TradeTheNews.com Asia Market Update: Asian equities trade mixed as Trump raises tariff threat on China
General Trend:
-Hang Seng nears ‘bear market’ territory
- Apple's suppliers decline during trading session
-On Friday (Sept 7th), US President Trump said there are another $267B in China tariffs that could be launched on short notice, in addition to the latest $200B of tariffs.
-Alibaba reveals succession plan for Executive Chairman Ma
-China says to fine tune monetary policy in a ‘pre-emptive’ way based on the economic and external situations
-China Aug CPI rises more than expected
- China Soybean Futures have largest daily rise in over 2 years
-Japan Q2 GDP revised higher on Capex
***Headlines/Economic Data***
Australia/New Zealand
-ASX 200 opened flat
- ASX 200 Telecom index -0.8%, Financials -0.2%, Consumer Discretionary -0.1%; Energy +0.9%, Utilities +0.5%
-NAB [NAB.AU]: CEO: Bank is keeping its variable home loan rate on hold; notes the need to rebuild customer trust
-(AU) According to Newspoll, PM Morrison is favored over opposition leader Bill Shorten; The ruling coalition trails the Labor Party by a 44% to 56% margin - Australian Press
- (AU) Reserve Bank of Australia (RBA) Assistant Gov Bullock: Widespread financial stress among households is not imminent; reiterates sees potential vulnerabilities from high household debt
-(AU) Australia Government: Recent rain in New South Wales (NSW) not enough to lift drought
-(AU) Australia sells A$600M v A$600M indicated in Nov 2022 bonds, avg yield 2.1168%, bid to cover 4.7x
-(NZ) New Zealand Institute of Economic Research (NZIER): Economists lower forecast for GDP growth - Quarterly Consensus Survey of Economists
-(NZ) New Zealand Q2 Manufacturing Activity Q/Q: 1.8% v 0.6% prior; Manufacturing Activity Volume Q/Q: -1.2% v +1.4% prior (largest drop in 5-years)
China/Hong Kong
-Shanghai Composite opened -0.2%, Hang Seng -0.2%
- Hang Seng Materials index -2.1%, Services -1.9%, Industrial Goods -1.6%, Consumer Goods -1.5%, Property/Construction -1.3%, Financials -1.2%, Info Tech -0.7%, Utilities -0.5%, Energy -0.2%
-Alibaba: Current CEO Daniel Zhang to succeed Jack Ma as Executive Chairman, effective Sept 10 2019
-(US) President Trump: there are another $267B in China tariffs that could be launched on short notice, in addition to the latest $200B of tariffs, which could be imposed soon (from Sept 7th)
-(CN) China: State Council Committee on Financial Stability met on Sept 7th: To fend off 'Black Swan' events; to fine-tune monetary policy in 'pre-emptive' way
-(CN) CHINA AUG TRADE BALANCE: $27.9B V $31.0BE; Trade Surplus with the US $31.1B (record high) v $28.1B m/m (released on Sept 8th)
-(CN) China Ministry of Finance said the government will soon grant higher tax rebates to exporters – Press
-(CN) CHINA AUG CPI Y/Y: 2.3% V 2.1%E (highest since Feb)
-(CN) CHINA AUG PPI Y/Y: 4.1% V 4.0%E
-(CN) China PBoC Open Market Operation: Skips OMO (14th straight skip)
-(CN) China PBoC set yuan reference rate: 6.8389 v 6.8212 prior
Japan
-Nikkei 225 opened -0.2%
- TOPIX Marine Transportation index +0.7%, Info & Communications +0.7%, Securities +0.3%, Electric Appliances +0.4%; Retail Trade -0.3%
- Megabanks outperform
-(JP) JAPAN Q2 FINAL GDP Q/Q: 0.7% V 0.7%E; ANNUALIZED Q/Q: 3.0% V 2.6%E (fastest growth since 2016); Business Spending Q/Q: 3.1% v 2.8%e (fastest rise since Q1 2015)
-(JP) JAPAN JUL TRADE BALANCE BOP BASIS: -¥1.0B V -¥47.7BE
-(JP) Japan PM Abe: This will be my last LDP leadership election; Reiterates trade fights don't benefit any country
Korea
-Kospi opened -0.2%
-(KR) Bank of Korea (BoK) said to consider cutting its 2018 GDP growth forecast (currently 2.9%) - Local Press
-(KR) North Korea holds military parade with no speech from Kim Jong Un and no display of ICBMs - Korean press
- (KR) South Korea sells KRW1.3T v KRW1.3T indicated in 10-year bonds: avg yield 2.265%
Other
-(ID) Indonesia Aug Foreign Reserves: $117.9B v $118.3B prior (7th straight decline, released on Sept 7th)
-(ID) Indonesia Central Bank: Reiterates commitment to remain in markets; to continue duel interventions
-(ID) Indonesia Fin Min Indrawati: Sees economic uncertainties to remain at least until 2019, sees higher downside risks in 2019
-(IN) Amid the currency weakness, India 10 year yield trades above 8.11% (highest since Nov 2014)
-(IN) India said to lack sufficient room to reduce borrowings in FY19/20 - financial press
-(PH) Philippines Central Bank (BSP) said to be considering a possible extraordinary policy meeting later in Sept to address inflation and declining peso (PHP) currency - Japanese Press
-(PH) Philippines said to be seen as less likely to reach 7-8% GDP growth forecast for 2018 - Local Press
North America
-Apple [AAPL]: Proposed tariff list said to cover a wide range of Apple products – press
-(CN) According to KLA-Tencor the US semiconductor industry plans to warn the Trump Administration that restrictions on exports of chip and equipment to China could hurt jobs in the US - Japanese Press
-CBS [CBS]: Confirms Moonves to depart as Chairman and CEO, effective immediately; CFO Ianniello to be named as acting CEO; Confirms it and National Amusements agreed to dismiss pending litigation, National Amusements agrees not to propose CBS-Viacom merger for at least 2 years
-(US) Fed Rosengren (moderate, non-voter): Would not be surprised if Fed estimates of neutral rate and therefore rate path shift higher; Sept rate hike 'highly probable'
-(US) Federal Reserve said to consider a new tool to avert crises - US financial press
-(US) US Energy Sec Perry to meet with officials from Saudi Arabia including Energy Minster Al-Falih on Monday in Washington - financial press
Europe
-(EU) EU said to be prepared to tell EU Chief Brexit Negotiator Barnier to 'zero in' on Brexit deal, preparing new instructions to help close the Brexit deal - FT
-(SE) Sweden PM: Election result is still uncertain: to continue as PM until parliament vote, to await the final election outcome before making decisions
-(SE) Following the recent election results, Sweden’s Centre right Moderates and Liberals parties have called on PM Lofven to step down.
-(IT) Italy Fin Min Tria said domestic bond yield spread to decline as government starts to act - financial press
***Levels as of 01:30ET***
- Nikkei 225, +0.2%, ASX 200 -0.1%, Hang Seng -1.1%; Shanghai Composite -0.7%; Kospi +0.2%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 flat
- EUR 1.1565-1.1539 ; JPY 111.10-110.85 ; AUD 0.7120-0.7100 ;NZD 0.6537-0.6512
- Aug Gold -0.1% at $1,201/oz; Sept Crude Oil +0.6% at $68.14/brl; Dec Copper -0.3% at $2.612/lb