Asian Mid-session Update: China Services and Hong Kong PMIs rebound; Australia trade deficit narrows
***Economic Data***
- (CN) CHINA OCT CAIXIN PMI SERVICES: 52.0 V 50.5 PRIOR; 3-month high
- (HK) HONG KONG OCT PMI: 46.6 v 45.7 PRIOR; 8th month of contraction
- (AU) AUSTRALIA SEPT TRADE BALANCE (A$): -2.32B V -2.90BE; smallest deficit in 6 months
- (AU) AUSTRALIA SEPT RETAIL SALES M/M: 0.4% V 0.4%E
- (AU) AUSTRALIA OCT AIG PERF OF SERVICES INDEX: 48.9 V 52.3 PRIOR; 1st contraction in 5 months
- (NZ) NEW ZEALAND Q3 EMPLOYMENT CHANGE Q/Q: -0.4% (first decline since Q2 of 2013) V +0.4%E; Y/Y: 1.5% V 2.5%E; Participation rate 68.6% v 69.3%e (2-year low)
- (NZ) NEW ZEALAND Q3 UNEMPLOYMENT RATE: 6.0% V 6.0%E; Avg hourly earnings 0.9% v 1.1%e
- (JP) JAPAN OCT NIKKEI SERVICES PMI: 52.2 V 51.4 PRIOR; COMPOSITE PMI: 52.3 V 51.2 PRIOR
- (JP) JAPAN OCT MONETARY BASE Y/Y: 32.5% v 35.1% PRIOR; MONETARY BASE END OF PERIOD: ¥344.4T v ¥338.4T PRIOR
- (JP) JAPAN OCT CONSUMER CONFIDENCE: 41.5 V 40.8E
- (IN) INDIA OCT PMI SERVICES: 53.2 V 51.3 PRIOR (4th straight month of expansion and highest since Feb)
- (UK) SEPT BRC SHOP PRICE INDEX Y/Y: -1.8% V -1.9% PRIOR; 30th month of decline
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +2.2%, S&P/ASX +0.1%, Kospi +0.1%, Shanghai Composite +2.6%, Hang Seng +3.1%, Dec S&P500 +0.2% at 2,106
***Commodities/Fixed Income***
- Dec gold +0.6% at $1,120/oz, Dec crude oil -0.3% at $47.74/brl, Dec copper +0.2% at $2.33/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 3.0 tonnes to 686.3 tonnes; lowest since Sept 29th
- (US) API Petroleum Inventories: Crude: +2.8M v +2.5Me; 4th straight build
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥400B in 3-5yr JGBs, ¥240B in 10-25yr JGBs and ¥140B in JGBs with maturity over 25-yr
- (CN) China MOF sells 10-yr bonds, avg yield 3.092%
- (AU) Australia MoF (AOFM) sells A$900M in 2.75% 2024 Bonds; avg yield: 2.6348%; bid-to-cover: 2.89x
***Market Focal Points/FX***
- Asian markets are broadly higher, tracking another session of strong gains on Wall St, with Shanghai Composite and the Hang Seng leading the way. China Services PMI registered a notable bounce higher, in contrast with continued weakness in the manufacturing space. Caixin economists said the data show that previous stimulus policies have begun to take effect, while the economic structure steadily improved. Hong Kong PMI was in contraction for 8th month but also rose for the 2nd straight month. Resident economist did not that economy will likely contract, as "sharper reduction in selling prices was not sufficient enough to attract new clients." Relative strength in the Hang Seng index was also attributed to reports of PBoC Gov Zhou announcing plans to complete Shenzhen-Hong Kong stock link before the end of the year. However, reports late in the day indicated those remarks were made over 5 months ago, and the Hang Seng came off its highs in afternoon trade.
