Equity markets rise – Nikkei outperforms on recent Yen weakness

Asia market update: Equity markets rise; Nikkei outperforms on recent Yen weakness; Hang Seng gains ahead of CN return; NDRC comments in focus.

General trend

- USD/JPY: Rises to the highest since Aug 16th.

- Fed Futures: Probability of rates being left unchanged at Nov meeting: 5.9% v 2.6% prior [follows stronger US jobs data]; Probability of 25bps rate cut at 94.1% v 97.4% prior.

- Yen later pared drop.

- Japan Top FX Diplomat Mimura: To monitor FX moves including speculative moves.

- Mainland CN markets return from extended holiday on Tues.

- China Exchanges to run ‘tests’ before reopening on Oct 8th [Tues] in order to ensure 'smooth' trading– Chinese media.

- China NDRC officials to hold press briefing on Tues [Oct 8th] at 10 am local time [2 GMT] about the implementation of stimulus measures – financial press.

- China, Japan and South Korea FX reserves rose in Sept.

- US President Biden: Israel has not decided on how to respond to Iran strike but should think about other alternatives to hitting oil facilities - White House press briefing [from Oct 4th].

- Lithium M&A in focus.

- Arcadium Lithium [ALTM]: Confirms approach by Rio Tinto [**Reminder Oct 4th: Reportedly in talks to be acquired by Rio Tinto that could value it at $4-6B or more – press [**NOTE: 10/03 Reportedly chatter circulating that Rio Tinto and BHP may be considering a joint acquisition a large lithium player; Albermarle and Arcadium speculated as potential targets - The Australia].

- RBNZ shadow board (NZIER): divided over a 25 or 50 basis-point cut in the OCR in October [Oct 9th (Wed)].

- RBNZ Gov Orr: Reiterates risks to inflation outlook are balanced - annual report.

- Australia cash bond market is closed on Monday for holiday.

- Samsung Electronics and LG Energy to report results on Tues.

Looking ahead (Asian time zone)

- Tue Oct 8th JP Aug Current A/c, AU Sept Business Confidence, AU RBA Minutes.

- Wed Oct 9th RBNZ Rate Decision, AU Oct Consumer Confidence, RBI Rate Decision, (Wed night US FOMC Minutes).

- Thu Oct 10th RBA’s Hunter (Thu night US Sept CPI).

- Fri Oct 11th NZ Sept Biz PMI, KR Rate Decision, IN Oct Industrial Production (Fri night US Sept PPI, Michigan Oct prelim Consumer Sentiment).

Holidays in Asia this week

- Mon Oct 7th China.

- Wed Oct 9th South Korea.

- Thu Oct 10th Taiwan (US Sept CPI).

- Fri Oct 11th Hong Kong (US Sept PPI).

Headlines/Economic data

Australia/New Zealand

- ASX 200 opens +0.4% at 8,179.

-Australia Sept Melbourne Institute Inflation M/M: +0.1% v -0.1% prior; Y/Y: 2.6% v 2.5% prior.

China/Hong Kong

- Hang Seng opens +0.9% 22,948.

-Shanghai Composite closed for holidays Oct 1st through Oct 7th (back tomorrow, Tue).

- China Sept foreign reserves: $3.32T V $3.308TE; Gold reserves: 72.8M v 72.80M troy oz prior (5th straight month of holding steady).

-China ETFs ‘surge’ in volatile Tokyo trading; Nikko Asset Management Listed Index Fund China A Share (Panda) CSI 300 rose by 32% on Fri – Nikkei.

- China home sales rise to ‘varying degrees’; cites state media on home sales during the National Day holiday period – Nikkei.

-EU Commission: Confirm proposal to impose tariffs on imports of battery EVs from China obtains necessary support from EU member states; Notes China and EU continue to work hard to explore alternative solution [Oct 4th].

Japan

-Nikkei 225 opens +1.6% at 39,239.

-Nintendo: Saudi PIF considers taking larger stake in Nintendo as well as investment in other Japanese gaming companies - Japanese press.

-Seven & I: Said to bolster takeover defenses - Japanese press.

-Japan Fin Min Kato: Reiterates weak yen has both merits and demerits.

-Japan Sept Total Reserve Assets: $1.25T v $1.23T prior.

-Japan PM Ishiba: Reiterates govt stance of no need to amend accord with BOJ at this time; to continue policy to ensure an end to deflation - Parliament comments.

- Bank of Japan (BOJ) Quarterly Regional Economic Report (Sakura): Raises assessment for 2 out of 9 regions; Maintains assessment of 7 of 9 regions unchanged.

-Bank of Japan (BOJ) announcement related to outright bond buying operations: 1-3 Years, 3-5 Years, 5-10 Years and 10-25 Years: inline with planned amounts (Reduced purchases as per new Oct schedule).

Korea

-Kospi opens +0.4% at 2,579.

-South Korea Sept Foreign Reserves: $420.0B v $415.9B prior.

-LG Energy: Guides to more than double sales by 2028.

Other Asia

-Foxconn: Reports Sept (NT$) Rev 733B, +10.9% y/y and +33.7% m/m; Q3 Rev 1.85T v 1.79Te, +19.5% q/q and +20.2% y/y; Guides Q4 to be 'roughly inline' with current market expectations.

-Singapore Central Bank (MAS): To deliver quarterly monetary policy statement and advance Q3 GDP data on Oct 14th [Mon].

- Thailand Fin Min Pichai: Trust and confidence has returned to the domestic equity market; inflation target should be a mid-point of 2-3%.

-Thailand government said to seek 2025 inflation target of 1.5-3.5% - Press.

- Vietnam Q3 GDP Y/Y: 7.4% v 6.1%e.

-Vietnam Government: Strives for Q4 GDP growth of 7.6-8.0%.

North America

-(US) Sept change in Nonfarm Payrolls: +254K V +150KE.

-(US) Sept unemployment rate: 4.1% V 4.2%E (lowest since June); Underemployment rate drops for first time since Nov 2023.

-(US) Sept average hourly earnings M/M: 0.4% V 0.3%E; Y/Y: 4.0% V 3.8%E.

-(US) NHC: Milton is forecast to intensify rapidly during the next couple of days and become a major hurricane on Monday.

-Duke Energy [DUK]: Duke Energy Florida urges customers to prepare for extended outages, widespread damage due to Tropical Storm Milton.

-Pfizer [PFE]: Starboard said to hold ~$1.0B stake - US financial press.

-Wynn [WYNN]: Granted gaming operator license in the UAE, the first of its kind in that country - press.

Europe

- ECB Villeroy (France): ECB will quite probably cut rates in Oct due to rising risk of inflation undershooting 2.0% target [Reminder Sept 30th: Economists predict ECB rate cut in Oct - FT ].

- Germany Economy Minister Habeck expects GDP to contract by 0.2% in 2024 – Germany Press [**Reminder: On Oct 1st, German Chancellor Scholz Advisor: Country struggling to achieve positive GDP growth].

Levels as of 01:20 ET

- Nikkei 225, +2.3%, ASX 200 +0.7% , Hang Seng +1.5%; Shanghai Composite closed ; Kospi +1.5%.

- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.1%, Dax +0.4%; FTSE100 flat.

- EUR 1.0977-1.0963 ; JPY 149.13-148.22 ; AUD 0.6810-0.6789 ;NZD 0.6173-0.6154.

- Gold flat at $2,666/oz; Crude Oil -0.2% at $74.25/brl; Copper +0.2% at $4.5715/lb.