Asian Market Update: AUD sinks on downward revision in jobs data; Shanghai Composite returns for trade
***Economic Data*** - (CN) CHINA SEPT HSBC SERVICES PMI: 53.5 V 54.1 PRIOR - (JP) JAPAN AUG CURRENT ACCOUNT: ¥287B V ¥200BE; ADJ CURRENT ACCOUNT: ¥131B (5th straight surplus) V ¥187BE; TRADE BALANCE: -¥832B V -¥771BE - (PH) PHILIPPINES SEPT CPI M/M: 0.1% V 0.2%E; Y/Y: 4.4% V 4.5%E; CORE CPI Y/Y: 3.4% V 3.3%E - (UK) UK SEPT BRC SHOP PRICE INDEX Y/Y: -1.8% (17th month of decline) V -1.6% PRIOR
***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -1.5%, S&P/ASX -0.7%, Kospi flat, Shanghai Composite -0.1%, Hang Seng -0.8%, Dec S&P500 +0.1% at 1,929
***Commodities/Fixed Income*** - Dec gold +0.1% at $1,213/oz, Nov crude oil -0.4% at $88.52/brl, Dec copper flat at $3.03/lb - (US) API PETROLEUM INVENTORIES: CRUDE: +5.1M (largest build since April 15th) v +2Me, GASOLINE: +2.5M v -1Me, DISTILLATE: -1.1M v -1Me - (CN) PBoC sets yuan mid point at 6.1493 v 6.1525 prior setting (1st firmer Yuan setting since Sept 23rd) - (AU) Australia MoF (AOFM) sells A$700M in 4.25% 2026 Bonds; Avg yield: 3.4582%; Bid-to-cover: 3.83x - JGB: (JP) Japan MoF sells ¥500B in 0.1% 10-year CPI-linked Bonds; Bid-to-cover ratio 2.11x v 2.54x prior
***Market Focal Points/Key Themes/FX*** - YUM missed Q3 top-line consensus, with China-driven weakness (SSS -14% v -13% guidance) weighing on earnings. After an initial extended session dip, shares were modestly higher, as investors take solace in CEO commentary forecasting "continued solid sales and profit growth at our KFC division."
- Shanghai Composite returned for trade after a week-long break, rising to new 18-month highs on the heels of property market support from monetary authorities. Entering its midday break, the index was up 0.3% at 2,370. Investors cheered press speculation the PBoC could expand targeted rate cuts while shrugging the HSBC Services PMI sliding from last month's 17-month high. China Commerce Ministry also estimated retail sales rising 12% y/y during the National Day holiday break.
- In Japan, GPIF panel adviser Ito said 20-25% of assets should be dedicated to Japan stocks, forecasting the portfolio change announcement to come some time in December. USD/JPY fell to 3-week lows below ¥107.80 before bouncing back to ¥108.40 late in the session.
- Ahead of tomorrow's release of Australia employment data, the Stats Bureau announced it was stripping out the "seasonal factors" that yielded a 36-year high net change in the August data. That figure has now been released lower from 121K to 32K, weighing on AUD/USD as it fell about 60pips from the high below $0.8770.
***Equities*** US markets: - YUM Reports Q3 $0.87 (adj) v $0.86e, R$3.35B v $3.46Be; +1.0% afterhours - AGN: Valeant, Pershing Square (Ackman) said to be raising bid for Allergan by $15/shr - financial press; +1.2% afterhours - KRFT Increases quarterly dividend 5% to $0.55 from $0.525; +0.4% afterhours - SAVE Reports Sept load factor 81.5% v 84.7% y/y; Q3 op margin to be in lower half of prior guidance filing; -3.2% afterhours - TILE Guides Q3 $0.12-0.14 (ex items) v $0.26e, R$250-255M v $272Me; approves 500K share buyback program (0.7% of shares outstanding); intends to redeem notes; -17.9% afterhours
Notable movers by sector: - Utilities: Chubu Electric Power 9502.JP +1.1% (to launch jv with Tepco) - Technology: Asahi Glass [5201.JP] -2.1% (speculation of 9-mo result); Lenovo Group 992.HK -1.2% (extend jv with NEC); HTC Corp 2498.TW -0.4% (speculation to halt wearable computing devices) - Financials: Greentown China 3900.HK +1.2% (Sept operating results) - Customer discretionary: McDonald's Holdings 2702.JP -0.9% (FY14 guidance), Toho Co 9602.JP +2.9% (H1 guidance), Lawson Inc 2651.JP -0.8% (H1 results), Skyworth Digital 751.HK -0.7% (Sept results) - Healthcare: CSL Limited CSL.AU -0.5% (expansion in Melbourne)