- Australia trade and retail data for September were surprisingly benign. Retail spending was in line with estimates, while trade deficit was the smallest in 6 months as Exports and Imports component growth saw 3-month highs. Exports to China were especially notable, rising to A$7.49B v A$6.95B prior, a 16-month high. AUD/USD rose some 40pips above $0.7220 in the wake of the data. In contrast, NZD/USD fell some 60pips below $0.6640 after disappointing quarterly employment data, adding to the losses earlier following another decline in GDT auction dairy prices. Economist with ASB said the latest New Zealand employment data reinforces the view that RBNZ should cut rates again in December.
***Equities***
US equities / ADRs:
- DPLO: Reports Q3 $0.26 v $0.16e, R$947M v $931Me; +11.9% afterhours
- TSLA: Reports Q3 -$0.58 v -$0.53e, R$1.24B v $1.21Be; +9.0% afterhours
- PBPB: Reports Q3 $0.05 v $0.09e, R$96M v $95.8Me; +5.8% afterhours
- TMH: Reports Q3 $0.68 v $0.71e, R$899.2M v $892Me; +3.2% afterhours
- CBS: Reports Q3 $0.88 v $0.81e, R$3.26B v $3.27Be; +3.1% afterhours
- HLF: Reports Q3 $1.28 v $1.07e, R$1.10B v $1.15Be; -2.7% afterhours
- PAA: Reports Q3 $0.28 v $0.27e, R$5.55B v $5.98Be; -4.5% afterhours
- ETSY: Reports Q3 -$0.06 v -$0.03e, R$65.7M v $68.5Me; -6.9% afterhours
- MTZ: Reports Q3 $0.26 v $0.33e, R$1.11B v $1.14Be; -7.1% afterhours
- CERN: Reports Q3 $0.54 v $0.55e, R$1.13B v $1.17Be; -9.7% afterhours
- DSW: Announces CEO Transition; guides lower; raises buyback by $200M (10% of market cap); -11.5% afterhours
- QUAD: Reports Q3 $0.14 adj v $0.51 y/y, R$1.16B v $1.24B y/y; -13.0% afterhours
- ENPH: Reports Q3 $0.01 v $0.01e, R$102.9M v $104Me; -19.9% afterhours
- X: Reports Q3 -$0.70 adj v -$0.28e, R$2.83B v $2.95Be; -11.9% afterhours
- GRPN: Reports Q3 $0.05 v $0.01e, R$713M v $730Me; names Rich Williams as new CEO, effective immediately; -25.6% afterhours
Notable movers by sector:
- Consumer discretionary: SJM Holdings 880.HK -0.9% (Q3 result)
- Financials: China Vanke 000002.CN +2.0% (Oct result); Guotai Junan 601211.CN +6.5%, Citic Securities 6030.HK +9.0%, Haitong Securities 600837.CN +4.8% (attribution to PBoC Gov's comment on stock connect); Scentre Group SCG.AU +1.5% (Q3 result)
- Industrials: Geely Automobile Holdings 175.HK +3.1% (Oct sales); Ssangyong Motor Co 003620.KR +0.5% (Q3 result); Hyundai Motor Co 005380.KR +2.8% (Oct US sales); CSR Ltd CSR.AU +5.3% (H1 result); Takata Corp 7312.JP -14.1% (signs consent order and penalty payment)
- Technology: NCsoft Corp 036570.KR +9.8% (Q3 result); Pegatron Corp 4938.TW +0.5% (frozen hiring in Shanghai)
- Materials: Yodogawa Steel Works 5451.JP +7.8% (H1 result)
- Energy: Santos STO.AU -2.9% (rights placement); JX Holdings 5020.JP +3.7% (H1 result); CNOOC 883.HK +6.4%, PetroChina 601857.CN +1.5% (NDRC raises fuel prices)
- Healthcare: NIB Holdings NHF.AU +3.9% (guidance)
- Telecom: SK Telecom 017670.KR +0.7% (speculation to split up company); KDDI Corp 9433.JP +2.7% (H1 result speculation)