Deflation concerns remain regarding China, RBA quarterly statement due on Friday
|Asia Market Update: Deflation concerns remain regarding China; RBA quarterly statement due on Fri; Fed Chair Powell to speak again.
General trend
- Equities trade mixed.
- Japan corporate earnings remain in focus [including Honda, Nissan, Rakuten, Sony and SoftBank Group].
Headlines/economic data
Australia/New Zealand
- ASX 200 opens +0.1% at 7,009.
-Chevron: Australia unit: Says working to return to full LNG production at Gorgon gas facility following electrical incident.
-New Zealand sells total NZ$500M vs. NZ$500M indicated in 2030, 2032 and 2037 bonds.
China/Hong Kong
-Hang Seng opens flat at 17,553.
-Shanghai Composite opens -0.2% at 3,047.
-CHINA OCT CPI M/M: -0.1% V 0.2% PRIOR; Y/Y: -0.2% V -0.1%E [largest y/y decline since Jul]; PPI Y/Y: -2.6% v -2.7%e.
-Follow Up: US Treasury Sec Yellen to meet with He Lifeng at 1:15 PM EST; the officials will meet again at 5 PM ET - press [**Reminder Nov 6th: (US) Treasury Sec Yellen said to meet China Vice Premier in San Francisco on Nov 9-10th; Pres Biden and China Pres Xi are expected to meet next week during the APEC summit - press].
-US and China said to be nearing restart of military to military communications - press.
-China Civil Aviation Regulator (CAAC): Direct passenger flights between China and the US will rise to 70 flights per week.
-(US) Some Congressmen urge Biden Admin to raise tariffs on Chinese vehicles - press.
-China PCA: Oct Retail Passenger Vehicle Sales Y/Y: 10.2% v 5.0% prior.
- China PBoC Dep Gov Xuan Changneng: To step up economic dialogue with other countries.
-China Commerce Ministry (MOFCOM): China to stabilize foreign firms' confidence in the country.
-China Commerce Ministry (MOFCOM): To re-investigate anti-dumping duties case related to stainless steel imported from the EU, Japan, South Korea and Indonesia; specifically relates to stainless steel billets, hot-rolled sheets and coils.
-China State Admin of Foreign Exchange (SAFE) reiterates to keep yuan rate reasonable and at a balanced level.
Japan
- Nikkei 225 opens +0.5% at 32,316.
-BOJ OCT SUMMARY OF OPINIONS: The decision at this MPM to increase the flexibility in the conduct of yield curve control will lead to improving its resilience through reducing the chance of speculative moves.
-BOJ Gov Ueda: Reiterates vital to confirm virtuous wage-inflation cycle.
-Former BOJ official Maeda: BOJ may end negative interest rate policy in Jan, keep raising short-term rates in stages - financial press.
- JAPAN SELLS ¥900B IN 1.800% 30-YEAR BONDS: AVG YIELD: 1.7410%; BID-TO-COVER: 3.60X.
-Follow Up: Japan calendar JGB issuance expected to remain the same after extra budget - Press.
-Japan Sept Current Account: ¥2.7T v ¥2.978Te.
- Japan Oct Bank Lending Y/Y: 2.8% v 2.9% prior.
-Oct Tokyo Avg Office Vacancies: 6.1% v 6.2% prior.
-Japan releases weekly flows data [period ended Nov 3rd]: Foreign buying of Japan equities: ¥313.5B v +¥10.6B prior ; Japan buying of foreign bonds: -¥388.4B v +¥238.5B prior; Foreign buying of Japan bonds: ¥512.0B v -¥1.7T prior.
-Japan PM Kishida will not dissolve the lower house this year - Japanese press.
Korea
-Kospi opens +0.2% at 2,425.
-KDI [state think tank]: Raises South Korea 2023 and 2024 avg inflation forecasts, trims GDP forecasts.
Other Asia
-Philippines Q3 GDP Q/Q: 3.3% v 1.9%e; Y/Y: 5.9% v 4.7%e.
-Taiwan Central Bank (CBC): Need time to resolve large trade surplus with the US; rate hike cycle may not have ended yet.
North America
-Fed Chair Powell does not comment on monetary policy or economic outlook in prepared remarks; Mentions forecast models.
-Fed's Harker (voter): Reiterates now is time to take stock of past rate hikes' impact.
-(US) TREASURY'S $40B 10-YEAR NOTE AUCTION DRAWS 4.519% V 3.999% PRIOR; BID-TO-COVER RATIO: 2.45 V 2.56 PRIOR AND 2.48 OVER THE LAST 4 AUCTIONS.
-(US) Hollywood Studios said to reach tentative new contract agreement with actors; full details of the agreement not yet provided - Press.
Europe
-Airbus: Affirms FY23 Adj EBIT.
-(IL) Hamas would exchange hostages for brief pause in fighting - NYT.
-US strikes Iran weapons facility in Syria - Washington Post.
-(UK) Oct RICS House Price Balance: -63% v -69% prior.
-(RU) Russia said to be discussing lifting ban on 'some gasoline exports' - press.
Levels as of 00:20 ET
- Nikkei 225, +1.6%, ASX 200 +0.3% , Hang Seng -0.2%; Shanghai Composite flat ; Kospi +0.6%.
- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 +0.1%.
- EUR 1.0715-1.0702 ; JPY 151.02-150.82 ; AUD 0.6417-0.6400 ;NZD 0.5931-0.5906.
- Gold -0.2% at $1,953/oz; Crude Oil +0.2% at $75.44/brl; Copper -0.3% at $3.6258/lb.
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