Focus on end-of-week FOMC, BoE and BoJ decisions

Asia market update: Quiet day amid holidays in Asia; Poor wk/e CN data but more stimulus promised by PBOC; Another Trump assassination attempt; Focus on end-of-week FOMC, BOE & BOJ decisions.

General trend

- A quiet day in Asia with several markets on holiday (China, Indonesia, Japan, Malaysia, South Korea).

- Australian stocks +0.3%, with some weakness in Energy and Resources while gold miners were higher along with financials and IT. Austal +9% on a new $450M defense contract in the US. Hang Seng the only major North Asia market open today down more than -1% early, but pared nearly all losses by the afternoon.

- Former Pres Trump again the target of an apparent assassination attempt, this time at his golf club in West Palm Beach, Florida. Trump later emails that he is fine. The alleged assailant is in custody.
- Ahead of this week’s FOMC rate decision traders now significantly reprice Fed 50bps rate cut expectations from just ~15% mid-week (post-US CPI) up to a 59% chance now following conjecture in WSJ and FT articles that it was a toss-up between 25 or 50bps.

- The quarterly NZIER Economists survey cut New Zealand FY24/25 GDP growth to 0%, although picking up to 2.2% in 2026 as lower interest rates are expected to support a recovery in economic activity.

- Gold continued its record highs on FUTs during Asian trading.

- USD/JPY briefly touched 139.95, lowest since July 2023.

- Kiwi and Aussie commodity currencies up 0.3% to 0.4% amid more stimulus promises from PBOC after weak macro data from China over the weekend (see below).

- US equity FUTs flat to +0.1% during the Asia session.

China Updates from late Friday through the weekend:

- On Friday, a milestone was hit for the global economy: For the first time, China’s ultra long-end government bond yields have fallen below those of Japan. (CN 50-year yields fell below JP 40-year yields).

- Also on Friday, China announced it was raising the retirement age for men from 60 to 63 and women from 50 or 55 to 55 or 58 depending on job type. The retirement age will begin to be gradually raised over a period of 15 years from 2025. China is already struggling to pay retirement benefits in full, and its worsening population pyramid is only going to make the problem worse each year going forward.

- Weak Chinese lending continued; August New Yuan Loans and Aggregate Financing failed to bounce back to levels of previous years in what is traditionally a strong month following the typical year-lows of July. Aug M2 Money Supply remained hovering only 0.1% above the record low recorded in June.

- China monthly ‘data dump’ for August (unusually during a weekend) saw further weak readings; Industrial Production fell to its lowest since March, Retail Sales lowest since June and almost as low as the worst readings last year, while New Home prices and Property Investment continued their ongoing fall.

- To cap off a bad weekend for Chinese data, Aug YTD Foreign Direct Investment (FDI) fell -31.5% y/y for the 8th straight acceleration in in the annualized pace of the fall.

- Amid the continued poor data, China PBOC said to consider more policy measures to lower borrowing costs and place more focus on consumption.

- Additionally, the US confirmed to propose trade rules to curtail low-value shipments exempt from tariffs under the $800 "de minimis" threshold in the US. This would primarily affect Chinese e-commerce firms. (Temu and Shein said to be responsible for more than 30% of all packages shipped to the US daily). Temu parent PDD lost -6% at the NY open, but pared half of those losses during the day.

Looking ahead (Asian time zone)

- Tuesday Sept 17th (Tue eve DE Sept ZEW Sentiment; Tue night US Aug Retail Sales).

- Wednesday Sept 18th JP Trade Balance, ID rate decision, UK Aug CPI, (Wed night US Aug prelim Building Permits, US FOMC rate decision + Presser).

- Thursday Sept 19th AU Aug Employment, TW rate decision, (Thu eve BoE rate decision).

- Friday Sept 20th JP Aug CPI, CN Sept LPR, BOJ rate decision + Gov Ueda presser at h02:30ET);

Holidays in Asia this week

- Monday Sept 16th China, Indonesia, Japan, Malaysia, South Korea.

- Tuesday Sept 17th China, South Korea, Taiwan.

- Wednesday Sept 18th Hong Kong, South Korea.

- Upcoming Chinese market holidays: Sat Sept 14th to Tue Sept 17th; Sept 29th (Sun); Tue Oct 1st to Mon Oct 7th; Sat Oct 12th.

