUD/USD traded up some 15pips after the initial thrust lower following the RBA comments, while S&P/ASX is heading toward close near its lows, down over 0.5%.
***Equities***
US equities / ADRs:
- FN: Reports Q4 $0.40 v $0.40e, R$206.5M v $198Me; +5.0% afterhours
- A: Reports Q3 $0.44 v $0.41e, R$1.01B v $1.00Be; +0.2% afterhours
- URBN: Reports Q2 $0.52 v $0.49e, R$867M v $884Me; -2.3% afterhours
- SUNE: Teams with invest; -2.6% afterhours
- MTZ: Reports Q2 $0.10 v $0.25e, R$1.07B v $1.02Be; -7.5% afterhours
- NPBC: BB&T to acquire National Penn Bancshares, Inc for about $1.8B or $13/shr
Notable movers by sector:
- Consumer discretionary: Cathay Pacific Airways 293.HK -0.1% (July result); HongKong & Shanghai Hotels 45.HK -0.8% (H1 result); Xinjiang Urban Construction Group Co 600545.CN +2.5% (H1 result); Shenzhen Huaqiang Industry 000062.CN +3.2% (H1 result); Dick Smith Holdings DSH.AU -15.4% (FY15 result); Sydney Airport SYD.AU -0.7% (H1 result, asset sale)
- Consumer staples: Beijing Dabeinong Technology Group Co 002385.CN -4.7% (H1 result)
- Financials: China Merchants Securities Co 600999.CN +2.0% (H1 result); Guotai Junan International Holdings 601211.CN +1.1% (H1 result); Shanxi Securities Co 002500.CN +3.7% (H1 result); Chong Hing Bank 1111.HK -6.3% (H1 result, right issue); SHENGJING BANK CO 2066.HK +1.7% (H1 result); QBE Insurance Group QBE.AU +2.7% (H1 result); Challenger Financial Services Group CGF.AU +4.5% (FY15 result); Shopping Centres Australasia Property Group SCP.AU -1.7% (FY15 result)
- Industrials: Jiangsu Linyang Electronics Co 601222.CN -3.1% (H1 result); Jiangxi Ganyue Expressway Co 600269.CN -3.6% (H1 result); Sufa Technology Industry Co 000777.CN -5.3% (H1 result); Tongfang Guoxin Electronics Co 002049.CN -1.8% (H1 result); Baoding Tianwei Baobian Electric Co 600550.CN -4.8% (H1 result); Monadelphous Group MND.AU +8.3% (FY15 result); Cardno Ltd CDD.AU -5.0% (FY15 result); GWA Group GWA.AU -2.6% (FY15 result)
- Technology: Beijing Baofeng Technology Co 300431.CN -3.5% (H1 result); Ourgame International Holdings 6899.HK -1.2% (H1 result); Hyundai Motor 005380.KR +1.7% (hire new workers)
- Materials: CSG Holding Co 000012.CN -5.6% (H1 result) Yunnan Chihong Zinc & Germanium Co 600497.CN -4.9% (H1 result); Yunnan Yuntianhua Co 000096.CN -6.1% (H1 result); China Nonferrous Metal Industry's Foreign Engineering and Construction Co 000758.CN -5.9% (H1 result); Fortescue Metals Group FMG.AU +6.0% (speculation on asset sale); Iluka Resources ILU.AU +1.8% (H1 result)
- Energy: China Shenhua Energy Co 1088.HK +2.6% (July result); Guanghui Energy Co 600256.CN -4.4% (H1 result)
- Healthcare: Tasly Pharmaceutical Group Co 600535.CN -1.9% (H1 result); Hangzhou Tigermed Consulting Co 300347.CN -6.4% (H1 result); China National Medicines Corp 600511.CN -7.7% (H1 result); Tianjin Chase Sun Pharmaceutical Co 300026.CN +1.1% (H1 result); China Medical System Holdings 867.HK +2.3% (H1 result) Sonic Healthcare SHL.AU -1.3% (FY15 result)