Asian Market Update: Equities settle on speculation the Fed may reassess QE exit
***Economic Data*** - (SG) SINGAPORE SEPT ELECTRONIC EXPORTS Y/Y: -4.0% V -0.3%E; NON-OIL DOMESTIC EXPORTS M/M: -8.8% V -4.3%E; Y/Y: 0.9% V 2.9%E - (SL) SRI LANKA LEAVES REVERSE REPO RATE UNCHANGED AT 8.00% (EXPECTED); LEAVES REPURCHASE RATE UNCHANGED AT 6.50% (EXPECTED) - (JP) Japan investors bought net ¥796.0B in foreign bonds v sold ¥168.6B in prior week; Foreign investors sold net ¥254.3B in Japan stocks v bought ¥184.5B in prior week - NPD: Sept US video game sales $1.1B v $561.3M m/m, +2% y/y - (CL) CHILE CENTRAL BANK CUTS OVERNIGHT RATE TARGET BY 25BPS TO 3.00%, AS EXPECTED - (CO) COLOMBIA AUG INDUSTRIAL PRODUCTION Y/Y: 0.3% V 1.6% PRIOR - (CO) Colombia Aug Retail Sales Y/Y: 7.5% v 5.6%e
***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -0.7%, S&P/ASX +0.4%, Kospi -0.3%, Shanghai Composite -1.1%, Hang Seng +0.2%, Dec S&P500 +0.6% at 1,861, Dec gold -0.2% at $1,238, Nov crude oil +0.8% at $83.32/brl
***Market Focal Points/Key Themes/FX*** - The panic drums are beating softer relative to yesterday's session, tracking a bounce in US bourses overnight after Fed's Bullard hinted the pace of QE exit may not be etched in stone. This could potentially reverse the recent sentiment of "bad news = bad for markets" as it brings the pace of FOMC easing back into play. S&P/ASX is outperforming, with materials benefiting from a rebound in crude and metals from extreme lows in early US session. Shanghai Composite is lagging however, with analysts citing the uncertainty regarding the schedule of Hong Kong-Shanghai trading link.
- Appearing before parliament for the second consecutive day, BOJ governor Kuroda reiterated the central bank will continue easing until 2% inflation target is stable. Regarding the second sales tax hike, he said it would be difficult to respond if confidence is hurt by delaying tax hikes. USD/JPY briefly tested US-hours highs near 106.50, but has since retreated toward 106.10 entering afternoon session.
- In a press conference out of the US, President Obama addressed the growing concerns around Ebola. He said that a travel ban was not the best way to go as it was less effective than screening measures. Obama added that travelers could end up in the US anyway leading to more rather than few Ebola cases, and that he would consider appointing an "Ebola czar" to streamline containment efforts.
***Commodities/Fixed Income*** - (AU) Australia MoF (AOFM) sells A$500M in 4.25% bonds due 2017; Avg yield: 2.5295%; Bid-to-cover: 3.94x - (US) Weekly Fed Balance Sheet Total Assets for week ending Oct 15th: $4.47T v $4.45T prior; M1 y/y change: 10.7% (3-week high) v 9.8% w/w; M2 y/y change: 6.2% (3-week high) v 5.6% w/w - (US) AUG NET LONG-TERM TIC FLOWS: +$52.1B (6-month high) V -$18.6B PRIOR; TOTAL NET TIC FLOWS: $74.5B V $60.2B PRIOR - JGB: (JP) Japan's MoF sells ¥2.46T in 0.1% (0.2% prior) 5-yr notes; Avg yield: 0.134% v 0.179% prior; Bid to cover: 4.54x v 3.69x prior
***Equities*** US markets: - SRPT: Announces Publication of Ebola and Marburg Phase I Clinical Study Results in Antimicrobial Agents; +10.0% afterhours - XLNX: Reports Q2 $0.62 v $0.55e, R$604.3M v $601Me; +3.9% afterhours - SLB: Reports Q3 $1.49 v $1.46e, R$12.6B v $12.7Be; +1.5% afterhours - SYK: Reports Q3 $1.15 v $1.14e, R$2.39B v $2.33Be; flat afterhours
- ATHN: Reports Q3 $0.27 v $0.28e, R$190M v $190Me; -2.0% afterhours - GOOG: Reports Q3 $6.35 v $6.46e, R$13.17B v $13.2Be; -2.1% afterhours - COF: Reports Q3 $1.86 v $1.92e, R$5.64B v $5.54Be; -2.6% afterhours - CF: Announces termination of merger discussions with Yara International; -3.9% afterhours - SNDK: Reports Q3 $1.45 v $1.36e, R$1.75B v $1.76Be; -5.1% afterhours - AMD: Reports Q3 $0.03 v $0.04e, R$1.43B v $1.47Be; Announces workforce reduction of 7%; -5.3% afterhours
Notable movers by sector: - Consumer Discretionary: Virgin Australia VAH.AU -1.3% (Q1 results) - Materials: Ramelius Resources RMS.AU +8.7% (Q1 production results); Kingsgate KCN.AU +5.6% (Q1 production results) - Energy: Kansai Electric Power 9503.JP +1.5% (raises H1 guidance) - Industrials: Tadano Ltd 6395.JP +7.0% (raises H1 guidance); AVIC Aircraft 000768.CN +5.1% (to further invest in large-sized aircraft projects) - Utilities: J-Power 9513.JP +1.6% (plans to build new power plant)