Asian equities start week mirroring US markets' pre-weekend fall

General trend

- A weak equities market for the start of September culminated in -2.4% and -1.7% drops Friday night in the Nasdaq and S&P500. However, those final drops for the week did not occur until the equity cash openings, a full hour after the slightly weaker than expected (and highly anticipated) US Nonfarm Payrolls data. Lower revisions were not appreciated. The falls also came before Fed’s Waller comments that he would be open to front-loading rate cuts. US Treasury yields and WTI oil prices also dropped to their lowest in more than a year.

- Asian equity openings followed the US closing prices from the start, with the Nikkei leading the way down over -3% at one point. Chip-relateds followed Nvdia down, with Advantest and Tokyo Electron -6%, and Korea’s Hynix -3%. However, around half of the early losses were pared as the Asia session progressed.

- Late Sunday, China’s NDRC & MOFCOM said China is to remove restrictions on foreign investment in manufacturing and healthcare sectors, in its first relaxing of restrictions in nearly three years.

- Japan’s GDP final revisions came in slightly below estimates as inflation weighs on growth [GDP deflator revised higher, nominal GDP unchanged].

- China continues to struggle with deflationary pressures; August CPI slightly higher than the previous month but below estimates, while producer prices paid fell for a 23rd straight month and at an accelerated pace.

- Note that tonight will be Apple’s annual product launch event (Monday 9th at 1pm ET) – including the iPhone 16, 16 Pro, and 16 Pro Max. Also additional details about how the new phones plan to utilize Apple Intelligence – which will only work on two legacy iPhones (the 15 Pro and 15 Pro Max), which implies the feature could drive a healthy hardware upgrade cycle if consumers see the feature as compelling.

- By early Saturday Bitcoin fell further, nearly down to the $52k level which put it only ~$3K from the multi-month lows seen during the early August volatility. By Monday BTC had clawed back some of last week’s losses to regain the $55K handle.

- No updates yet from large oil producers yet amid Gulf storm threat.

- US equity FUTs modestly rebounded during the Asia session (+0.4% to +0.6%).

Looking ahead (Asian time zone)

- Tue Sept 10th AU Sept Consumer + Aug Biz Confidence; CN Trade Balance.

- Wed Sept 11th US Trump-Harris Presidential debate; KR Unemployment; RBA’s Hunter; BOJ’s Nakagawa; (Wed eve UK July GDP; Wed night US Aug CPI; CN New Yuan Loans).

- Thu Sept 12th BOJ’s Tamura; (Thu eve ECB rate decision; US PPI).

- Fri Sept 13th.

- Sat Sept 14th China Aug ‘data dump’ (Ind. Production, Retail Sales, FAI, etc).

Holidays in Asia this week

- N/A.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 8,002.

- RBNZ Dep Gov Hawkesby: New Zealand rate hikes had intended effect, but there were some surprises (update).

China/Hong Kong

- Hang Seng opens -1.0% at 17,261; Shanghai Composite opens -0.4% at 2,754.

- CHINA AUG CPI Y/Y: 0.6% V 0.7%E.

- China Aug Foreign Reserves: $3.29T v $3.294Te [highest level since Dec 2015]; halts gold reserve increases for the 4th straight month - update.

- China PBOC said to be 'very likely' to sell bonds again soon - Shanghai Securities News, in commentary.

- China NDRC & MOFCOM: China to remove restrictions on foreign investment in manufacturing and healthcare sectors; Effective Nov 1st - joint statement.

- (US) Treasury Sec Yellen: Our relationship with China is something that needs to be prioritized and nurtured [weekend update].

- China PBOC sets Yuan reference rate: 7.0989 v 7.0925 prior.

- China PBOC Open Market Operation (OMO): Sells CNY92B in 7-day reverse repos; Net injects CNY88B v net injects CNY111B prior.

Japan

- Nikkei 225 opens -1.6% at 35,805.

- Japan Q2 Final GDP Q/Q: 0.7% V 0.8%E; annualized GDP Q/Q: 2.9% V 3.2%E.

- Japan July Current Account: ¥3.193T v ¥2.498Te.

- Japan Aug Bank Lending Y/Y: 3.0% v 3.2% prior.

- Japan former FSA Snr Official Amaya: BOJ may hike rates (again) by year-end - financial press.

- Japan sells ¥3.5T vs. ¥3.5T indicated in 6-month Bills; Avg Yield: Avg Yield: 0.0867% v 0.0948% prior, bid-to-cover: 3.42x v 3.36x prior.

- Seven&i: Couche-Tard provides update on Seven & i holdings offer; Remains highly focused on consummating a deal that can satisfy all constituencies.

- Japan Former Min Shinjiro Koizumi: Leads LDP Leadership poll with 28.5% - Japanese press poll.

- Goldman Sachs: Said to enter Japan pension fund management – Nikkei [weekend update].

South Korea

- Kospi opens -1.8% at 2,498.

- South Korea said to curb credit loans amid rise in household debt - South Korea press.

Other Asia

- Indonesia Aug Consumer Confidence: 124.4 v 123.4 prior.

- Taiwan Econ Ministry: Will follow US export controls on China's advanced technology.

North America

- (US) Fed's Waller (voter, hawk): Important to start rate cuts at next meeting; If appropriate I would advocate for front loading rate cuts - prepared speech.

- (US) Fed's Williams (voter): Policy can move toward more neutral setting over time; Unemployment rate still low despite rise; Doesn't comment on potential size of first rate cut - speech text.

- (US) Aug change in Nonfarm Payrolls: +142K V +165KE.

- (US) Aug average hourly earnings M/M: 0.4% V 0.3%E; Y/Y: 3.8% V 3.7%E.

- (US) Aug unemployment rate: 4.2% V 4.2%E.

- (US) NY Judge Merchan delays Trump sentencing in the hush money case until Nov 26th (after the election).

- (US) Reportedly Biden admin is working on a proposal for a US sovereign wealth fund - press.

Europe

- (IE) Ireland Aug Construction PMI: 50.0 v 49.9 prior (moves back into expansion after three months contraction).

- (EU) Eurozone Q2 final GDP Q/Q: 0.2% V 0.3%E; Y/Y: 0.6% V 0.6%E (Friday update).

- (DE) Germany July industrial production M/M: -2.4% V -0.5%E; Y/Y: -5.3% V -3.5%E (Friday update).

- (UK) Aug HALIFAX house price index M/M: 0.3% V 0.8% prior; Y/Y: 4.3% V 2.3% prior (highest since Nov 2022) (Friday update).

Levels as of 01:20 ET

- Nikkei 225 -0.8%; ASX 200 -0.4%; Hang Seng -1.8%; Shanghai Composite -0.9%; Kospi -0.6%.

- Equity S&P500 FUTs +0.4%; Nasdaq100 FUTs +0.6%, Dax +0.4%; FTSE100 +0.8%.

- EUR 1.1073-1.1092: JPY 141.96-143.09; AUD 0.6666-0.6689; NZD 0.6163-0.6187.

- Gold +0.1% at $2,523/oz; Crude Oil +1.3% at $68.58/brl; Copper +0.5% at $4.0865/lb.