Asia Mid-Session Market Update: Shanghai Composite rallies after week-long break; Donald Trump battles fallout of lewd audio leak in 2nd presidential debate as Mexican Peso spikes higher
***Asia Notes/Observations***
- Leaked recording of lewd Donald Trump comments about women in 2005 bolsters US equity futures, as MXN also surges 1.5% past MXN19 vs USD. 2nd US presidential debate widely deemed a better outcome for Trump than the 1st encounter
- Samsung Electronics falls over 3% after halting production of Galaxy Note 7; AT&T and other telecoms suspended exchanges of the device after replacement models also caught fire.
- China returns after a week-long holiday with a catch-up rally; PBoC Gov Zhou claims China financial system is healthy and the risks of rising bad loans are low.
- JPY initially falls after BOJ Gov Kuroda says rates can be cut even further, adds JGB purchases can be cut significantly once inflation target is reached.
- Overall volatility compressed with Japan and Hong Kong markets out for holiday.
- Deutsche Bank CEO still in talks with the DOJ; No deal has been reached.
***Equity Futures (00:00ET): S&P e-mini +0.3%, Dax +0.1%, FTSE100 +0.1%***
***FX / Commodities ranges (00:00ET):***
- EUR 1.1180-1.1200; JPY 102.80-103.300; AUD 0.7585-0.7610, NZD 0.7155-0.7180
- Gold +1.0% at 1,264/oz; Oil -0.8% at $49.39/brl; Copper +0.4% at $2.17/lb
***Asian Equity Markets (00:00ET)***
- Nikkei closed, Hang Seng closed, Shanghai Composite +1.3%, ASX +0.1%, +1.3%, Kospi -0.1%
***Key economic data:***
- (NZ) New Zealand Sept ANZ Aug non-tradable inflation m/m: +0.2% v +0.1% prior; Y/Y: 2.1%
- (US) SEPT UNEMPLOYMENT RATE: 5.0% V 4.9%E; Civilian Labor Force Participation Rate: 62.9% v 62.8% prior (Friday)
- (US) SEPT CHANGE IN NONFARM PAYROLLS: 156K V 172KE (Friday)
***Speakers / Press / Fixed Income***
China:
- (CN) China PBoC Gov Zhou: Risks of bad loans are controllable despite their rise; banks have sufficient capital to cope - China Daily
- (CN) China Commerce Ministry (MOFCOM): Consumption contributed 73.4% of China's economic growth in H1, up 12.5pts from 2015-end - Chinese press
- (CN) PBOC SETS YUAN MID POINT AT 6.7008 V 6.6778 PRIOR; weakest Yuan setting since Sept 2010
Japan:
(JP) BOJ Gov Kuroda: BOJ may put off forecast for reaching 2% inflation target; To keep or strengthen easing for months and years.
(JP) BOJ Gov Kuroda: difficult to achieve balanced economic growth with monetary policy alone; could cut JGB purchases significantly if we reach our inflation target; could increase JGB purchases if inflation remains below target; will not hesitate to cut rates if needed
Australia:
- (AU) CitiGroup: Australia economy is in "bust" territory for the 2nd time in two decades, but that doesn't point to hard landing - SMH
- (AU) Australia Treasurer Morrison: Not seeing much appetite at RBA for further rate cuts - financial press
***Asia movers***
- Consumer discretionary: Michael Hill International MHJ.AU -0.3% (quarterly result); Juneyao Airlines Co 603885.CN +0.6% (alliance)
- Financials: Noble Group NOBL.SG +3.7% (asset divesture); BT Investment Management BTT.AU +8.1% (Sept AUM); McMillan Shakespeare MMS.AU +5.6% (unit order); Investa Office Fund IOF.AU -1.8% (UBS cuts to Sell); QBE Insurance Group Limited QBE.AU +0.9% (Bell Potter cuts to Hold)
- Industrials: UGL UGL.AU +47.9% (CIMIC plans for acquisition); Downer EDI DOW.AU -2.1% (Deutsche Bank cuts to Hold)
- Technology: Samsung Electronics 005930.KR -3.1 % (Galaxy Note 7 output being halted for sales and exchanges by several providers); Lite-On Technology Corp. 2301.TW +0.8% (Sept result);
- Materials: Ramelius Resources RMS.AU +2.2% (Q1 result); Saracen Mineral SAR.AU +3.1% (gold rises)