Asian Market Update: BOJ cuts view on housing investment; Australia trade deficit narrows
***Economic Data*** - (JP) BANK OF JAPAN (BOJ) POLICY STATEMENT: REITERATES TO INCREASE MONETARY BASE AT ANNUAL PACE OF ¥60-70T (AS EXPECTED); Maintains overall economic assessment for 13th consecutive meeting; Vote unanimous - (AU) AUSTRALIA JULY TRADE BALANCE (A$): -1.4B V -1.8BE (4th consecutive deficit, smallest deficit in 3 months) - (AU) AUSTRALIA JULY RETAIL SALES M/M: 0.4% V 0.4%E - (NZ) NEW ZEALAND AUG QV HOUSE PRICES Y/Y: 6.9% V 7.6% PRIOR (smallest rise since Mar 2013) - (KR) South Korea Q2 Final GDP Q/Q: 0.5% v 0.6% prelim; Y/Y: 3.5% v 3.6% prelim - (BR) BRAZIL CENTRAL BANK (COPOM) LEAVES SELIC TARGET RATE UNCHANGED AT 11.00%; AS EXPECTED
***Index Snapshot (as of 03:30 GMT)*** - Nikkei225 -0.2%, S&P/ASX -0.3%, Kospi +0.2%, Shanghai Composite -0.1%, Hang Seng -0.3%, Sept S&P500 flat at 1,998
***Commodities/Fixed Income/Currencies*** - Dec gold +0.2% at $1,273/oz, Oct crude oil -0.4% at $95.15/brl, Dec copper +0.4% at $3.15/lb - (US) API PETROLEUM INVENTORIES: CRUDE: -0.5M (smallest draw in 3 weeks) v -1Me, GASOLINE: +0.4M v -1.5Me, DISTILLATE: +0.4M v -0.5Me - SLV: iShares Silver Trust ETF daily holdings fall to 10,363 tonnes from 10,371 tonnes prior (first decline since Aug 4th) - GLD: SPDR Gold Trust ETF daily holdings falls 2.7 tonnes to 790.5 tonnes; Lowest level since June 29th - (CN) PBoC to drain CNY15B in 14-day repos (12th consecutive drain); Injects net CNY7B this week v injected CNY45B prior (4th consecutive week of injection) - (JP) Japan investors bought net ¥503.7B in foreign bonds v sold net ¥608.4B in prior week; Foreign Investors sold net ¥110.7B in Japan stocks v bought net ¥173.1B in prior week
***Market Focal Points/Key Themes*** - Despite expectations of a more upbeat policy statement cheerleading Japan's economic resilience, the Bank of Japan largely stuck to the familiar script. For the 13th consecutive meeting, the BOJ kept its overall assessment unchanged that "economy continued to recover moderately as a trend." BOJ also affirmed its assessment of exports, investment, employment, consumption, and inflation, while lowering its view on housing to state the "decline in housing investment following front-loaded increase has continued." Also of note out of Japan, earlier Nikkei report indicating Japan Economic Council may push forward its regular meetings to as early as Sept 16th from previously scheduled Oct to allow for more deliberation regarding the next round of sales tax increases. USD/JPY hit its lows after the BOJ but still remained within a 20-pip ¥101.75-95 range for the session.
- Australia economic data for July were mixed. Growth in retail sales at 0.4% m/m was in line with consensus but slower than 0.6% prior. Terms of trade were in deficit for the 4th straight month, albeit narrower than anticipated. Exports rose 1% m/m and imports were flat. Shipments to China fell about 10% to A$7.6B, iron ore exports were up slightly, while coal shipments were little changed. AUD/USD briefly rose above $0.9360 after trade figures before retreating below $0.9350.
- Shares of Yum Brands were down 3.5% in extended session, warning about "significant negative impact" related to poor food handling in China. Q3 SSS are expected to fall 13% after rising 15% in Q2.
***Equities*** Market Snapshot (as of 03:30 GMT): US markets: - MITK: USAA and Mitek Settle Lawsuit; +70.5% afterhours - BOLT: To be acquired by Teledyne at $22/shr in cash valued at $171M; +34.8% afterhours - TIBX: Announces review of strategic alternatives; +10.3% afterhours - PVH: Reports Q2 $1.51 v $1.43e, R$1.98B v $1.99Be; +7.8% afterhours - HRB: Reports Q1 -$0.40 v -$0.41e, R$134M v $129Me; +3.0% afterhours - YUM: Sees China Q3 SSS -13%; cites "significant negative impact" from bad publicity about food handling by supplier Shanghai Husi - filing; -3.5% afterhours - AVAV: Reports Q1 -$0.16 v -$0.08e, R$51.9M v $49.4Me; -6.4% afterhours - GNE: Considering Alternative Ways Forward for Oil Shale Pilot Project in Israel; -8.8% afterhours - MTRX: Reports Q4 $0.28 v $0.37e, R$344.4M v $357Me; -15.3% afterhours
Notable movers by sector: - Consumer Discretionary: 361 Degrees 1361.HK +4.0% (strategic alliance with Baidu); Wotif.com Holdings WTF.AU -5.7% (regulator update) - Financials: China Vanke 2202.HK +3.2%, Poly Real Estate 600048.CN +1.0% (property developers allowed to issue bonds); BJ Capital Land 2868.HK +3.9% (Aug sales result); Hulic 3003.JP +0.3% (comments from President) - Materials: Panoramic Resources PAN.AU +4.9% (FY15 production guidance) - Technology: SK Hynix 000660.KR +1.5% (press speculation on DRAM production); Samsung Electronics 005930.KR +1.9% (unveils products)