PBOC finally stepped up liquidity injection
Asian Market Update: Equity markets generally trade higher; The AU and New Zealand curves steepen after the UST evolution; CN new home prices fell for the first time in years because of Evergrande’s concerns; The PBOC finally stepped up the cash injection; UK CPI due later today.
– AUD and NZD extend their earnings; The CNH drops after a previous rise.
– USD / JPY hit its highest since late 2017 by mid-day Gotobi, rising UST yields.
– China valued USD bonds at tighter spreads than initial price forecasts, orders topped $ 23.0 billion.
– HKMA to withdraw additional cash.
– Chinese coal FUTs drop after NDRC comments.
– Nikkei reduced the gain.
– Hang Seng stayed higher [TECH index rises].
– Shanghai Composite closed flat in the morning [Property index continues to lag].
– The S&P ASX 200 has extended gain [Resources index has outperformed].
– Companies due to report during the New York morning include Abbott Labs, Anthem, Biogen, Baker Hughes, Canadian Pacific, Knight-Swift Transportation, Lithia Motors, Nasdaq, Verizon, Winnebago.
Titles / Economic data
Australia / New Zealand
–The ASX 200 opened + 0.3%.
– BPT.AU reports first quarter production of 5.7 MMBOE v 6.8 y / y; Rev. A $ 388M vs. 361M y / y.
– (AU) Australia Sept Westpac Leading Index: -0.0% vs. -0.3% previously (5th consecutive decline).
– The changes made by RHC.AU to the surgical restrictions in NSW and Victoria will have a significant impact on the benefits of Exercise 22 and will depend on their geographic coverage, extent and duration.
– (AU) Australia sells AU $ 1.5 billion against AU $ 1.5 billion quoted in April 2033 bonds at 4.50%, average yield 1.8291%, cover offer of 3 , 03x.
-Nikkei 225 opened + 0.6%.
– Bank (JP) of Japan (BOJ) is asking banks about old LIBOR as BOJ and FSA review all remaining LIBOR related contracts.
– (JP) Japan’s trade balance in September: – ¥ 622.8B against – ¥ 530.4Be; Adjusted trade balance: – 624.8 B against – 586.4 Be.
– (JP) Japan METI to announce bridging financing plans for the steel industry, which is Japan’s biggest carbon emitter – press.
– (JP) Japan PM Office: Mount Aso erupted at 11:44 JST, the flow reached 1 km.
-Kospi opened + 0.5%.
– (KR) North Korea confirms the firing of a short-range missile from a submarine (SLBM).
– (KR) South Korea Fin Min Hong: The government is considering reducing the fuel tax due to high oil prices.
China / Hong Kong
-Hang Seng opened + 1.1%; Shanghai Composite opened -0.3%.
– (CN) China PBOC Backed Newspaper, Financial News: The expectation of a reduction in the RRR in the fourth quarter has eased due to high inflation exiting factories.
– (CN) CHINA SEVEN NEW HOUSES PRICE M / M: -0.1% V + 0.2% PREVIOUS; Y / Y: 3.8% V 4.2% BEFORE (first decrease since 2015).
– (CN) China Seven Foreign Direct Investments (FDI) YTD Y / Y: 19.6% against 22.3% previously.
– (HK) The Hong Kong Monetary Authority (HKMA) increases the size of 91-day exchange fund bond issues to HK $ 40.0B, HK $ 5.0B each as part of 8 regular calls for tenders.
– (CN) CHINA PBOC FIXING OF THE PRIMARY RATE OF THE MONTHLY LOAN (LPR): LEAVE THE 1-YEAR AND 5-YEAR RATES UNCHANGED (18th consecutive month of stable rates).
– (CN) China PBOC Open Market Operation (OMO): Injects CNY 100 billion in 7-day reverse repurchase agreements against CNY 10 billion previously; Net CNY90B injection vs Net CNY0B before, increased injections due to tax and government bond issue payments.
– (CN) Some Chinese exporters would increase their prices by 20% – financial press.
– (CN) The Chinese PBOC fixes the benchmark rate for the yuan: 6.4069 against 6.4307 previously (the strongest correction since June 11).
– (CN) China State Planner (NDRC) Officia: Government must closely monitor operational issues for real estate developers.
– (CN) It appears that China is reducing the test of its property tax plan after President Xi saw largely negative reactions and resistance within the Press Party.
– (CN) China’s Ministry of Finance (MOF) values 3-year, 5-year, 10-year and 30-year bonds at $ 4.0 billion [as indicated, smallest USD bond offering by China since 2018]; orders totaled $ 15.0 billion.
– (CN) China Vice Commerce Min: will roll out measures to stimulate consumption.
– (CN) Yao Jingyuan, Chinese government adviser: PBoC should reduce RRR in order to increase liquidity and support economic growth (yesterday later in the session).
– (United States) Weekly API crude oil inventories: + 3.3 M against + 5.2 M previously.
– (US) The US government will likely recommend COVID booster shots for people as young as 40 who have received the Moderna or Pfizer vaccine – CNN.
– NFLX Exec: Customer churn rate is down from previous years; Looking by member down from distorted 2020 COVID numbers, no one is sure we can return to past growth levels – after the results call.
– (US) President Biden told Democrats they can get a new $ 1.75 billion to $ 1.90 billion deal for a spending proposal.
– (PR) The Puerto Rico House of Representatives approves the bill to restructure the debt, the Senate will vote on the measure on Thursday.
– (United Kingdom) The British government reportedly intends to reduce the tax surcharge on bank profits by more than 60%, from 8% to 3%; Would start in April 2023 – FT.
Levels at 01:15 ET
– Hang Seng + 1.1%; Shanghai Composite + 0.0%; Kospi -0.3%; Nikkei225 + 0.2%; ASX 200 + 0.5%.
– Equity Futures: S & P500 -0.0%; Nasdaq100 -0.1%, Dax -0.0%; FTSE100 + 0.0%.
– 1.1652-1.1628 euros; 114.71-114.33 JPY; 0.7503-0.7465 AUD; NZD 0.7179-0.7147.
– Commodity Futures: Gold + 0.2% at $ 1,774 / oz; Crude oil -0.6% at $ 81.97 / brl; Copper -1.2% at $ 4.63 / lb.