Asia Mid-Session Update: CNY and HK$ overnight HIBOR falls dramatically; RBA leaves rates on hold again
***Asia Summary***
- Asian equity markets opened higher taking its ques from positive US data overnight, US tax plan and perceived rate action from the Fed before the end of the year. All are adding to the perceptions of positive global growth. In Hong Kong, casino/gaming names rose higher after a long weekend and Macau Sept gaming revenue, which rose higher than expected. Japan’s Topix reached a 2-yr high while the Nikkei225 reached multi-month high. ASX was the only open market to trade lower, weighed down by several profit warnings.
- China’s first day of holiday saw a record number of rail passengers boding well for week long holiday sales. Australia building approvals continued to fall though at a slower pace than expected, m/m rose less than expected. HIA new home sales data showed a rise after a significant fall in July. Currencies trended toward dollar strength both against Asian and European currencies.
- As expected the RBA left cash target rate unchanged, with policy statement mostly unchanged sending the A$ to fresh session low of 0.7797 after reiterating its warning that growth and CPI may be slower than forecast if the A$ dollar keeps rising.
***Key economic data***
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED (14th consecutive monthly hold)
- (NZ) NEW ZEALAND Q3 NZIER BUSINESS CONFIDENCE: 5 V 18 PRIOR (18-month low)
- (AU) Australia Aug HIA New Home Sales m/m: 9.1% v -15.4% prior
- (AU) AUSTRALIA SEPT ANZ JOB ADVERTISEMENTS M/M: 0.0% V 1.7% PRIOR
- (AU) AUSTRALIA AUG BUILDING APPROVALS M/M: 0.4% V +1.0%E; Y/Y: -15.5% V -17.2%E
***Speakers and Press***
Australia/New Zealand
- (NZ) New Zealand Treasury Monthly Economic Indicators (MEI) Sept: Q3 outlook is mixed
Japan
- (JP) BoJ Tankan Price Survey: Companies see 0.7% y/y inflation in 1-year (prior 0.8%)
- (JP) Japan Ministry of Economy Trade and Industry announced a new policy initiative related to robotics and autonomous driving technologies – Japanese Press
***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +0.9%, Hang Seng 1.5%; Shanghai Composite closed; ASX200 -0.4%, Kospi closed
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax closed; FTSE100 +0.2%
***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.1740-1.1702; JPY 113.18-112.66; AUD 0.7835-0.7792;NZD 0.7197-0.7158
- Dec Gold -0.3% at $1,272/oz; Nov Crude Oil -0.3% at $50.41/brl; Dec Copper -0.6% at $2.93/lb
- (TH) Thailand Central Bank sells combined THB60B in 3-month and 6-month bonds
- (CN) Overnight CNY HIBOR falls 114bps, most since June
- (HK) Overnight HK$ HIBOR falls 61bps, largest fall since 2008
- JGB (JP) Japan MoF sells ¥1.92T v ¥2.3T indicated in 10-yr 0.1% (prior 0.1%) JGBs; Avg yield: 0.0770% v 0.011% prior; bid to cover: 4.08x v 3.95x prior
***Equities notable movers***
Australia/New Zealand
- QBE.AU Updates on hurricanes: Raises 2017 large individual risk and catastrophe claims allowance to $1.75B; estimated pretax impact of $600M; -3.2%
- TNE.AU Cuts FY17 profit +7-8% (prior 10-15%); underlying profit ~20%; -10.1%
- PAC.AU Sells 40% stake in IML to Natixis Global Asset Management for A$120M in cash; -14%
Japan
- 4502.JP Phase 3 trial evaluating the efficacy and safety of relugolix (TAK-385) in uterine fibroids meets primary endpoint; +1.1%