Asian Mid-session Update: Australia unemployment rises as labor force recovers; China considering resuming review of secondary offerings
***Economic Data***
- (AU) AUSTRALIA JULY EMPLOYMENT CHANGE: +38.5K V +10KE; UNEMPLOYMENT RATE: 6.3% (6-month high) V 6.1%E
- (JP) Japan July Tokyo Average Office Vacancies: 4.9% v 5.1% prior
- (TH) Thailand July Consumer Confidence: 73.4 v 74.4 prior
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +0.8%, S&P/ASX -0.7%, Kospi -0.4%, Shanghai Composite +0.2%, Hang Seng -0.4%, Sept S&P500 flat at 2,092
***Commodities/Fixed Income***
- Dec gold -0.1% at $1,084/oz, Sept crude oil +0.1% at $45.18/brl, Sept copper +0.4% at $2.35/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 4.8 tonnes to 667.9 tonnes; lowest since Sept 2008
- (CN) PBoC to inject CNY35B in 7-day reverse repos (13th consecutive injection); Drains net CNY5B (first drain in 3 weeks) this week v injected CNY20B prior
- (JP) Japan investors bought net ¥119.8B in foreign bonds V sold ¥21.7B in prior week; Foreign investors sold net ¥2.8B in Japan stocks v sold ¥82.1B in prior week
***Market Focal Points/FX***
- Asian equity markets were mixed, similarly to the Wednesday Wall St session where strong Services PMI was overshadowed by a fairly subdued ADP jobs report. In the early going, Japan outperformed amid ongoing weakness in JPY, with USD/JPY testing multi-week highs of 125. S&P/ASX was softer as the rout in commodities continues - Crude Oil tested below $45, metals were modestly lower, and miners struggle (ABX cut its dividend 60%).
- Australia employment data continued to show signs of recovery, reflecting more upbeat sentiment expressed by the RBA this week. Employment change was much higher than expected at 38.5K. And although the unemployment rate hit a 6-month high, participation rate rose to a 2-year high of 65.1% from 64.8% prior. AUD/USD spiked up 30pips to 0.7380 on the release but quickly pared those gains. Separately, RBA Head of Financial Stability Ellis remarked that Housing demand is boosted by population and rate cuts, also noting elevated investment demand locking out first time buyers.
- China State Researcher Zhu saw H2 GDP around 7% - in line with recent estimates - but also warned some further slowdown could materialize in 2016 amid ongoing deflation prassure and market turbulence. Also of note, CSRC was reportedly looking to resume review of secondary stock offerings, but did not provide an indication when IPO process will resume. Another Chinese press report stated the govt has started drafting property tax law, including provisions in its legislative plan to be unveiled this week.
***Equities***
US equities / ADRs:
- RAIL: Reports Q2 $0.60 v $0.41e, R$235.6M v $202Me; +11.6% afterhours
- HLF: Reports Q2 $1.24 v $1.13e, R$1.16B v $1.15Be; +7.5% afterhours
- RIG: Reports Q2 $1.11 v $0.50e, R$1.88B v $1.70Be; +4.1% afterhours
- TSO: Reports Q2 $4.62 (adj) v $4.04e, R$8.23B v $6.97Be; +2.9% afterhours
- CF: Reports Q2 $1.49 v $1.45e, R$1.31B v $1.35Be; +1.5% afterhours
- PRU: Reports Q2 $2.91 v $2.46e, R$12.5B v $11.2Be; +1.4% afterhours
- ABX: Reports Q2 $0.05 v $0.05e, R$2.23B v $2.21Be; Cuts quarterly dividend 60% to $0.02 from $0.05, implied yield 1.2%; +0.9% afterhours
- CBS: Reports Q2 $0.74 v $0.72e, R$3.22B v $3.24Be; -1.8% afterhours
- FOXA: Reports Q4 $0.39 v $0.37e, R$6.21B v $6.29Be; Announces $5B buyback plan (12.5% of shares outstanding); -3.6% afterhours
- TSLA: Reports Q2 -$0.48 v -$0.57e, R$955M v $1.16Be; -5.6% afterhours
- CTL: Reports Q2 $0.55 v $0.61e, R$4.42B v $4.44Be; -6.4% afterhours
- GDDY: Reports Q2 -$0.46 v -$0.17e, R$394.5M v $393Me; -7.5% afterhours
- FIT: Reports Q2 $0.21 v $0.08e, R$400M v $322Me (1 est); -13.0% afterhours
- GMCR: Reports Q3 $0.80 v $0.79e, R$969.5M v $1.05Be; -29.0% afterhours
Notable movers by sector:
- Consumer discretionary: Asahi Group Holdings 2502.JP +0.4% (H1 result); Kirin Holdings Co 2503.JP -3.8% (H1 result); China Automotive Engineering Research Institute Co 601965.CN -4.7% (H1 result); Guirenniao Co Ltd 603555.CN -3.3% (H1 result); Songcheng Performance Development Co 300144.CN +3.9% (H1 result); Anta Sports Products 2020.HK +5.5% (H1 result); China Yongda Automoviles Services Holdings 3669.HK +3.8% (strategic agreement with Alibaba)
- Financials: Central China Real Estate 832.HK +1.7% (July result); Everbright Securities 601788.CN -2.5% (H1 result, lowers leverage); Future Land Development Holdings 1030.HK -1.6% (July result)
- Industrials: Mitsubishi Chemical Holdings 4188.JP +1.1% (Q1 result); Nissan Motor Co 7201.JP +2.0% (July China sales); Downer EDI DOW.AU -9.4% (FY15 result); AVIC International Holding HK 232.HK +5.6% (H1 guidance); Harbin Electric Co 1133.HK -2.5% (H1 guidance); Guangzhou Automobile Group 2238.HK +0.8% (July result); CRRC Corp 1766.HK +2.3% (awarded contract)
- Technology: Talkweb Information System Co 002261.CN -3.0% (H1 result)
- Materials: Marubeni Corp 8002.JP +1.4% (Q1 result); Fortescue Metals Group FMG.AU +1.6% (investment speculation)
-Utilities: Korea Electric Power Corp 015760.KR +1.7% (Q2 result); Zhejiang Weixing New Building Materials Co 002372.CN +5.3% (H1 result)
- Energy: Beijing Haohua Energy Resource 601101.CN -0.5% (H1 result)
- Telecom: HKT Trust 6823.HK +2.9% (H1 result)