Asian Market Update: BOJ Gov Kuroda shuts down expectations for more easing as yen pairs and Nikkei turn lower
***Observations/Insights*** - Tokyo stocks traded up into the lunch break but have since pared those gains on mixed set of comments by BOJ Gov Kuroda. Speaking in Parliament, Kuroda initially noted JPY weakness is not excessive, but then directed more attention toward the options for an eventual exit from easy policy, reiterating overnight remarks that any additional easing is not being considered at the moment. USD/JPY traded up above 101.30 but has since pulled back toward the 101 yen handle. - Shanghai Composite is also on the defensive in the afternoon session, falling back below the technically key 2,200 level. S&P expressed some skepticism over China's ability to transition its economy into a consumption-driven one quickly. Separately, a PBoC official said the central bank will continue to request that local banks delever, and also noted the overall economy has entered into a long-term deleveraging process. AUD remained among the most heavily sold currencies as PBoC comments hit the wires, falling some 80pips from the highs to $0.9170 with an added tailwind in Aussie weakness from the overnight comments out of RBA Gov Stevens encouraging more downside.
***Economic Data*** - (TW) TAIWAN OCT UNEMPLOYMENT RATE: 4.2% V 4.2%E - (JP) BANK OF JAPAN (BOJ) NOV MONTHLY ECONOMIC REPORT: MAINTAINS ASSESSMENT; domestic economy is recovering moderately - (NZ) NEW ZEALAND OCT NET MIGRATION: 3.0K V 2.7K PRIOR
***Fixed Income/Commodities/Currencies*** - (AU) Australia MoF (AOFM) sells A$800M in 2016 Bonds; avg yield: 2.9681%; bid-to-cover: 5.4x - (US) Weekly Fed Balance Sheet Assets Week ending Nov 20th: $3.864T v $3.864T (record high) prior; M1 y/y change: 8.5% v 8.5% w/w; M2 y/y change: 6.5% v 6.5% w/w - (CN) Daily Shibor fixings: O/N: 3.8990% v 3.8890% prior (first rise in 4 sessions); 1-week: 4.7630% v 4.7080% prior (first rise in 4 sessions)
- CME lowers initial gold margins by 9.4%, silver by 11.0%; lowers WTI crude futures margins by 8.1%; effective at the close of business on Friday Nov 22nd - GLD: SPDR Gold Trust ETF daily holdings fall 3.6 tonnes to 856.7 tonnes (lowest since Feb 2009)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1680 v 6.1366 prior setting (weakest Yuan setting since Nov 10th)
***Speakers/Political/In the Papers*** - (CN) PBoC official: PBoC to continue to request banks delever - financial press - (CN) China to start interbank gold swap trading on China foreign exchange trade system (CFETS) starting on Nov 25th - financial press - (CN) China may start natural gas price reform soon - Chinese press - (CN) S&P: China faced with trilemma in raising consumption; despite record growth over decade there are structural shortcomings - (CN) China expands consumer finance company trial to 10 more cities - financial press
- (JP) BOJ Gov Kuroda: Japan will continue to exceed potential growth rate; To keep current program in place until stable 2% inflation is realized; Not considering additional monetary measures at the moment - addressing parliament - (JP) Japan coast guard reports 4 Chinese vessels entered Japan disputed Senkaku Islands - financial press - (JP) Japan Econ Min Amari: Any changes in GPIF pension fund depends on prices - financial press - (JP) Japan to issue fewer new Bonds in FY14/15 - Japanese press
- (KR) Bank of Korea (BOK) Gov Kim: Global liquidity is a major topic of discussion in global policy - press conf - (NZ) RBNZ assistant gov McDermott: Reiterates fx rate at historically high levels; would like to see lower exchange rate; NZD is overvalued
- Goldman Sachs: Sees at least 15% loss in gold, iron ore, soybean, and copper in 2014
***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 +0.7%, S&P/ASX +0.8%, Kospi +0.6%, Shanghai Composite -0.2%, Hang Seng +0.5%, Dec S&P500 flat at 1,793, Dec gold -0.1% at $1,242, Jan crude oil -0.3% at $95.18/brl
US markets: - TWC: Charter Communications said to be near agreement with banks to help fund bid for Time Warner Cable - financial press
- MRVL: Reports Q3 $0.32 v $0.25e, R$931.2M v $871Me; +6.2% afterhours - ADSK: Reports Q3 $0.41 v $0.39e, R$555.2M v $547Me; +3.3% afterhours - NKE: Increases quarterly dividend 14% to $0.24 from $0.21; +0.6% afterhours
- UPS: Announces 2014 rate increases; average rise of 4.9%; -0.1% afterhours - INTU: Reports Q1 -$0.06 v -$0.09e, R$622M v $603Me; -0.9% afterhours - GPS: Reports Q3 $0.72 v $0.70e, R$3.98B v $3.98Be; Approves $1B Share Repurchase Authorization (5.2% of market cap); -1.1% afterhours - P: Reports Q3 $0.06 (adj) v $0.06e, R$181.6M v $176Me; -1.3% afterhours - ROST: Reports Q3 $0.80 v $0.81e, R$2.40B v $2.44Be; -7.4% afterhours
Notable movers by sector: - Consumer discretionary: David Jones Ltd DJS.AU +2.1% (trading update); Kingmaker Footwear Holdings Ltd 1170.HK -4.0% (H1 results); Air New Zealand Ltd AIR.NZ +4.2% (Oct passenger results); Parkson Retail Group 3368.HK -5.1% (Q3 results) - Industrials: Chongqing Road & Bridge Co 600106.CN +3.0%, Chongqing Gangjiu Co Ltd 600279.CN +4.8%, Chongqing Yukaifa Co Ltd 000514.CN +10.0% (Alibaba to invest in Chongqing); Shanghai Zhixin Electric 600517.CN +5.1% (awarded order); Daiwa House Industry 1925.JP +0.2% (invest plans) - Materials: Formosa Plastics 1301.TW +1.4% (invest plans) - Financials: Glorious Property Holdings Ltd 845.HK +31.5% (privatizing plans) - Technology: Acer Inc 2353.TW +6.1% (appoints founder as Chairman & President); Tokyo Electron Ltd 8035.JP +1.0% (orders); NTT Data Corp 9613.JP +1.9% (acquisition) - Telecom: China Telecom 728.HK +0.5%, ZTE 763.HK +0.6% (rumors on 4G licenses)