Asian Mid-session Update: Soft lending figures weigh on China markets
***Economic Data***
- (JP) JAPAN SEPT FINAL INDUSTRIAL PRODUCTION M/M: 1.1% V 1.0% PRELIM; Y/Y: -0.8% V -0.9% PRELIM
- (JP) Japan Sept Conference Board Leading Economic Index -0.8% v 0.1% prior
- (KR) South Korea Sept Conference Board Leading Economic Index (LEI) +0.6% v +0.3% prior
- (SG) SINGAPORE SEPT RETAIL SALES M/M: -3.7% V +5.5% PRIOR; Y/Y: 4.6% V 5.5%E; RETAIL SALES EX AUTO Y/Y: -1.4% V +0.7%E
- (PE) PERU CENTRAL BANK LEAVES REFERENCE RATE UNCHANGED AT 3.50%, AS EXPECTED
- (CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 3.25%, AS EXPECTED
- NPD: Oct US total video game sales $806M, +2% y/y
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.8%, S&P/ASX -1.5%, Kospi -1.1%, Shanghai Composite -1.2%, Hang Seng -2.1%, Dec S&P500 +0.1% at 2,042
***Commodities/Fixed Income***
- Dec gold +0.1% at $1,082/oz, Dec crude oil -0.6% at $41.52/brl, Dec copper -0.5% at $2.16/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 1.5 tonnes to 661.9 tonnes; Lowest since 2008
- SLV: iShares Silver Trust ETF daily holdings rise to 9,801 tonnes from 9,756 tonnes
- (CN) China Iron and Steel Association (CISA): China Jan-Oct apparent steel consumption -5.7% y/y
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3655 v 6.3628 prior setting; 9th straight weaker setting; weakest Yuan setting since Sept 29th
- (JP) BOJ offers to buy ¥400B in 5-10yr JGBs, ¥240B in 10-25yr JGBs and ¥140B in JGBs with maturity over 25-yr
- (AU) Australia MoF (AOFM) sells A$800M in % 2019 Bonds; avg yield: 2.2231; bid-to-cover: 2.98x
- (US) Weekly Fed Balance Sheet Total Assets for week ending Nov 11th: $4.49T v $4.49T prior; Reserve Bank Credit: $4.45T v $4.45T prior; M1 y/y change: 6.9% v 7.2% prior; M2 y/y change: 6.0% v 5.9% prior
***Market Focal Points/FX***
- Market sentiment in Asia has turned decidedly bearish going into the weekend, tracking steeper losses on Wall St widely attributed to the decline in energy and strong JOLTS report boosting expectations of Fed liftoff. China markets are particularly soft in the wake of October lending figures out overnight falling to a 15-month low of CNY514B. YTD steel consumption out of CISA reflects the slowing in the property sector as well. China vice head of economic monitoring and analysis center Pan remarked it would help for PBoC to further cut RRR and interest rates.
- Japan cabinet officials Amari and Aso both indicated the govt is not planning an extra budget even if Q3 GDP contracts, sending Japan back into technical recession. Japan Q3 GDP data will be updated this coming Sunday evening (US time). Also out of Japan, Conf Board Leading Index fell -0.8% v 0.1% prior, and resident economists noted downside risks still remain. Toshiba was under heavy pressure again after Nikkei reported Westinghouse unit has disclosed writedowns of $1.3B in FY12 and FY13, raising further concerns about the company's transparency in disclosing large losses.
- Fed Vice Chair Fischer capped off an active session of Fed-speak with fairly upbeat comments, noting the downward pressure on US inflation is related to USD and energy and will fade in 2016. Focusing on USD, Fischer said US economy is weathering the impact of strong exchange rate as well as foreign weakness well, concluding that rate liftoff next week may be appropriate. Despite these somewhat hawkish view, USD majors were not particularly volatile - USD/JPY traded in a 25pip range above 122.50, AUD/USD consolidated the rally after strong jobs figures in a 20pip range below 0.7140, and NZD/USD was in a 15pip range below 0.6550. Chinese Yuan midpoint setting was set weaker for 9th straight day, as China monetary authorities anticipate currency strength from potential inclusion into the SDR.
***Equities***
US equities / ADRs:
- USAT: Reports Q1 -$0.01 v $0.01e, R$16.6M v $15.0Me; +15.9% afterhours
- LPCN: Reports Q3 -$0.35 v -$0.34e (2 ests); +15.4% afterhours
- SYT: Reportedly has rejected approach from ChemChina; talks said to continue and are not exclusive to ChemChina - press; +12.8% afterhours
- CWEI: Reportedly Concho considering acquisition of CWEI - press; +5.5% afterhours
- YUM: Reports Oct China SSS +5%; Reiterates Q4 China SSS guidance of 0-4%; +4.3% afterhours
- ILMN: To be added to S&P500, replacing SIAL after the close on Nov 18th; +4.1% afterhours
- AMAT: Reports Q4 $0.29 v $0.28e, R$2.37B v $2.39Be; +2.8% afterhours
- PBR: Reports Q3 Net loss $1.1B v loss $2.2B y/y; Rev $23.2B v $38.8B y/y; +0.2% afterhours
- CSCO Reports Q1 $0.59 v $0.56e, R$12.7B v $12.6Be; -5.1% afterhours
- LOCO: Reports Q3 $0.18 v $0.15e, R$88.9M v $90.4Me; -8.3% afterhours
- BEBE: Reports Q1 -$0.16 v -$0.17e, R$96.3M v $93.1Me; To close up to 30 stores in FY16; -10.5% afterhours
- FOSL: Reports Q3 $1.19 v $1.13e, R$771M v $785Me; -15.6% afterhours
- JWN: Reports Q3 $0.57* v $0.72e, R$3.24B v $3.37Be; -20.9% afterhours
Notable movers by sector:
- Consumer discretionary: Sun Art Retail Group 6808.HK -3.2% (9-month result)
Nine Entertainment Co Holdings NEC.AU -3.4%, Southern Cross Media Group SXL.AU +0.9% (confirms talks with Southern Cross)
- Consumer staples: BGF retail Co 027410.KR -13.0% (Q3 result); Nissin Food Holdings Co 2897.JP +8.1% (H1 result)
- Financials: Samsung Life Insurance Co 032830.KR -3.1% (Q3 result); Sony Financial 8729.JP -1.2% (H1 result); T&D Holdings 8795.JP -1.1%?(H1 result)
- Industrials: Yue Yuen Industrial 551.HK -5.4% (9-month result); RUSAL PLC 486.HK -4.5 % (Q3 result)
- Technology: Quanta Computer 2382.TW -0.7% (Oct result); Hikari Tsushin, Inc 9435.JP -5.0% (H1 result); Toshiba Corporation 6502.JP -5.4% (writedown disclosure)
- Materials: Paladin Energy PDN.AU -3.0% (Q1 result)
- Energy: Showa Shell 5002.JP -1.3% (9-month result)