Light start to week in Asia with JP on holiday

 Asia market update: Light start to week in Asia with JP on holiday; More stimulus promised w/o detail from CN but equities & bonds higher.

General trend

- Equities higher in Asia with Japan on holiday, although Hang Seng under-performed on its return from Friday's holiday (Shanghai Comp fell by 2.6% on Fri).

- WTI crude oil fell -1.5% in morning trading, with a slightly strong dollar, amid reports from US officials that Israel is ready to retaliate against Iran once the order is given and has narrowed down an Iran attack list. However, no strikes reported as of yet. Copper and precious metals also down, perhaps on lack of policy specificity out of China MOF over the weekend? (See below).

- Over the weekend, a much-anticipated briefing from China MOF again failed to release any numbers on specific support, including any support for consumption, but did say there is “room in the budget to raise further debt and increase the deficit"; Will also allow special local bonds to be used to purchase unsold homes and will expand usage scope for local govt debt. Also promised more policy measures to support the economy. Note that specific policies of support will require signing off by China’s NPC (National People’s Congress), which is meant to meet in late October.

- As China rolls out further stimulus in October with promises of more, weakness in domestic demand continued with Sept consumer inflation softening further as non-food CPI went into outright contraction, while factory-gate PPI worsened further amid its two-years of negative reads. Only a hefty increase in food prices kept the Sept CPI in positive territory.

- Perhaps in response to Beijing's recent promise to support share buybacks and new swap facilities, several Chinese companies are reporting stock buybacks.

- Today saw a scheduled joint briefing by three of China’s economic, financial and regulatory agencies MIIT, NFRA and SAMR on 'stepping up support for companies'. Once again a lack of specifics. Shanghai Composite erased its gains while Hang Seng fell further as the meeting started. However, prices recovered as the briefing continued; SSE Banks +2.5%, likely influenced by further promises of bank support.

- Singapore left its monetary policy band unchanged, as expected by a majority of analysts. MAS expects inflation to fall further to ~2% by end-2024. Singapore Q3 GDP also came in slightly hotter than expected. Overall S$ down -0.1% upon the simultaneous data releases.

- New Zealand Services sector measured its highest since Apr, but still well in contraction. Meanwhile Total Card Spending expanded compared to the prior month’s contraction.

- Aussie travel company Webjet -33% on guidance worse than estimates. Relateds Flight Centre and Corporate Travel also down -3%. Meanwhile AU ore miners outperform: FMG +3.7%; BHP +1.4%; RIO +1.6%, as the CN Dalian Iron Ore contract +3%.

- More problems for Boeing, with large a large prelim Q3 loss reported after the close on Friday and plans to reduce workforce by 10% (~17K in total).

- US equity FUTs +0.1% to +0.2% during the Asia session.

Looking ahead (Asian time zone)

- Mon Oct 14th (Mon eve India CPI).

- Tue Oct 15th (Tue eve DE Oct ZEW Econ Sentiment).

- Wed Oct 16th NZ Q3 CPI, JP Aug Machine Orders, PH+Th+ID Rate Decisions, (Tue eve UK Sept CPI).

- Thu Oct 17th JP Sept Trade Balance, AU Sept employment, (Thu eve EU Final Sept CPI, ECB rate decision, US Sept Retail Sales).

- Fri Oct 18th JP Sept National CPI, CN GDP/Industrial Prod/Retail Sales/FAI (Fri eve US Sept prelim Building Permits).

Holidays in Asia this week

- Mon Oct 14th Japan, Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 8,222.

- Australia sells A$300M v A$300M indicated in 1.75% Jun 2051 bonds; Avg Yield: 4.8254% v 4.4730% prior; bid-to-cover: 3.15x v 3.35x prior.

- New Zealand Sept Performance Service Index (PSI): 45.7 v 45.5 prior (highest since Apr and prior revised higher].

- New Zealand Sept Total Card Spending M/M: +0.3% v -0.2% prior.

China/Hong Kong

- Hang Seng opens -0.1% at 21,228 (reopens after Friday holiday); Shanghai Composite opens +0.7% at 3,241.

