Asian Market Update: Further CN Real Estate Stimulus Disappoints. AU’s featured jobs. Tonight we will focus on TSMC Q3 + ECB interest rate decision + US September retail sales.
overall trend
– China’s real estate inventory index fell 3-6% following a joint briefing by the Ministry of Housing, Ministry of Finance, and People’s Bank. The only major measure announced at a largely unfocused and rambling meeting was to expand the whitelist of real estate projects eligible for bank financing to RMB 4T by the end of 2024 (currently RMB 2.3T). ).
– ASX 200 hits new all-time highs. Australia’s employment statistics for September were also notable, with participation rates hitting a record high. The Australian dollar rose 0.4% to above 67 cents. Australian jobs data confirms the RBA’s comments on no short-term relief (Governor Bullock, 24 September: No rate cuts expected in the short term). AU3 year yield is +4.2bps.
– Japan’s ruling Liberal Democratic Party could lose its outright majority in the Oct. 27 general election for the first time since 2009 in an early election called by new Prime Minister Ishiba.
– Japan’s trade deficit in September was higher than expected, but exports to the US and China both fell unexpectedly, and overall exports fell year-on-year for the first time in 10 months.
– US stock FUT during the Asian session -0.2% to -0.3%.
Future prospects (Asia time zone)
– Thursday, October 17th (Thursday, eve of EU final September CPI, ECB interest rate decision, US September retail sales).
– Friday, October 18th, Japan September National CPI, China GDP/Industrial Products/Retail Sales/FAI (Friday US September Preliminary Building Permit).
Asian holidays this week
– Monday, October 14th Japan, Thailand.
Headline/economic data
Australia/New Zealand
– The ASX 200 was +0.6% at 8,334 in early trade.
– Australia September employment change: 64.1KV +25.0KE. Unemployment rate: 4.1% V 4.2%E.
– BHP.AU reports first quarter Waio iron ore production: 71.6Mt vs. 71.9Me. Shipments: 71.54 million tons vs. 72 million tons. We are on track to meet production guidance. Demand for copper is expected to increase by 70% by 2050. Affirm guidance.
– New Zealand sold a total of NZ$500 million. vs. NZ$500 million as shown in the 2031, 2034 and 2041 bonds.
China/Hong Kong
– Hang Seng Market opens +0.9% at 20,471. The Shanghai Composite opens +0.6% at 3,220.
– Briefing session with the Ministry of Housing, Ministry of Finance, and People’s Bank of China: By the end of 2024, the white list of real estate projects that receive bank financing will be expanded to 4T RMB (currently 2.3T RMB).
– Deputy Governor Tao Lin of the People’s Bank: Real estate development loans will be extended until the end of 2026. There was “positive” feedback on the September policy change.
– China’s economic stimulus plan expected to be up to RMB 10 – China Daily.
– Apple is reportedly secretly working with BYD to develop a long-range EV battery – Report.
– A number of Chinese wind turbine manufacturers are reportedly now forming a coalition to stop a price war in the wind turbine market – Danish newspaper (updated nightly).
– Chinese President Xi: Emphasizes efforts to achieve economic goals for the year. Call for effort on economic activity in the fourth quarter – Chinese news agency (updated nightly).
– People’s Bank of China pushes technology in ‘some’ regions with more loans – Financial Press (updated nightly).
– The People’s Bank of China set the reference rate for the renminbi at 7.1220 vs. 7.1191 (lowest since August 29).
– People’s Bank of China Open Market Operations (OMO): Injected 133 billion yuan in 7-day reverse repo. Net emissions are RMB 17.4 billion, while net injections are RMB 58.1 billion previously.
Japan
– Nikkei 225 opens +0.2% at 39,263.
・Japan’s September trade balance: -294.3BV-316.0BE.
– Japan’s ruling Liberal Democratic Party may lose majority in October 27th general election – Nikkei Shimbun early voting.
– Prime Minister Ishiba makes offering at Yasukuni War Shrine – Japanese Press
– Japan Stock Exchange CEO: Japan is currently at the top of the list of investors moving money out of China – Press conference.
– Japan sells 3.2 trillion yen, compared to 3.2 trillion yen shown in 12-month securities. Average Yield: 0.2886% vs. 0.2622% before; Bid to Cover: 3.04xv 3.56x before.
South Korea
– Kospi starts +0.4% at 2,620
– South Korean Deputy Finn Min Yun-sang: Joining the WGBI is expected to draw new capital inflows from countries including Japan and help keep South Korean government bond yields stable as bond supply increases. .
Other Asia
– Thai Commerce Minister Min Pichai: Repeatedly wants higher inflation target – comments after last night’s 25bps cut in BOT interest rates.
– Governor Yang of the Central Bank of Taiwan (CBC): Housing prices are a concern as they continue to rise.
– Singapore September non-oil domestic exports m/m: 1.1% vs. 4.9%e. Year over year: 2.7% vs. 9.1%e.
– The Bangko Sentral ng Pilipinas (BSP) will lower overnight borrowing rates by 25 bps to 6.00%. As expected.
– The Bank of Thailand (BOT) will lower the base interest rate by 25 bps to 2.25%. Not expected.
– Bank Indonesia (BI) will keep the BI rate unchanged at 6.00%. As expected.
North America
– (MX) Mexican Undersecretary Econ Min: General Motors, Foxconn, DHL, Stellantis, and Intel will develop plans to replace imports to Mexico with local production.
– (US) MBA home loan applications through October 11: -17.0% vs. -5.1% previously.
– (US) September import price index m/m: -0.4% V -0.3%E. YoY: -0.1% V 0.0%E.
– (US) October New York Fed Service Business Activity Index: -2.2 vs. previous +0.5.
Europe
– (YE) US forces attack Houthi weapons storage facility in Yemen – US media.
– (IL) US officials reportedly expect an Israeli counterattack against Iran to take place before US Election Day, November 5th – CNN.
– (DE) German Chancellor Scholz: We need a new industrial policy agenda that goes beyond reform.
Level as of 01:20 Eastern Time
– Nikkei Average -0.5%, ASX 200 +0.9%, Hang Seng +0.8%. Shanghai Composite +0.3%. Kospi is -0.2%.
– Stocks S&P500 Futures -0.2%. NASDAQ100 -0.3%. Ducks -0.1%; FTSE100 flat.
– 1.0851 – 1.0871 euro; 149.24 yen – 149.66 yen. Australian dollar 0.6660-0.6711 Australian dollar. The New Zealand dollar was 0.6054-0.6076 US dollars.
– Gold +0.2% at $2,697/oz; Crude oil +0.5% at $70.72/brl. Copper -0.3%, $4.3537 per pound.
