Quiet start to a quiet week for macro data
|General trend
- Asian markets quiet & mixed to start the week. Australia (ASX Resources +0.7%, REITs +0.5%, BHP +1.3%) and Shanghai Composite outperformed (SSE Banks -1.6%, IT +6.6%); both up 0.7% during the morning.
- As telegraphed by PBOC Gov Pan on Friday, China cut its dual Loan Prime Rates by 25bps, as part of its multi-pronged and ongoing stimulus plans.
- RBA Dep Gov Hauser said he was not surprised by jobless rate (following last week’s hot employment numbers), but is slightly surprised overall employment growth has been so strong. RBA will ‘follow the data’. Says RBA models show neutral rate as between 3-4%.
- South Korea Oct 1-20 exports and imports fell against prior pace, with falls in exports to the US and EU although chip exports maintained their hot pace on a y/y basis.
- Some rare good news for Boeing over the weekend, reaching a tentative agreement with the IAM Machinists union.
- US equity FUTs flat to slightly down during the Asia session.
Looking ahead (Asian time zone)
- Mon Oct 21st (Mon night US Sept Leading Index: -0.3%e v -0.2% prior).
- Tue Oct 22nd NZ Sept Trade Balance, KR Oct Consumer Conf.
- Wed Oct 23rd (Wed night ECB Pres Lagarde speech, Bank of Canada Rate Decision, EU Oct Advance Consumer Conf).
- Thu Oct 24th AU + JP Oct prelim Mnfg PMI, KR Q3 Advance GDP, (Thu eve EU Oct prelim PMIs, US Oct prelim PMIs.
- Fri Oct 25th JP Oct Tokyo CPI, (Fri eve DE Oct Biz Climate, Fri night US Sept prelim Durable Goods, Univ of Michigan Confidence).
Holidays in Asia this week
- Wed Oct 23rd Thailand.
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opens flat at 8,283.
- RBA Dep Gov Hauser: Not surprised by jobless rate, but slightly surprised overall employment growth has been so strong.
- Corp governance concerns weigh on WiseTech Global and Mineral Resources in Australia.
- BNZ: New Zealand Sept Job Ads M/M: -0.5%.
- RBNZ: Seasonally adjusted total billings in NZ were NZ$4.4B in Sept, down 0.4 percent from Aug, and down 3.2 percent from September-23.
- Follow up: New Zealand press calls for 75bps cut by RBNZ at Nov meeting - NZ press.
China/Hong Kong
- Hang Seng opens -0.4% at 20,730; Shanghai Composite opens +0.4% at 3,276.
- China PBOC monthly loan prime rate setting (LPR): Cuts both rates by 25BPS (as foreshadowed but more than market consensus).
- China PBOC Dep Gov Lu Lei: China's financial sector continues to open up, embrace cooperation - comments at Sibos Forum.
- Follow up: China Foreign Min Wang Yi: In meeting France's Fabius says hopes EU will find ways to resolve respective differences through negotiations and consultations - financial press.
- Follow Up: China President Xi urged economic zones to step up innovations; cites ‘recent’ comments – Xinhua [update].
- China Vice Premier Ding Xuexiang: Want to stabilize ties with UK and boost cooperation - follows meeting with UK Foreign Sec Lammy [weekend update].
- China President Xi: Reiterates stance to strive to achieve 2024 targets; urges to improve policies on financial help for technology [weekend update].
- Chinese Pres Xi confirms to visit BRICS summit in Russia on Oct 22-24th – press [weekend update].
- (CN) TTN Research Alert: Earnings calls on “China outlook” puts damper on most early Q3 results to date, across multiple industries [weekend update].
- China PBOC sets Yuan reference rate: 7.0982 v 7.1274 prior.
- China PBOC Open Market Operation (OMO): Injects CNY209B in 7-day reverse repos; Net injects CNY166B v net injects CNY14.2B prior.
Japan
- Nikkei 225 opens -0.1% at 38,960.
- Japan Sept Tokyo Condominiums for Sale Y/Y: -13.7% v -50.4% prior.
- Follow up: Fresh polling again indicates ruling party LDP may miss majority at Oct 27th general election - Japanese press.
- (JP) Bank of Japan (BOJ) reportedly see 'little need' to rush rate hike in Oct, but remain on track to hike at a later stage with inflation staying in line with forecasts – press [weekend update].
Korea
- Kospi opens +0.3% at 2,600.
- South Korea Oct 1-20 Exports Y/Y: -2.9% v -1.1% prior; Imports Y/Y: -10.1% v -4.5% prior.
- Follow up: South Korea spy agency confirms North Korea agreed to send 12,000 troops for Russia to Ukraine war [weekend update].
Other Asia
- Indonesia President-elect Prabowo Subianto sworn-in as President; Announces cabinet.
North America
- Boeing Reaches tentative wage agreement with IAM union, raising offer to a 35% pay increase spread over 4 years (from 25% prior offer) - press [weekend update].
- (US) Fed's Bostic (hawk, voter for 2024; non-voter for 2025): Neutral policy rate is in 3.0-3.5% range; Needed to move policy rate because risks had shifted; Expects to reach inflation target by end-2025 - post-speech Q&A [weekend update].
- (US) NASA, NOAA: Sun Reaches Maximum Phase in 11-Year Solar Cycle [weekend update].
Europe
- Aramco CEO: CEO: Energy transition in Asia is 'far' slower and [more] complicated than many expected.
- IEA's Birol: >25% of global energy demand growth to come from Southeast Asia in the next 10 years.
- (UK) Oct Rightmove House Prices M/M: 0.3% v 0.8% prior; Y/Y: 1.0% v 1.2% prior.
- Russian Foreign Min Lavrov: US Pres Biden's comments on "being ready for nuclear talks with Russia without preconditions" are a deception - Russian state media (update).
Levels as of 01:20 ET
- Nikkei 225 +0.1%, ASX 200 +0.7%, Hang Seng -1.0%; Shanghai Composite +0.5%; Kospi +0.6%.
- Equity S&P500 Futures flat; Nasdaq100 -0.1%; Dax -0.2%; FTSE100 flat.
- EUR 1.0858-1.0878; JPY 149.09-149.69; AUD 0.6700-0.6724; NZD 0.6067-0.6084.
- Gold +0.5% at $2,743/oz; Crude Oil +0.7% at $69.19/brl; Copper +1.4% at $4.4540/lb.
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