Equities decline on Fed decision/comments
|Asia Market Update: Equities decline on Fed decision/comments; USD and 2-year UST yield extend gains; USD/JPY briefly rose above ¥145; BOJ unchanged; More CB decisions ahead [BOE, SNB, Norway, Indonesia, Philippines, Taiwan].
General tTrend
- Japan’s Top FX Diplomat warns the market.
- Shanghai Property index remains under pressure.
- Aussie markets are closed for holiday.
- US equity FUTs drop in Asia.
- DAX FUTs extend declines [Russia is a focal point?].
- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thurs.
- BOJ Gov Kuroda to hold post rate decision press conference at 6:30 GMT.
Headlines/economic data
Australia/New Zealand
- ASX 200 closed for holiday.
- (NZ) New Zealand Q3 Westpac Consumer Confidence: 87.6 v 78.7 prior.
- (NZ) New Zealand Aug Trade Balance (NZ$): -2.4B v -1.4B prior.
- (NZ) Reserve Bank of New Zealand (RBNZ) Hawkesby: RBNZ adjusting to broadening expectations of prudential role.
- (EU) EU Foreign Policy Chief Borrell: EU ministers agree that additional restrictive measures against Russia to be created as soon as possible.
- (NZ) New Zealand introduces bill on depositor compensation in Parliament for protection on up to NZ$100K.
Japan
- Nikkei 225 opened -1.0%.
- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].
- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [Second Op].
- (JP) Japan PM Kishida: To ease border controls in country as soon as Oct - Press.
- (JP) Bank of Japan (BOJ) leaves interest rate on excess reserves (IOER) unchanged at -0.10%; Aa expected.
- (JP) Japan Chief Cabinet Sec Matsuno: Closely watching impact of US monetary policy and change on Japan and world economy; Expects BOJ to continue implementing appropriate policy.
- (JP) Japan Top FX Diplomat Kanda: HAVE NOT intervened in market [yet]; Won't necessarily comment on market intervention; May be cases to conduct stealth interventions - Press Conference.
Korea
- Kospi opened -1.2%.
- (KR) Bank of Korea and Korean National Pension Fund said to be considering a bilateral currency swap.
- (KR) South Korea Fin Min Choo: International Financial Markets seeing larger uncertainty; Will try to actively manage market volatility; Declines comment on FX swap.
- (KR) Bank of Korea (BOK) Gov Rhee: Expects to announce FX Swap with National Pension Service soon; Closely monitoring impact of US Fed on FX market; To decide on rates after reviewing impact; To provide new forward guidance at next meeting.
- (KR) South Korea President Yoon and US President Biden have agreed cooperation on financial stability.
China/Hong Kong
- Hang Seng opened -2.0%; Shanghai Composite opened -0.6%.
- (HK) Hong Kong Monetary Authority (HKMA) raises base rate by 75bps to 3.50% (as expected).
- (CN) Goldman Sachs cuts China 2023 GDP forecast to 4.5% from 5.3% prior.
- (CN) China PBOC sets Yuan reference rate: 6.9798 v 6.9536 prior.
- (CN) China Aug Swift Global Payments (CNY): 2.31% v 2.20% prior.
- (HK) Hong Kong Finance Sec: Do not think there is a risk of sharp adjustment in housing prices; See no need to adjust controls on property market.
- (CN) China PBOC Open Market Operation (OMO): Sells CNY2.0B in 7-day reverse repos v CNY2.0B prior; Sells CNY16B in 14-day reverse repos v CNY19B prior; Net inject CNY16B v Net inject CNY19B prior.
North America
- (US) FOMC raises target range by 75bps to 3.00-3.25%, as expected; Median forecast shows 4.6% rate at end of 2023 (PRIOR 3.8%); Raises Median forecast for end-2022 rate 4.375% (prior 3.375%); Raises Median forecast for end-2023 rate 4.625% (prior 3.75%).
- (US) Fed Chair Powell: There is a possibility we would go to a certain level of rates and stay there for some time but we're not there yet; There is still a ways to go on rates.
- Apple AAPL Follow Up: US Senators seeking review of plan to use China sourced Chips - Press.
- (US) President Biden expresses support for Senator Manchin (D-WV) permitting bill to speed energy project permitting.
Europe
- (IE) Ireland Sept Consumer Confidence: 42.1 v 53.4 prior.
- (NL) Netherlands Aug House Price Index M/M: -0.1% v +0.5% prior; Y/Y: 11.9% v 14.5% prior.
(CZ) Czech Central Bank's Zamrazilova: Chances of CPI going reliably to 2.0% this year are negligible; Not likely to go for rate cut in 2022.
Levels as of 01:20 ET
- Nikkei 225, -0.5%, ASX 200 closed , Hang Seng -2%; Shanghai Composite -0.4% ; Kospi -0.9%.
- Equity S&P500 Futures: -0.5%; Nasdaq100 -0.8%, Dax -0.4%; FTSE100 -0.3%.
- EUR 0.9848-0.9807 ; JPY 145.38-143.51 ; AUD 0.6646-0.6582 ;NZD 0.5877-0.5810.
- Gold -0.4% at $1,669/oz; Crude Oil +0.4% at $83.28/brl; Copper +0.7% at $3.4585/lb.
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