- China Sept CPI YOY: 0.4% V 0.6%E (update).

- China Fin Min Lan Fo’an: Govt continued to tighten its belt this year; General public revenue will not meet expectations, but we will meet fiscal targets for the year [weekend update].

- China Finance Ministry: Sees room in budget to raise debt and increase deficit; To issue special treasury bonds to replenish the capital of state banks and significantly increase govt debt; To allow special local bonds for unsold home purchases; To expand scope for usage of local govt debt [weekend update].

- China Ministry of Commerce: No agreement has been reached with EU on EV tariffs [weekend update].

- China reportedly mulls opening stock index futures and govt bonds futures market to foreign investors – press [weekend update].

- China Sept Preliminary Retail Passenger Vehicle Sales M/M: +10.6% v +10.8% prior; Y/Y: +4.5% v -1.0% prior – PCA [weekend update].

- White House has formed a team to address China espionage attack - Washington Post [weekend update].

- China PBOC sets Yuan reference rate: 7.0723 v 7.0731 prior.

- China PBOC Open Market Operation (OMO): Injects CNY23.2B in 7-day reverse repos [weekend update].

- China PBOC Open Market Operation (OMO): Injects CNY19.5B in 7-day reverse repos; Net injects CNY19.5B.

Japan

- Nikkei 225 closed for holiday.

- Japan PM Ishiba: No plans to cut Japan sales tax, for now (update).

- Japan PM Ishiba: Relations with China are not good; Hope talks with China Premier Li lead to more discussions with China [weekend update].

- Japan PM Ishiba: BOJ is not Japan govt's subsidiary; Whatever govt says, BOJ will make its own decision; No plans to cut Japan sales tax for now [weekend update].

Korea

- Kospi opens +0.2% at 2,602.

- Bank of Korea (BOK) Gov Rhee: Says stable coins have an impact on Korea's FX market - Korean press.

Other Asia

- Singapore Q3 advance GDP Q/Q: 2.1% V 2.0%E; Y/Y: 4.1% V 3.8%E.

- Singapore central bank (MAS) quarterly monetary policy statement; leaves policy unchanged .

North America

- (MX) Trump said to have suggested tariffs >200% on vehicles from Mexico – financial press [update].

- S&P Report: Warns of early signs of Sovereign FX defaults.

- Tesla car fire kills 4 in France - French press [update].

- (US) Former President Trump may have been target of another assassination attempt at Saturday rally in Coachella, CA; Trump was not in danger at any point - Secret Service statement (update).

- (US) Former Fed Pres Mester: Still room for Fed to make gradual cuts - CNBC interview (update).

- (US) Oct preliminary University of Michigan confidence: 68.9 V 71.0E; 1-year inflation expectations 2.9% v 2.7%e.

- (US) Sept PPI final demand M/M: 0.0% V 0.1%E; Y/Y: 1.8% V 1.6%E.

- Canada Sept net change in employment: +46.7K V +27.0KE; unemployment rate: 6.5% V 6.7%E.

Europe

- (IE) Ireland Sept Construction PMI: 49.0 v 50.0 prior (moves back into contraction after one month expansion).

- (IL) US officials say that Israel is ready to retaliate against Iran once order give; Has narrowed Iran attack list (update).

- (IL) Hezbollah drone attack on Israeli army base near Binyamina in northern Israel killed 4 soldiers and severely injures 7 with 40 more soldiers injured - financial press (update).

Levels as of 01:20 ET

- Nikkei 225 closed, ASX 200 +0.5%, Hang Seng +0.2; Shanghai Composite +2.1%; Kospi +1.3%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.2%; Dax +0.1%; FTSE100 flat.

- EUR 1.0915-1.0934; JPY 149.06-149.38; AUD 0.6722-0.6747; NZD 0.6082-0.6107.

- Gold +0.1% at $2,677/oz; Crude Oil -1.1% at $74.73/brl; Copper -0.4% at $4.4693/lb.