Asian Mid-session Update: China property prices grow for the first time in over a year; Terror vigilance still high as 2 flights to Paris diverted
***Economic Data***
- (AU) AUSTRALIA Q3 WAGE PRICE INDEX Q/Q: 0.6% V 0.6%E; Y/Y: 2.3% (matches 17-year lows) V 2.3%E
- (AU) AUSTRALIA OCT WESTPAC LEADING INDEX M/M: +0.1% V +0.1% PRIOR
- (AU) Australia Sept Conference Board Leading index m/m: -0.1% v -0.4% prior
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +0.6%, S&P/ASX +0.4%, Kospi +0.1%, Shanghai Composite +0.2%, Hang Seng +0.1%, Dec S&P500 flat at 2,048
***Commodities/Fixed Income***
- Dec gold -0.3% at $1,065/oz, Jan crude oil +0.8% at $42.04/brl, Dec copper -1.4% at $2.07/lb
- (US) API Petroleum Inventories: Crude: -0.48M v +6.3M prior; First draw in 6 weeks
- (CN) China National Coal Association (CNCA): China Jan-Oct coal consumption 3.2B tonnes, -4.7% y/y - China Daily
- (CN) China Iron and Steel Association (CISA) official: Steel production in 2016 may fall to 783M tons from estimated 806M in 2015 - financial press
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3796 v 6.3724 prior; Weakest Yuan setting since Aug 31st
- (CN) China MoF sells 7-yr bonds at 3.126%
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥400B in 3-5yr JGBs, ¥400B in 5-10yr JGBs
- (AU) Australia MoF (AOFM) sells A$800M in 4.25% 2026 Bonds; avg yield: 2.97%; bid-to-cover: 3.06x
***Market Focal Points/FX***
- Asian markets were modestly higher in the morning session, but mild optimism has given way to some caution in afternoon hours. The aftermath of the Paris terror attacks remains embedded in the most immediate market sentiment, as seen in the US hours when police had reportedly been called in about explosives at the Hanover soccer stadium in Germany. In the Asian hours, there were reports that two separate Air France flights to Paris - one from LA and one from Washington - have been diverted to other airports. Both flights landed safe and no passengers were harmed. In the mean time, France air force continues to conduct raids on an Isis in Syria, this time with assistance from Russia.
- China Pres Xi spoke at the APEC summit in the Philippines, noting continued uncertainty and instability in global economy despite some signs of sustained recovery. Xi added China economy is still in reasonable range and dealing well with temporary headwinds. China property prices also showed more signs of recovery. Across all 70 top cities surveyed, y/y 0.1% growth was the first in 14 months after falling 0.9% in Sept. M/M growth of 0.1% was slower than 0.2% prior but still marked the 6th month of gains. PBoC has resumed weakening Yuan midpoint fix after taking a pause yesterday, presumably on expectation of eventual strength as the currency is absorbed into the IMF SDR.
- Economic data have been largely contained to Australia, where the most notable datapoint was the Q3 Wage Prices. Wage inflation remains soft - a 17-year low in y/y rate - and figures to be considered by the RBA in the context of strong job creation reported last week. Ahead of tomorrow's BOJ policy decision, one survey was unanimous in expectation that no further stimulus would be announced. AUD/USD was down about 25pips at 0.7090 late in the day, while USD/JPY was down about 20pips from the highs below 123.30.
***Equities***
US equities / ADRs:
- NSC: CP confirms recommends combination; sends letter of proposal; +2.5% afterhours
- COMM: Maverick capital makes positive comments (already holds stake) at Robin Hood conference; +2.1% afterhours
- JACK: Reports Q4 $0.65 (adj) v $0.65e, R$354M v $358Me; +4.2% afterhours
- VIPS: Reports Q3 $0.12 v $0.12e, R$1.36B v $1.41Be; +3.2% afterhours
- CTXS: Raises FY16 $4.40-4.50 v $3.88e (prior $3.85-3.90); Cuts Rev +1-2% y/y (implies $3.13-3.16B v $3.25Be) (prior $3.24-3.25B); Gives initial results of its operations review, to layoff 1.0k positions; -1.8% afterhours
Notable movers by sector:
- Consumer discretionary: Car Inc 699.HK -1.1% (9-month result); Bosideng International Holdings 3998.HK -1.4% (guidance); Odakyu Electric Railway Co 9007.JP +1.9% (FY15/16 guidance)
- Financials: CITIC Securities 6030.HK +4.3% (possible restructure speculation); China CITIC Bank 998.HK +1.2% (to set up bank with Baidu)
- Industrials: Orica ORI.AU +3.2% (FY15 prelim result)
- Technology: Kingsoft Corp 3888.HK +3.2% (Q3 result)
- Materials: Cudeco CDU.AU -25.0% (impairment); BHP BHP.AU -2.5%, Fortescue FMG.AU -2.9% (Iron ore declines)
- Utilities: DUET Group DUE.AU +0.6% (raises FY16 dividend guidance)