Asian Mid-session Update: Shanghai Composite extending impressive gains; Gov Stevens maintains RBA stands ready to ease
***Economic Data***
- (ID) INDONESIA Q3 GDP Q/Q: 3.2% V 3.3%E; Y/Y: 4.7% V 4.8%E (matches slowest annual pace since 2009)
- (PH) PHILIPPINES OCT CPI M/M: 0.1% V 0.2%E; Y/Y: 0.4% V 0.4%E
- (TW) Taiwan Oct CPI Y/Y: 0.3% v 0.2%e; WPI Y/Y: -8.5% v -8.2%e
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +1.1%, S&P/ASX -1.2%, Kospi -0.3%, Shanghai Composite +2.7%, Hang Seng +0.2%, Dec S&P500 flat at 2,095
***Commodities/Fixed Income***
- Dec gold +0.4% at $1,110/oz, Dec crude oil +0.4% at $46.50/brl, Dec copper flat at $2.32/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 6.2 tonnes to 680.1 tonnes; lowest since Sept 23rd
- (CN) Platts: China oil demand grew 2% y/y in Sept
- JGB: (JP) Japan MoF sells ¥2.18T in 10-yr 0.4% JGBs; Avg yield: 0.318% v 0.336% prior; bid to cover: 2.80 v 3.03x prior
- (CN) PBoC to inject CNY10B in 7-day reverse repos (36th consecutive injection); Maintains neutral position this week v drained CNY25B prior
***Market Focal Points/FX***
- Shanghai Composite is building on yesterday's massive 4.3% jump - the biggest since mid-Sept - with another outsized 3% gains, taking the index to its highest levels since late August. Yesterday, the strength in China (particularly Hong Kong) were attributed to Shenzhen-HK connect being open before the end of the year, even though later reports indicated those comments had been made over 5 months ago. Today, investors are also cheering cross-straits meeting with Taiwan leaders potentially opening the door to more mainland investments higher up the value chain. Investors are also shrugging Q3 NPLs hitting record highs of 1.59%, along with mixed comments from MIIT acknowledging challenging conditions in China industrial sector while also estimating 2015 industrial production growth to be over 6% y/y.
- BOJ's early Oct meeting minutes help explain the policy hold at the more resent decision last week. Many BOJ members agreed the current easing has exerted intended effects, and that inflation continues to improve as expectations are rising on a whole. On the corporate front, Takata shares continue to plummet from its defective airbags scandal, as more mainstream automakers joined Honda in discontinued use of its products. Shares of Honda were softer as well after reporting H1 results overnight that missed consensus.
- RBA Gov Stevens followed up the central bank's "dovish hold" this week with similarly-tilted commentary. Stevens maintained that any new policy move would likely still be an easing, and that the RBA is not constrained by rising inflation. Moreover, he noted uncertainty over growth path in China and the extent of recovery in Australia property markets.
- AUD/USD hit session lows after the Stevens comments below 0.7130, down over 20pips, before seeing a modest bounce. USD/JPY was also in a 20pip range below 121.60, while EUR/USD consolidated a stab below 1.0850 in late US hours - the lowest level in about 3 months. Late in the US hours, Fed's Dudley agreed with Chair Yellen that the December meeting is 'live' for possible rate lift off, but also preferred to see more wage inflation. Fed vice chair Fischer was seemingly less dovish, noting there wasn't much evidence than inflation is too low.
***Equities***
US equities / ADRs:
- AWAY: Reports Q3 $0.24 v $0.21e, R$130.7M v $130Me; enters agreement to be acquired by Expedia in cash and stock equity value $3.9B; +21.7% afterhours
- SCSS: Reports Q3 $0.62 v $0.41e, R$374M v $356Me; +12.9% afterhours
- HABT: Reports Q3 $0.06 v $0.05e, R$58.6M v $57.5Me; +8.0% afterhours
- FLT: Reports Q3 $1.67 v $1.62e, R$419.8M v $429Me; +8.3% afterhours
- GDDY: Reports Q3 -$0.04 v -$0.09e, R$411M v $408Me; +7.6% afterhours
- FB: Reports Q3 $0.57 v $0.52e, R$4.50B v $4.39Be; +3.8% afterhours
- CTL: Reports Q3 $0.70 v $0.69e, R$4.6B v $4.55Be; reviewing strategic alternatives for global data centers; +1.6% afterhours
- PRU: Reports Q3 $2.40 v $2.43e, R$11.1B v $11.1Be; -0.1% afterhours
- RIG: Reports Q3 $0.88 v $0.67e, R$1.61B v $1.59Be; Announces $40M share repurchase program (3.5% of market cap); -0.5% afterhours
- HOLX: Reports Q4 $0.43 v $0.42e, R$703M v $692Me; -3.1% afterhours
- MRO: Reports Q3 -$0.20 v -$0.42e, R$1.32B v $1.40Be; -3.3% afterhours
- QCOM: Reports Q4 $0.91 v $0.86e, R$5.46B v $5.21Be; -5.3% afterhours
- WFM: Reports Q4 $0.30 (adj) v $0.35e, R$3.44B v $3.48Be; -6.2% afterhours
- CF: Reports Q3 $0.39 v $0.74e, R$927M v $924Me; -9.2% afterhours
- LCI: Reports Q1 $0.99 v $0.89e, R$106.4M v $104Me; -14.4% afterhours
- FEYE: Reports Q3 -$0.37 v -$0.45e, R$165.6M v $167Me; -14.2% afterhours
- GUID: Reports Q3 -$0.03 v -$0.05e, R$26.8M v $28.0Me; -21.5% afterhours
Notable movers by sector:
- Consumer discretionary: China Southern Airlines Co 600029.CN +8.2 (Chairman under probe); Alibaba Pictures Group 1060.HK +3.8% (acquisition); Asahi Group Holdings 2502.JP +4.8% (9-momth result); Japan Tobacco Inc 2914.JP +7.5% (9-month result)
- Consumer staples: Warrnambool Cheese & Butter WCB.AU +1.6% (H1 result, no interim div)
- Financials: Central China Real Estate 832.HK -0.6% (Oct result); CITIC Securities 6030.HK +3.7%, Haitong Securities 600837.CN +8.7% (sentiment)
- Industrials: Chongqing Changan Automobile Co 000625.CN +4.2% (Oct result); Beiqi Foton Motor Co 600166.CN +2.5% (awarded contracts); Samsung Heavy Industries 010140.KR -3.3% (revises Q3 result); Mazda Motor Corp 7261.JP +1.1% (H1 result); Fuji Heavy Industries 7270.JP +2.3% (H1 result); Virgin Australia VAH.AU -1.0% (Q1 result, guidance)
- Technology: Toshiba Corporation 6502.JP -4.0% (H1 result speculation); Xero XRO.AU +1.9% (H1 result)
- Materials: Mitsubishi Corp 8058.JP -5.4% (H1 result); Sojitz 2768.JP +2.7% (H1 result)
- Energy: Idemitsu Kosan Co 5019.JP -3.3% (H1 result)
- Telecom: Softbank Corp 9984.JP -1.2% (H1 result); China Unicom 600050.CN +10.0% (MIIT comment)