Asia Mid-Session Market Update: Markets cautious ahead of US non-farm payrolls; regional currencies remain in tight ranges
***Economic Data***
- (KR) SOUTH KOREA Q2 FINAL GDP Q/Q: 0.8% V 0.7% PRELIM; Y/Y: 3.3% V 3.2% PRELIM
- (JP) JAPAN AUG MONETARY BASE Y/Y: 24.2% V 24.7% PRIOR; MONETARY BASE END OF PERIOD: ¥404.5T V ¥403.9T PRIOR
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.1%, S&P/ASX -0.9%, Kospi +0.1%, Shanghai Composite flat, Hang Seng +0.5%, Sep S&P500 -0.1% at 2,166
***Commodities/Fixed Income***
- Dec gold flat at $1,317/oz, Oct crude oil +0.6% at $43.44/brl, Dec copper +0.6% at $2.09/lb
- (AU) Australia MoF sells A$900M in 4.5% 2020 bonds, avg yield 1.4359%; bid-to-cover 2.09x
- (CN) PBOC to inject CNY30B in 7-day reverse repos and CNY10B in 14-day reverse repos; Drains net CNY173.5B this week v injected CNY310B prior
- (CN) PBOC SETS YUAN MID POINT AT 6.6727 V 6.6784 PRIOR
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥420B in 3-5yr JGBs, ¥430B in 5-10yr JGBs
***Market Focal Points/FX***
- Asian equity markets are flat or slightly weaker, little economic catalysts in the region left traders to shore up positions ahead this weekend's G-20 meeting and US employment data. NFP is expected +175K jobs, after +255K in July. Another positive reading later today, combined with the expected decline in the unemployment rate, will have significant impact on expectations for the timing of a Fed rate hike, either later this month (seen as less likely) or later this year (more widely favored).
Some of Australia's oil names, Woodside, -1.7%, Santos, -1% and Oil Search -0.7% were under pressure, while USD/JPY traded in a 33 pip range 103.46 to 103.13. BOJ new member Sakurai indicated was in favor of aggressive monetary easing, though should not expand stimulus recklessly to quicken the timing for achieving its 2% inflation target. Also said there was no pressing need for immediate measures. AUD/USD traded in even a tighter range. RBA's Debelle has been named Deputy Gov to incoming RBA Gov Lowe.
PBoC Deputy Gov Yi Gang said that the RMB exchange rate basically stable at a reasonable and balanced level, reiterating that China has a policy tool box to keep its currency stable. Yi also said the PBoC will maintain ample liquidity, to implement credit policy to support SMEs, especially agriculture, poverty alleviation and to create modest monetary and financial environment for supply-side reforms. China MoF's Zhu indicated that China will have a major economic meeting after G20. He stressed that major economies are separated on monetary policies and cutting overcapacity is key to supply-side reform.
***Equities***
US equities / ADRs:
- AMBA: Reports Q2 $0.54 adj v $0.37e, R$65.1M v $63.9Me, -0.4% afterhours
- PAY: Reports Q3 $0.42 v $0.40e, R$493M v $519Me; -15.9% afterhours
- CCXI: Reports initial results from ongoing Phase Ib clinical trial of CCX872 in patients with Advanced Pancreatic Cancer; Expects additional data including progression-free survival by end of 2016, -8.3% y/y
- LULU: Reports Q2 $0.38 adj v $0.38e, R$514.5M v $514Me, -8.6% afterhours
- GPS: Reports Aug SSS -3% v -1.9%e; -2.2% afterhours
- MGT: Requests withdrawal of registration statement on Form S-3; +7.5% afterhours
Notable movers by sector:
- Consumer discretionary: Tokyo Dome Corp.9681.JP +5.5% (H1 result); Sanyo Shokai 8011.JP +5.5% (Mitsubishi raise to Equalweight); V-Grass Fashion Co 603518.CN -0.3% (said to buy Teenie Weenie)
- Financials: Programmed Maintenance Services PRG.AU -4.7% (to be removed from ASX 200)
- Industrials: Mazda Motor Corp 7261.JP -1.4% (Aug result); Nippon Paint Co.4612.JP -4.3% (MUFG cuts to Neutral); Mitsubishi Motors 7211.JP +0.4% (Aug US result); Hyundai Motor Co 005380.KR +2.7% (Aug result)
- Technology: Nintendo Co. 7974.JP +2.4% (Pokemon Go sentiment); Samsung Electronics 005930.KR +0.2% (to recall all new Note 7)
- Materials: Alumina AWC.AU +6.2% (settles dispute with Alcoa); Regis Resources RRL.AU +5.2%; Saracen Mineral SAR.AU +5.7%; Evolution Mining EVN.AU +5.6% (gold miners rise)