Asian Mid-session Market Update: Markets shrug off disappointing data; Japan Q2 prelim GDP was flat q/q; Sharp becomes a Foxconn unit
***Economic Data***
- (JP) JAPAN Q2 PRELIMINARY GDP Q/Q: 0.0% V 0.2%E; ANNUALIZED GDP Q/Q: 0.2% V 0.7%E
- (UK) UK AUG RIGHTMOVE HOUSE PRICES M/M: -1.2% V -0.9% PRIOR; Y/Y: 4.1% V 4.5% PRIOR
- (TH) THAILAND Q2 GDP Q/Q: 0.8% V 0.5%E; Y/Y: 3.5% V 3.3%E
- (JP) JAPAN JUN FINAL INDUSTRIAL PRODUCTION M/M: 2.3% V +1.9% PRELIM; Y/Y: -1.5% V -1.9% PRELIM
- (NZ) NEW ZEALAND JUNE PERFORMANCE OF SERVICES INDEX: 54.2 V 56.4 PRIOR (20-month low)
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 flat, S&P/ASX 0.2%, Kospi closed, Shanghai Composite 2.3%, Hang Seng 0.7%, Sep S&P500 1% at 2,183
***Commodities/Fixed Income***
- Dec gold 0.1% at $1344,/oz, Sep crude oil 0.8% at $44.84/brl, Sep copper 0.4% at $2.14/lb
- (CN) PBOC SETS YUAN MID POINT AT 6.6430 V 6.6543 PRIOR
- (CN) PBOC to inject CNY130B in 7-day reverse repos
- (AU) Australia MoF (AOFM) sells A$400M in 4.5% 2033 Bonds; avg yield: 2.2528%; bid-to-cover: 1.82x
***Market Focal Points/FX***
- Asian equities opened slightly to the downside with weaker macro data out of the US and Europe Friday. Markets saw a slight recovery heading into the mid-day break, Brent crude rose on comments from Saudi Arabia's energy minister that the country would work with other oil producers to stabilize oil prices.
- Markets seem to shrug off weaker Japan GDP data. Notably corporate CAPEX was -0.4%, exports were down 1.5% and public investment was +2.3% v -0.7% final Q1 reading. USD/JPY remained in a ~35 pip range 101.48/101.13. Japan Fin Min Aso noted that personal consumption was not strong and the government and BoJ continue to work together to fight deflation. He also noted that there are some good affects coming from negative rates.
- Shanghai and Hong Kong were positive after China CSRC announced Friday it had established a team to get ready for the launch of Shenzhen-Hong Kong Stock Connect. Hong Kong official said they are technically prepared for the connect, which is expected to take place this year and officially be announced this week.
- Late in Friday session China reported July, new yuan loans (2-yr low), aggregate financing (2-yr low) and M2 money supply (15-month low) data all showing significantly slower growth. PBoC Researcher Chief Ma: The slowing growth in M2 money supply has not affected the economy. China also issued a 99-page statement in response to IMF's report, largely disagreeing with its outlook on China.
- NZD/JPY fell to a 1-week low at 72.61 and a 5-day low against the USD at 0.7165, NZD/JPY support seen against 69.00 and NZD/USD support at 0.69. ANZ warned that New Zealand may face deflation for the first time in 17-yrs, seeing Q3 y/y at -0.1%, this would be the first decline since Q3 1999.
***Equities***
US equities / ADRs:
- PPS: Mid-America Apartment Communities expected to announce deal to acquire Post Properties in a stock deal valued at ~$4.0B - financial press
Notable movers by sector:
- Consumer discretionary: JB Hi-Fi JBH.AU +8.3% (FY16 result); Ansell ANN.AU+15.4% (FY16 result); Dentsu Inc 4324.JP +6.3% (H1 result); Wynn Macau 1128.HK -4.8% (Wynn Palace approved to commence operations); Citizen Holdings Co 7762.JP -7.7% (Q1 result); Laox Co 8202.JP -4.4% (cuts guidance)
- Financials: Shenzhen Investment 604.HK +2.6% (July result); GPT Group GPT.AU +1.2% (H1 result); National Australia Bank NAB.AU +0.8% (Q3 result); Vanke 000002.CN +10.0%
- Industrials: Aurizon Holdings AZJ.AU -6.5% (FY16 result)
- Technology: Asustek Computer 2357.TW +0.8% (July result); Sharp Corp 6753.JP +10.4% (becomes Foxconn unit); Mabuchi Motors 6592.JP +4.6% (H1 result); Toshiba Corporation 6502.JP +7.4% (Q1 result); TCL Multimedia Technology Holdings 1070.HK -4.7% (H1 result)
- Materials: CGN Mining Co 1164.HK +8.6% (profit alert); Newcrest Mining NCM.AU -4.4% (FY16 result); China Hongqiao Group 1378.HK +3.7% (FY16 result)
- Energy: Tonengeneral Sekiyu 5012.JP -4.8% (H1 result)