Asian Mid-session Update: Australia employment soars, sending AUD currency and bond rates higher; BOK on hold; Lenovo loss smaller than expected
***Economic Data***
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50%; AS EXPECTED
- (AU) AUSTRALIA OCT EMPLOYMENT CHANGE: 58.6K (highest since Mar 2012) V +15.0KE; UNEMPLOYMENT RATE: 5.9% (5-month low; Matches lowest level since Nov 2013) V 6.2%E
- (AU) AUSTRALIA NOV CONSUMER INFLATION EXPECTATION: 3.5% V 3.5% PRIOR
- (NZ) NEW ZEALAND NOV ANZ CONSUMER CONFIDENCE INDEX: 122.7 V 114.9 PRIOR; M/M: 6.8% V +3.7% PRIOR
- (NZ) NEW ZEALAND OCT BUSINESS MANUFACTURING PMI: 53.3 V 55.0 PRIOR
- (NZ) NEW ZEALAND OCT FOOD PRICES M/M: -1.2% V -0.5% PRIOR; 3rd consecutive decline
- (JP) JAPAN OCT PPI M/M: -0.6% (5th straight decline) V -0.4%E; Y/Y: -3.8% (7th straight decline) V -3.5%E
- (JP) JAPAN SEPT MACHINE ORDERS M/M: 7.5% (first rise in 4 months) V 3.1%E; Y/Y: -1.7% (2nd consecutive decline) V -4.6%E
- (CN) China Oct fiscal revenue CNY1.44T, +8.7% y/y v 9.4% prior, fiscal spending CNY1.35T, +36.1% y/y v 26.9% prior
- (UK) UK OCT RICS HOUSE PRICE BALANCE: 49% V 45%E
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 flat, S&P/ASX +0.1%, Kospi flat, Shanghai Composite -1.0%, Hang Seng +1.0%, Dec S&P500 +0.2% at 2,073
***Commodities/Fixed Income***
- Dec gold +0.2% at $1,087/oz, Dec crude oil +0.6% at $43.17/brl, Dec copper -0.1% at $2.21/lb
- JGB: (JP) Japan's MOF sells 30-year JGB sells ¥726B in 1.40% 30-year bonds; Avg yield: 1.385% v 1.350% prior; Bid to cover: 3.17x v 3.33x prior
- (CN) PBoC to inject CNY10B in 7-day reverse repos (38th consecutive injection); Net zero position this week (2nd consecutive week of neutral position)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3628 v 6.3614 prior setting; 8th straight weaker setting; weakest Yuan setting since Oct 19th
- (JP) Japan investors bought net ¥1.0T in foreign bonds v ¥883B in prior week; Foreign investors bought net ¥170B in Japan stocks v bought ¥187B in prior week
***Market Focal Points/FX***
- Asian equities are mixed without much conviction on Wall St, but the session did produce some fireworks in Australia FX space. Employment change of 58.6K new jobs was the biggest in 3 1/2 years, while unemployment matched the lowest level in 2 years. Participation rate was not sacrificed by the net job creation, rising to 65.0%. The closely tracked Hours Worked component also saw the biggest increase in 9 months. The impressive jobs data produced a 80pip spike in AUD/USD to 0.7150 and the Yield on Australia 3-year Bond rose over 5bps to 2.15% - a 4 1/2 month high - as traders repriced odds on expectations of another RBA cut in Q1 of next year all the way down to mid 20%-ile. Australia stocks initially sold off slightly but then turned positive in a notable transition to "good news is positive for stocks" theme.
- Bank of Korea held rates unchanged at 1.5% for the 5th straight month as widely expected. BOK did note that economic sentiment has improved, but also warned about the risks around US rate liftoff and China economic slowdown. BOK's Lee said it was a unanimous decision, also pledging to keep policy accommodative to support growth.
- China based Netease and Lenovo reported results that also exceeded expectations. NTES was up some 6% afterhours after posting Q3 $2.24 v $1.79e, R$1.05B v $891Me. Online games Rev rose to CNY5.2B v CNY2.3B y/y. Lenovo saw its first quarterly loss in several years, but it was not as steep as anticipated, and Revenue also beat expectations. Lenovo announced steep reduction in H1 CAPEX, but its PC market share was still industry leading 21.2% while shipment decline of 6% was less than industry. Shares were up over 4% for the session after Q2 result.
***Equities***
US equities / ADRs:
- ANGI: IACI proposes to acquire the company at $8.75/shr in cash, valuing it at over $500M; ANGI has declined to engage with IACI; +11.0% afterhours
- NTES: Reports Q3 $2.24 v $1.79e, R$1.05B v $891Me; +6.0% afterhours
- PLKI: Reports Q3 $0.46 v $0.44e, R$61.1M v $61.4Me; approves $200M buyback (17% of market cap); +5.6% afterhours
- NCR: Blackstone said to be near a deal to take an over 15% minority stake for over $800M; NCR also plans a $1B share buyback announcement (22% of market cap); +2.7% afterhours
- JBLU: Reports Oct load factor 84.0% v 83.5% y/y; -0.6% afterhours
- FRPT: Reports Q3 -$0.05 v -$0.04e, R$30.6M v $30.0Me; -20.0% afterhours
- DGLY: Reports Q3 -$0.32 v -$0.00e, R$5.1M v $7.0Me; -24.8% afterhours
Notable movers by sector:
- Consumer discretionary: G8 Education GEM.AU +2.4% (acquistion); Seven West Media SWM.AU +1.0% (guidance); SEEK SEK.AU +1.3% (sell stake in IDP Education); Surfstitch Group SRF.AU +4.7% (acquisition, reaffirms guidance); Toppan Printing Co 7911.JP +3.2% (H1 result)
- Financials: Macau Legend Development 1680.HK +0.9% (Q3 result); Computershare CPU.AU +5.4% (reaffirms guidance)
- Industrials: Aurizon Holdings AZJ.AU +4.1% (share buyback)
- Technology: Asustek Computer 2357.TW -1.1% (Q3 result); Lenovo 992.hk
- Materials: Sims Metal Management SGM.AU -17.7% (guidance)
- Energy: GCL-Poly Energy Holdings 3800.HK -0.6% (Q3 result); Santos STO.AU -27.8% (entitlement offer)
- Healthcare: Ramsay Health Care RHC.AU +1.0% (guidance)
- Telecom: ZTE Corp763.HK -1.4% (terminates share buyback plan)