Asia Mid-session Market Update: Yen tests ¥99.65, officials warn on excessive moves; Aussie rises to 0.7718 on better employment data
***Economic Data***
- (AU) AUSTRALIA JULY EMPLOYMENT CHANGE: +26.2K V +10.0KE; UNEMPLOYMENT RATE: 5.7% V 5.8%E
- (CN) CHINA JULY PROPERTY PRICES M/M: FALL IN 16 OUT OF 70 CITIES VS FALL IN 10 PRIOR; Y/Y: FALL IN 11 OUT OF 70 CITIES V FALL IN 12 PRIOR
- (NZ) NEW ZEALAND JULY ANZ JOB ADVERTISEMENTS M/M: 1.4% V 0.5% PRIOR
- (JP) JAPAN JULY TRADE BALANCE: ¥513.5B V ¥273.2BE; ADJ TRADE BALANCE: ¥317.6B V ¥167.7BE
- (NZ) NEW ZEALAND AUG ANZ CONSUMER CONFIDENCE INDEX: 117.7 V 118.2 PRIOR; M/M:-0.4% V -0.6% PRIOR
- (PH) PHILIPPINES Q2 INDUSTRIAL PRODUCTION 6.9% Y/Y; CONSUMER SPENDING 7.3% Y/Y
- (PH) PHILIPPINES Q2 GDP Q/Q: 1.8% V 1.8%E; Y/Y: 7.0% V 6.6%E
- (AU) Australia July RBA Gross FX Transactions (A$): -0.5B v -1.7B prior
- (JP) Japan investors bought net ¥1.30T in foreign bonds v bought ¥892B in prior week; Foreign investors bought net ¥94.7B in Japan stocks v sold ¥492B in Japan stocks in prior week
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.2%, S&P/ASX -0.6%, Kospi +0.5%, Shanghai Composite +0.1%, Hang Seng +1.7%, Sep S&P500 +0.1% at 2,182
***Commodities/Fixed Income***
- Dec gold +0.7% at $1,358/oz, Sep crude oil -0.1% at $46.72/brl,; Sep copper +0.2% at $2.17/lb; Sept Silver +1.05% at $19.85/oz
- (CN) PBOC SETS YUAN MID POINT AT 6.6273 V 6.6056 PRIOR
- (CN) PBOC to inject CNY50B in 7-day reverse repos
- (NZ) New Zealand sells NZ$150M v NZ$150M indicated in 2.75% 2025 Bonds; avg yield 2.0408%
- (JP) Japan MoF sells ¥385.7B in 3-month bills; avg yield -0.2341%; bid-to-cover 3.85x
- (JP) Japan MoF sells ¥221B in 5-yr bonds; avg yield -0.1650%; bid-to-cover 3.5x
***Market Focal Points/FX***
- Another day of mixed trade in Asia with strong data out of the Philippines and Australia. USD continued a generally weaker trend, being mostly attributed to FOMC minutes, which failed to give a signal as to when the next rate hike could be. USD/JPY tested ¥99.65, MoF's Asawaka for the second consecutive session warned on excessive fx moves. An article in the Nikkei explored the fact the yen has strengthened in August from the previous month in five out of the past nine years. The article attributes monetary policy developments in Japan and the US as part of the fuel for the speculative moves. Japan trade data showed a sharp decline in imports (-24.7%) and exports (-14.0%, 10 consecutive decline and largest decline since Oct 200). Japan PM Abe advisor Honda said the BoJ will likely take bold action next month; No need for BoJ to further lower negative deposit rate .
- Hong Kong and China markets generally trending higher with stronger earnings coming out of names like Lenovo. China July property prices showed fewer cities recording m/m gains, major cities showed more frequent increases on existing homes than new. Chinese Academy of Social Sciences (CASS) issued a report saying industrial growth may slow to 5% in June 2017 v 5% in H1 2016. Also said, China should stabilize property market while keeping its proactive fiscal policy and prudent monetary policy.
- AUD/USD tipped 0.7718 (2-day high) after Australia employment data beat expectations. Part time employment saw a huge jump to +71.6K from -33.2K prior and full time was -45.4K from +44.0K prior.
***Equities***
US equities / ADRs:
- NTAP: Reports Q1 $0.46 v $0.36e, R$1.29B v $1.26Be; +7.5% afterhours
- LB: Reports Q2 $0.70 v $0.59e, R$2.89B v $2.87Be; +3.0% afterhours
- NTES: Reports Q2 $3.70 (unclear if comp) v $2.56e, R$1.35B v $1.27Be; Raises dividend 6.8% from $0.73 to $0.78 (implied yield 1.5%); +2.7% afterhours
- CACI: Reports Q4 $2.35 adj v $2.19 y/y, R$1.11B v $1.10Be; +0.3% afterhours
- CSCO: Reports Q4 $0.63 v $0.60e, R$12.6B v $12.5Be; to eliminate up to 5.5K positions (7% of global workforce); -1.4% afterhours
- A: Reports Q3 $0.49 v $0.47e, R$1.04B v $1.04Be; -4.2% afterhours
- CERU: Phase 2 clinical trial of CRLX101 and Avastin combination in Relapsed Renal Cell Carcinoma demonstrated no statistically significant difference; -61.0% afterhours
Notable movers by sector:
- Consumer discretionary: Treasury Wine Estates TWE.AU +11.6%(FY16 result); Nexteer Automotive Group 1316.HK +23% (H1 result); Tatts Group TTS.AU -0.4% (FY16 result); Sydney Airport SYD.AU +0.1% (H1 result)
- Consumer staples: Don Quijote Co 7532.JP +0.8% (annual result)
- Financials: Ping An Insurance 2318.HK +4.0% (H1 result); Everbright Securities Co 6178.HK flat at open (H-share debut)
- Industrials: China Railway Signal & Communication Corporation 3969.HK +2.3% (H1 result); Doshisha Co 7483.JP +3.2% (share buyback)
- Technology: Tencent Holdings 700.HK +5.9% (Q2 result); Kingdee International Software Group Co 268.HK 12.9% (H1 result); Lenovo Group 992.HK +3.4% (Q1 result); IRESS IRE.AU +8.8%(H1 result); Brambles BXB.AU 0.7% (FY16 result)
- Materials: Evolution Mining EVN.AU +5.2%; Saracen Mineral SAR.AU +3.2% (gold rises); Whitehaven Coal WHC.AU +3.9% (FY16 result)
- Energy: China Coal Energy 1898.HK -0.3% (July result); Origin Energy ORG.AU -2.2% (FY16 result)
- Healthcare: Shandong Weigao Group Medical Polymer 1066.HK -3.5% (H1 result); Guangzhou Baiyunshan Pharmaceutical Holdings Co 874.HK -4.1% (H1 result)
- Telecom: China Unicom 762.HK +7.0% (H1 result)
- Utilities: Yokogawa Electric Corp 6841.JP -2.4% (Credit Suisse cuts to Neutral); Softbank 9984.JP -4.5% (said still hold out hope for deal with T-mobile)