Asian Mid-session Update: China GDP tops consensus but still slows to 6-year lows
***Economic Data***
- (CN) CHINA Q3 GDP Q/Q: 1.8% V 1.8%E; Y/Y: 6.9% (6-year low) V 6.8%E; YTD: 6.9% V 6.9%E
- (CN) CHINA SEPT YTD FIXED URBAN ASSETS Y/Y: 10.3% V 10.8%E; multi-year low
- (CN) CHINA SEPT RETAIL SALES Y/Y: 10.9% V 10.8%E; 8-month high
- (CN) CHINA SEPT INDUSTRIAL PRODUCTION Y/Y: 5.7% V 6.0%E (6-month low); YTD: 6.2% V 6.3%E
- (CN) China National Energy Administration (NEA): China Sept power consumption 456.3B Kwh, -0.2% y/y v +1.9% prior
- (NZ) NEW ZEALAND SEPT PERFORMANCE SERVICES INDEX: 59.3 V 58.5 PRIOR; Highest since Nov 2007
- (UK) UK OCT RIGHTMOVE HOUSE PRICES M/M: 0.6% v 0.9% PRIOR, Y/Y 5.6% (3-month low) v 6.4% PRIOR
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.6%, S&P/ASX +0.2%, Kospi -0.1%, Shanghai Composite +0.9%, Hang Seng flat, Dec S&P500 -0.2% at 2,021
***Commodities/Fixed Income***
- Dec gold -0.9% at $1,172/oz, Dec crude oil -0.3% at $47.58/brl, Dec copper -0.5% at $2.39/lb
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3527 v 6.3436 prior setting; weakest Yuan setting since Sept 30th
- (CN) China MOF sells 30-yr bonds, avg yield 3.74%
- (KR) South Korea sells KRW800B in 10-yr govt bonds, avg yield 2.105%
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥400B in 3-5yr JGBs, ¥400B in 5-10yr JGBs
***Market Focal Points/FX***
- Shanghai Composite is leading regional indices after a mixed set of economic data out of China. Q3 GDP was the most critical figure, marginally beating expectations at 6.9%, and the markets responded positively even though this rate of growth is the lowest in 6 years. AUD/USD jumped about 40pips above 0.7280 in the wake of the data, NZD/USD rallied some 25pips above 0.6810, and USD/JPY was up over 40pips above 119.60.
- Additional economic datapoints for September are giving investors less reason for optimism, and in the eyes of some analysts, are showing sufficient divergence to question the accuracy of the GDP print. Fixed asset investment growth printed a new multi-year low, as property investment slowed and property construction remained in the red. New home sales value growth also slowed to 18.2% from 18.7%. Industrial output data were similarly downbeat, coming in at a 6-month low of 5.7%. Power generation and steel output were down y/y, while oil production growth slowed to 2.7% from 3.6%. China Stats Bureau (NBS) spokesperson Sheng spoke after the release, stating the economy is still faced with downward pressure and also pointing to global weakness resulting in large pressure on export space. Looking ahead however, Sheng said the economy would maintain stable growth in Q4 and 2016. Note that going into the release, premier Li stated it would not be easy for China to achieve 7% (target) GDP, but that it was acceptable for growth to be a little higher or lower than 7% as long as employment remains adequate and incomes continue growing. Separately, a researcher with NDRC said China must boost infrastructure investment to help stabilise growth.
- Outside of Chinese economic figures, BOJ Gov Kuroda spoke at a quarterly meeting of the central bank's regional branch managers. Kuroda largely reiterated some of the most recent BOJ talking points, stating the economy is recovering moderately, emerging market slowdown is evident in exports and output, and also anticipating inflation to remain around zero for the time being.
***Equities***
Notable movers by sector:
- Consumer discretionary: Sands China 1928.HK -3.6% (CFO to step down); Tsingtao Brewery Co 168.HK -1.3% (sets up JV with Suntory China); China Southern Airlines 1055.HK +1.5% (exec under investigation); Peak Sports Products Co 1968.HK +1.9% (Q3 result)
- Financials: China Galaxy Securities Co 6881.HK -0.9% (Sept result); China Overseas Land 688.HK -1.7% (Sept result); China Overseas Grand Oceans Group 81.HK +2.0% (Sept result)
- Industrials: Zhuzhou CSR Times Electric Co 3898.HK -6.3% (9-month result); Qingdao TGOOD Electric Co 300001.CN +1.9% (Q3 result); Cardno Ltd CDD.AU +9.2% (Crescent sweetened bid)
- Technology: China Electronics Corp Holdings Co 85.HK+7.8% (possible disposal of unit); Tencent Holdings 700.HK -0.1% (partnership with JD)
- Materials: Arrium ARI.AU +9.5% (Q1 result)
- Energy: S-Oil Corp 010950.KR +1.2% (Q3 result)