Asia Mid-Session Market Update: Oil falls after OPEC talks in Vienna yield no agreements; Japan shippers rally on cooperation; DBS to buy ANZ Asia assets
***Friday US markets on close: Dow -0.1%, S&P500 -0.3%, Nasdaq -0.5%***
- At the close: VIX 16.19 (+0.8pts); Treasuries: 2-yr 0.86% (flat), 10-yr 1.84% (flat), 30-yr 2.62% (+2bp)
- Best Sector in S&P500: Industrials
- Worst Sector in S&P500: Healthcare
***Weekend US Corporate Headlines***
- BHI: GE said to combine its oil and gas operations with Baker Hughes; Deal announcement expected on Monday - financial press
- RRR: Deutsche Bank said to sell its 17% stake in Red Rock Resorts for about $400M to help address concerns about its balance sheet - FT
- TWX: Goldman Sachs said to persuade Apple to make a rival bid for Time Warner - NY Post
- HON: Honeywell's Business Aviation Forecast sees 8,600 deliveries Of new business jets valued At $255B through 2026
***Asia Session Notable Observations, Speakers and Press***
- OPEC talks in Vienna yielded NO DEAL to limit oil output; Iraq and Iran remain in dispute about production cuts, not ready to freeze output - press
- (UK) BOE Gov Carney committed to serving his 8-year term; Expected to make an announce this week to end speculation he would step down - FT
- (CN) Political Bureau of the Communist Party of China (CPC) Central Committee: Reiterates stance that China to continue to implement proactive fiscal policies and maintain prudent monetary policy - press
- (CN) NDRC: China Sept railway coal transport volume 158Mt, +2% y/y
- (JP) Japan's top 3 shipping companies merging their container operations into a JV; Total investment for 3 companies at ¥300B; Expect to realize benefit of about ¥110B annually.
- (JP) According to a Nikkei survey, only 38% of Japanese public supports Parliament approving TPP agreement; 35% are opposed - Nikkei
- (US) FBI said to review about 650K emails on the laptop of former Congressman Anthony Weier, the former husband of Hillary Clinton's close aide Huma Abedin - US press
***Asian Equity Markets (00:30ET)***
- Nikkei225 -0.3%, S&P/ASX +0.8%, Kospi -0.6%, Shanghai Composite -0.5%, Hang Seng +0.1%
***FX ranges/Commodities/Futures/Fixed Income (00:30ET):***
- EUR 1.0960-1.0990; JPY 104.40-104.95; AUD 0.7580-0.7615; NZD 0.7140-0.7165
- Dec gold +0.1% at $1,278/oz, Dec crude oil -0.4% at $48.50/brl, Dec copper -0.3% at $2.19/lb
- Equity Futures: S&P500 +0.2%, Dax +0.2%, FTSE100 +0.2%
- USD/CNY: *(CN) PBOC SETS YUAN MID POINT AT 6.7641 V 6.7858 PRIOR; strongest CNY setting since Oct 21st
- (CN) PBOC to inject CNY100B in 7-day reverse repos, CNY70B in 14-day reverse repos, and CNY20B in 28-day reverse repos
- (CN) PBoC adviser: Yuan should not follow USD and should not be tied to basket of currencies - Chinese press
***Key economic data:***
- (JP) JAPAN SEPT VEHICLE PRODUCTION Y/Y: 1.4% V 8.8% PRIOR
- (JP) JAPAN SEPT PRELIMINARY INDUSTRIAL PRODUCTION M/M: 0.0% V 0.9%E; Y/Y: 0.9% V 1.9%E
- (JP) JAPAN SEPT RETAIL SALES M/M: 0.0% V 0.2%E; RETAIL TRADE Y/Y: -1.9% V -1.8%E
- (AU) AUSTRALIA OCT MELBOURNE INSTITUTE INFLATION M/M: 0.2% V 0.4% PRIOR; Y/Y: 1.5% (4-month high) V 1.3% PRIOR
- (AU) AUSTRALIA SEPT PRIVATE SECTOR CREDIT M/M: 0.4% V 0.4%E; Y/Y: 5.4% V 5.5%E
- (NZ) NEW ZEALAND OCT ANZ ACTIVITY OUTLOOK: 38.4 V 42.4 PRIOR; BUSINESS CONFIDENCE: 24.5 V 27.9 PRIOR
- (NZ) NEW ZEALAND SEPT BUILDING PERMITS M/M: +0.2% V -1.5% PRIOR; first increase in 2 months
- (KR) SOUTH KOREA SEPT INDUSTRIAL PRODUCTION M/M: +0.3% V -0.2%E; Y/Y: -2.0% V -1.1%E
***Asia movers***
- Consumer discretionary: Qantas Airways QAN.AU +2.2% (Q1 result); SAIC Motor Corp 600104.CN +1.2% (Q3 result)
- Financials: ANZ Bank ANZ.AU +1.1% (DBS to acquire Asia assets); AIA Group 1299.HK -5.8% (China banned some insurance product purchase in Hong Kong); ICBC 1398.HK +1.7% (Q3 result); Bank of Communications 3328.HK +2.6% (Q3 result)
- Industrials: Boral BLD.AU -1.3% (divestment); BYD Company 1211.HK -0.8% (Q3 result); Nippon Yusen 9101.JP +6.9%, Mitsui Osk Lines 9104.JP +8.0%, Kawasaki Kisen Kaisha 9107.JP +3.9% (Japan top shipping companies to merge container operations); Guangzhou Automobile Group 2238.HK -10.9% (9-month result)
- Technology: Haier Electronics Group 1169.HK +3.1% (Q3 result); Toshiba Corporation 6502.JP +0.8% (raises guidance)
- Materials: RUSAL 486.HK +0.4% (Q3 result); Newcrest Mining NCM.AU +5.2% (gold rises); Nippon Steel & Sumitomo Metal Corp 5401.JP -0.3% (may cut guidance)
OZ Minerals OZL.AU +4.5% (copper rises); Orocobre ORE.AU +21.7% (Q3 result)
- Energy: Beach Energy BPT.AU -3.3%, PetroChina 857.HK -0.7%, (oil extends decline); Origin Energy ORG.AU -0.6% (Q1 result)
- Healthcare: Sinopharm Group Co 1099.HK +0.7% (9-month result)
- Telecom: NTT DoCoMo Inc 9437.JP +0.8% (raises guidance)
- Utilities: Hokkaido Electric Power Co. 9509.JP -6.1% (H1 result)