Asian Market Update: AUD plummets as Australia unemployment rate rises to 12-year high
***Economic Data*** - (AU) AUSTRALIA JULY EMPLOYMENT CHANGE: -0.3K V +13.2KE; UNEMPLOYMENT RATE: 6.4% (12-year high) V 6.0%E - (AU) AUSTRALIA JULY AIG PERFORMANCE OF CONSTRUCTION INDEX: 52.6 V 51.8 (2nd consecutive expansion, highest since Nov 2013) - (NZ) NEW ZEALAND JUL QV HOUSE PRICES Y/Y: 7.6% (13-month low) V 8.0% PRIOR - (JP) JAPAN JUL TOKYO AVERAGE OFFICE VACANCIES: 6.2% V 6.5% - (JP) Japan investors bought net ¥897.4B in foreign bonds vs sold net ¥302.0B prior week; Foreign Investors bought net ¥94.9B in Japan Stocks last week vs bought net ¥204.5B in prior week - (JP) JAPAN JUL OFFICIAL RESERVE ASSETS: $1.28T V $1.28T PRIOR
***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -0.2%, S&P/ASX -0.1%, Kospi -0.4%, Shanghai Composite -0.1%, Hang Seng -0.5%, Sept S&P500 flat at 1,915
***Commodities/Fixed Income/Currencies*** - Dec gold +0.1% at $1,309, Sept crude oil +0.2% at $97.11/brl, Sept Copper +0.4% at $3.18/lb - (AU) Australia Port Hedland Jul Iron Ore shipments m/m: 36.08M tonnes v 33.6M prior - GLD: SPDR Gold Trust ETF daily holdings fall 2.4 tonnes to 797.7 tonnes (lowest since July 3rd) - SLV: iShares Silver Trust ETF daily holdings rise to 10,034 tonnes from 10,010 tonnes prior - (CN) PBoC to drain CNY20B in 14-day repos (4th consecutive drain); Drains net CNY20B this week v drained CNY11B prior (2nd week of drain)
***Market Focal Points/Key Themes*** - Regional indices remain largely in the red despite some modest relief in the US as investors turn increasingly more cautious on emerging markets amid continued geopolitical tensions. Recall NATO is maintaining that there is a high chance of Russia sending troops into east Ukraine under the pretext of humanitarian and peacekeeping mission, even though UN Security Council was overwhelmingly opposed to this incursion. Russian Pres Putin also announced a new round of counter-sanctions banning or limiting agricultural imports from countries that have sanctioned Russia over Ukraine.
- AUD traded down some 70pips against the greenback (within 5pips of 2-month lows) to $0.9280 after a particularly disappointing set of employment data from Australia. Jobless rate rose to a 12-year high of 6.4% - the first time above that of the US since 2007 - while employment change was a slight net negative against expected rise of 13K. Full-time component gained 14.5K, however total hours worked fell for the first time in 3 months with a 14.8M decline. Participation rate rose by a decimal to 64.8%, a 4-month high. Analysts said they would not view these somewhat contradictory datapoints as the beginning of broader deterioration and the data will not produce an RBA rate cut, but also noted the outside chance of a rate hike this year has also been squashed.
- Shanghai Composite is down again after an impressive run the last couple of weeks. Fitch warned speculation in the property sector could reemerge as a result of lifting of sector curbs and easing of credit. China-based Ctrip.com was one of the most notable movers afterhours following the announcement of an expanded partnership with Priceline.com that involves a $500M investment in the company.
- Stateside, Fed's Lockhart spoke with CNBC after US market close, noting it was still a bit early to pull stimulus and that 2H 2015 is appropriate timing for rate lift. Lockhart added inflation expectations are well anchored, while forecasting annual GDP to trend near 3% trajectory. CDC also revealed the results of suspected Ebola test at Mt Sinai hospital in NY, noting the patient in question does not have the virus.
***Equities*** US markets: - CST: To acquire General Partner of Lehigh Gas Partners LP for cash, stock valued at $85M; approves $200M buyback program (8% of market cap); +14.8% afterhours - CTRP: The Priceline Group and Ctrip expand partnership; Priceline to make $500M investment that could convert into up to 10% stake; +12.3% afterhours - MDCO: FDA approves Orbactiv (oritavancin), a new antibacterial drug to treat adults with skin infections; +10.8% afterhours - JACK: Reports Q3 $0.65 v $0.57e, R$348.5M v $344Me; +7.3% afterhours - FOXA: Reports Q4 $0.42 adj v $0.38e, R$8.42B v $8.01Be; +3.7% afterhours - CTL: Reports Q2 $0.72 v $0.64e, R$4.10B v $4.50Be; +2.9% afterhours - RIG: Reports Q2 $1.61 v $1.09e, R$2.33B v $2.27Be; +2.4% afterhours - AGU: Reports Q2 $4.34 v $4.10e, R$7.34B v $7.07Be; +2.1% afterhours - VMW: Approves $1B buyback program (2.3% of market cap); +1.7% afterhours - SYMC: Reports Q1 $0.45 v $0.42e, R$1.74B v $1.66Be; +1.1% afterhours - SN: Reports Q2 $0.23 v $0.27e, R$151.7M v $142Me, Q2 Production 1.859K mboe +164% y/y, Adj EBITDA $112.5M +160% y/y; +1.1% afterhours
- ICFI: Reports Q2 $0.57 v $0.58e, R$263.9M v $262Me; -0.9% afterhours - GMCR: Reports Q3 $0.99 v $0.87e, R$1.02B v $1.04Be; -1.6% afterhours - GPOR: Reports Q2 $0.07 v $0.17e, R$114.7M v $125Me; -3.9% afterhours - ANAD: Reports Q2 -$0.09 v -$0.09e, R$23.3M v $25.6Me, guides Q3 Rev -18 to -20% q/q (only 1 est.); -8.8% afterhours - RNDY: Reports Q2 -$0.06 v $0.09e, R$971.9M v $944Me; -9.5% afterhours - BWC: Reports Q2 $0.44 (adj) v $0.50e, R$686M v $785Me; -12.6% afterhours - BRKR: Reports Q2 $0.21 v $0.19e, R$457.4M v $458Me, Lowers FY14 EPS $0.78-0.81 v $0.87e (prior $85-0.88); -12.7% afterhours - THOR: Reports Q2 $0.43 v $0.44e, R$118.1M v $130Me; Cuts FY14 guidance; announces $30M share buyback (1.6% of market cap); -26.3% afterhours
Notable movers by sector: - Consumer Discretionary: Dongpeng Holdings 3386.HK +9.7% (H1 guidance); DeNA 2432.JP -7.8% (Q1 results); Kirin Holdings 2503.JP -3.8% (H1 results); Zensho Holdings 7550.JP -7.3% (FY14/15 guidance); Yamada Denki 9831.JP +4.1% (affordable smartphone sales plan); Megmilk Snow Brand 2270.JP +4.2% (Q1 results) - Consumer staples: Coca-Cola East Japan 2580.JP -7.1% (H1 results) - Financials: Haitong Securities 6837.HK -1.4% (July Op results); Mitsui Fudosan 8801.JP -3.0% (Q1 results); Fukuoka Financial 8354.JP -2.7% (Q1 results) - Technology: Square Enix Holdings 9684.JP +10.2% (Q1 results); Simplo Technology 6121.JP +3.1% (July op results) - Telecom: NTT 9432.JP +3.1% (Q1 results)