Headlines/economic sata

Australia/New Zealand

- ASX 200 opens flat at 8,103.

- New Zealand Aug Performance of Services Index: 45.5 v 45.2 prior (revised higher).

- NZIER Economists Quarterly Survey cuts FY24/25 GDP growth to 0%; Picking up to 2.2% in 2026.

- RBNZ: Material policy surprises are 'relatively rare' - analytical note (next RBNZ OCR decision is on Oct 9th).

China/Hong Kong

- Hang Seng opens -0.7% at 17,252; Shanghai Composite closed for holiday.

- Typhoon Bebinca, the strongest storm to hit Shanghai since 1949 makes landfall in China - financial press.

- China Aug YTD Foreign Direct Investment (FDI) (CNY-denominated) Y/Y: -31.5% v -29.6% prior (8th straight acceleration in in the annualized pace of the fall).

- China Aug industrial production Y/Y: 4.5% V 4.7%E (lowest since Mar).

- China Aug Retail Sales Y/Y: 2.1% V 2.5%E (lowest since 2.0% in Jun, prior to that 2023).

- China Aug YTD urban fixed assets Y/Y: 3.4% V 3.5%E.

- China Aug YTD Property Investment Y/Y: -10.2% v -10.0%e.

- China Aug New Home Prices M/M: -0.7% v -0.7% prior.

- China Aug Surveyed Jobless Rate: 5.3% v 5.2%e.

- PBOC reportedly mulls additional policy measures to lower borrowing costs; vows to place more focus on consumption - press.

- China Aug YTD aggregate financing (CNY): 21.9T V 21.875TE [weekend update].

- China Aug YTD new Yuan loans (CNY): 14.43T V 14.574TE [weekend update].

- China Aug M2 money supply Y/Y: 6.3% V 6.2%E [weekend update].

- (US) Biden Admin confirms to propose trade rules to curtail low-value shipments exempt from tariffs under the $800 "de minimis" threshold, primarily affecting Chinese e-commerce firms - White House statement [**Note: A report by the House Select Committee on the Chinese Communist Party in June last year estimated that Temu and Shein alone are likely to be responsible for more than 30% of all packages shipped to the US daily under the de minimis provision] [weekend update].

- China said to approve plan to gradually raise retirement age for first time since 1978 - financial press [weekend update].

Japan

- Nikkei 225 closed for holiday.

- USD/JPY USD touches 140.20; Slightly below last Friday's and the Dec 2023 lows against Yen to levels not seen since July, 2023.

Korea

- Kospi closed for holiday.

- South Korea said to be in cost-sharing talks with US for US troops - US press.

Other Asia

- (TH) Thailand Commerce Min Pichai: Plans to push export growth and FTA deals; BOT should be helping Thailand's economic growth.

- Monetary Authority Singapore's (MAS) Chee Hong Tat: "Not an easy task" to revitalize the Singapore stock market - financial press.

- (TW) Reportedly Russia-linked hacker groups on Sept 12th briefly disrupted Taiwanese financial platforms including Taiwan stock exchange and Mega Financial Holding Co.’s website (2886.tw) - press (update).

North America

- (US) FBI says former Pres Trump was target of fresh "apparent assassination attempt" at his Golf club; Trump was rushed to safety - US financial press.

Europe

- (UK) Sept Rightmove House Prices M/M: +0.8% v -1.5% prior; Y/Y: 1.2% v 0.8% prior.

- (UR) Former Russian Pres Medvedev: Russia could destroy Kyiv using advanced non-nuclear weapons in response to West allowing Ukraine to use long range missiles to attack Russia.

Levels as of 01:20 ET

- Nikkei 225 closed; ASX 200 +0.3%; Hang Seng -0.1%; Shanghai Composite closed; Kospi closed.

- Equity S&P500 FUTs flat; Nasdaq100 FUTs -0.1%, Dax +0.1%; FTSE100 +0.1%.

- EUR 1.1075-1.1105: JPY 139.95-140.93; AUD 0.6703-0.6731; NZD 0.6155-0.6181.

- Gold +0.2% at $2,615/oz; Crude Oil flat at $67.77/brl; Copper -0.1% at $4.2160/lb.