Asian Mid-session Update: Large drop in imports helps China trade surplus top estimates; Japan Q2 final GDP revised higher
***Economic Data***
- (CN) CHINA AUG TRADE BALANCE: $60.2B V $51.5BE
- (JP) JAPAN Q2 FINAL GDP Q/Q: -0.3% V -0.5%E; ANNUALIZED GDP: -1.2% V -1.8%E
- (JP) JAPAN AUG BANK LENDING (INCL TRUSTS): 2.7% V 2.6%E; BANK LENDING (EX- TRUSTS): 2.8% V 2.7% PRIOR
- (JP) JAPAN JULY BOP CURRENT ACCOUNT BALANCE: ¥1.81T V ¥1.73TE; BOP ADJUSTED CURRENT ACCOUNT ¥1.32T V ¥1.26TE; TRADE BALANCE BOP BASIS: -¥108B V -¥80BE
- (AU) AUSTRALIA AUG NAB BUSINESS CONFIDENCE: 1 (2-year low) V 4 PRIOR; CONDITIONS: 11 V 6 PRIOR
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 106.7 v 113.3 prior; 14-month low
- (NZ) NEW ZEALAND Q2 MANUFACTURING ACTIVITY Q/Q: +0.4% V -2.6% PRIOR (1st rise in a year); MANUFACTURING ACTIVITY VOLUME Q/Q: -0.2% V -0.3% PRIOR
- (NZ) New Zealand AUG ANZ Heavy Truckometer m/m: -0.6% v -0.3% prior; 2nd straight decline
- (UK) UK AUG BRC SHOP PRICE INDEX Y/Y: -1.0% V +0.9%E
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.8%, S&P/ASX +0.9%, Kospi -0.4%, Shanghai Composite -0.7%, Hang Seng +0.3%, Sept S&P500 +0.7% at 1,935
***Commodities/Fixed Income***
- Dec gold -0.1% at $1,120/oz, Oct crude oil -2.9% at $44.72/brl, Dec copper +1.4% at $2.34/lb
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3639 v 6.3584 prior setting; first weaker Yuan setting in 6 sessions
- (CN) PBoC to inject CNY150B in 7-day reverse repos (21st consecutive injection)
***Market Focal Points/FX***
- Chinese currency devaluation last month that followed disappointing trade data has yet to yield much positive result. China trade surplus again topped consensus, but internal components remained soft. Exports decline of 5.5% was worse than expected 5%, while Imports component decline was more than double than anticipated. Exports to EU and Japan were not as bad as the prior month at -7.5% v -12.3% prior and -5.9% v -13.0% prior, but imports of key materials like crude oil and iron ore saw little improvement. AUD/USD fell some 30pips on the release below $0.6940, and Shanghai Composite has entered its midday break down over 1% near the session lows. Also of note in China, ADB Pres Nakao noted the country's economic slowdown is driven by rising wages and by a working-age population that is nearing its peak, but also added the property market is regaining momentum.
- Japan put out its Q2 Final GDP showing a smaller than initially reported decline. The two key components were little changed at Private consumption decline was -0.7% v -0.8%e v -0.8% prelim and CAPEX -0.9% v -0.9%e, v -0.1% prelim. Commenting after the release, Econ Min Amari said GDO revision was mainly due to inventories, urging Japan companies to invest their record-high earnings into more capex. Japan PM Abe also secured his 2nd term, running unopposed in LDP party leadership vote. Speaking after the results, Abe said his Abenomics policies are only halfway through, just as more critics of his agenda emerge.
- Australia's energy sector is in focus on the M&A front. Oil Search is up sharply after confirming press speculation that Woodside Petroleum has bid for the company in an all-stock non-binding one for four offer.
***Equities***
Notable movers by sector:
- Consumer discretionary: Skyworth Digital 751.HK +7.3% (Aug result)
- Financials: Evergrande Real Estate Group 3333.HK +1.3% (Aug result); CITIC Securities 600030.CN -1.7% (Aug result); Poly Real Estate Group Co 600048.CN -1.7% (Aug result); Haitong Securities 600837.CN -0.4% (Aug result); Huatai Securities Co 601688.CN -2.4% (Aug result)
- Industrials: Great Wall Motor 2333.HK +14.1% (Aug result); Geely Automobile Holdings 175.HK +8.5% (Aug result); Chongqing Changan Automobile Co 000625.CN -1.6% (Aug result); Guangzhou Automobile Group 2238.HK +3.1% (Aug result); Dongfeng Motor 489.HK +5.4% (Aug result)
- Technology: AU Optronics 2409.TW +1.5% (Aug result); Advanced Semiconductor Engineering 2311.TW +1.8% (Aug result)
- Energy: GCL-Poly Energy Holdings 3800.HK +4.2% (asset disposal); Woodside Petroleum WPL.AU -3.0%, Oil Search OSH.AU +16.6% (WPL makes non-binding offer); Santos Ltd STO.AU +8.6% (said to boost asset sales)
- Utilities: China Merchants Energy Shipping Co 601872.CN -4.8% (clarification on merger speculation)