JP BoJ holds rates, Asia data fails to move markets

Asia Market Update: JP BOJ holds rates; Asia data fails to move markets; Focus on EU Sept CPI, US Core Sept PCE + Tech earnings AAPL, AMZN, INTC, UBER.

General trend

- Japan's BOJ kept rates on hold in a unanimous vote. The Statement was exceptionally short. Related commentary in the Quarterly Outlook for Economic Activity and Prices said risks to economic activity are generally balanced, while risks to prices are skewed to the upside for fiscal 2025. No mention was made of ‘unstable’ markets. [Furthermore, the political situation in Japan is unknowable with no coalition govt yet emerging, and PM Ishiba was the only known monetary policy hawk within the LDP. Ishiba's fate will be known on Nov 11th at an LDP+Komeito meeting].

- Renesas and Hitachi down post last night's earnings, while chipmaker Advantest +7%, and Makita +8%.

- Australia and Japan Retail Sales were weaker than expected, especially Japan, but neither release was market moving.

- Industrial Production for Japan came in stronger than expected.

- China PMI saw its first expansion in 6 months.

- New Zealand's apparent economic turnaround gained more steam with October Business Confidence coming in at a 10-year high.

- Samsung Q3 chip profits and outlook was slightly positive, with stock +2% on the day, while profits and revenue were broadly inline.

- China Sept Swift Global Payments dropped markedly in September back into the 3 handle.

- Microsoft -3.7% A/H post Q3 earnings that were slightly better than estimates and positive AI business outlook.

- US equity FUTs -0.5% to -0.7% during the Asia session.

Looking ahead (Asian time zone)

- Thu Oct 31st JTW Q3 advance GDP, (Thu eve EU Sept advance CPI, US Core Sept PCE).

- Fri Nov 1st (US Fri A/H earnings: (AAPL FQ4, AMZN FQ4, INTC FQ3, UBER FQ3), JP + AU final Oct Mnfg PMIs, KR Oct Exports, CN Caixin Mnfg PMI (Fri night US Oct Non-Farm Payrolls, US Oct ISM Mnfg).

Holidays in Asia this week

- Mon Oct 28th New Zealand,

- Thu Oct 31st Malaysia, Singapore.

- Fri Nov 1st India, Philippines.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 8,179.

- AUSTRALIA SEPT RETAIL SALES M/M: 0.1% V 0.3%E; Q/Q: 0.5% V 0.5%E.

- Australia Q3 Import Price Index Q/Q: -1.4% v -0.3%e; Export Price Index Q/Q: -4.3% v -4.0%e.

- Australia Sept Building Approvals M/M: 4.4% v 2.1%e.

- Australia Sept Private Sector Credit M/M: 0.5% v 0.5%e; Y/Y: 5.8% v 5.7% prior.

- New Zealand Oct ANZ Business Confidence: 65.7 v 60.9 prior (10-year high).

- New Zealand sells total NZ$500M vs. NZ$500M indicated in 2029, 2034 and 2041 bonds.

- RBNZ housing market report: Its unclear when and by how much demand for new borrowing will pick up.

China/Hong Kong

- Hang Seng opens +0.2% at 20,414; Shanghai Composite opens +0.1% at 3,267.

- CHINA OCT MANUFACTURING PMI (GOVT OFFICIAL): 50.1 V 49.9E (1st expansion in 6 months).

- Chinese media point out CD rate cuts at big banks in China amid 'robust' Q3 earnings results.

- China Sept Swift Global Payments (CNY): 3.6% v 4.7% prior (lowest in nearly one year).

- China PBOC sets Yuan reference rate: 7.1250 v 7.1390 prior.

- China PBOC Open Market Operation (OMO): Injects CNY328B in 7-day reverse repos; Net drains CNY472B v net drains CNY362B prior.

Japan

- Nikkei 225 opens -0.3% at 39,179.

- JAPAN SEPT RETAIL SALES M/M: -2.3% V -0.3%E; Y/Y: 0.5% V 2.1%E.

- BANK OF JAPAN (BOJ) LEAVES TARGET RATE UNCHANGED AT 0.25%; AS EXPECTED.

- BANK OF JAPAN (BOJ) LEAVES TARGET RATE UNCHANGED AT 0.25%; AS EXPECTED.

- LDP and DPP parties are arranging to hold leaders meeting by as early as Nov 9th – Japanese press [** Note: Japan govt and ruling bloc said to be arranging to convene special Diet Session to vote on PM Ishiba on Nov 11th – press].

- JAPAN SEPT PRELIMINARY INDUSTRIAL PRODUCTION M/M: 1.4% V 0.8%E; Y/Y: -2.8% V -3.2%E.

- Japan PM Ishiba planning to hold talks with China Pres Xi during South America trip in mid-Nov.

- Credit Agricole analysts: A steeper Treasury yield curve and higher US tariffs on China could push USD/JPY to 160 level in the event of an election victory by former President Donald Trump [overnight update].

Korea

- Kospi opens -0.7% at 2,575.

- South Korea Sept Industrial Production M/M: -0.2% v 1.2%e; Y/Y: -1.3% v 0.5%e.

- Samsung Electronics Reports Q3 final (KRW) Net 9.78T v 9.14Te ; Op 9.18T v 9.10T prelim; Rev 79.1T v 79.0T prelim;

Other Asia

- Thailand Fin Min: Forecasts USD/THB at 35.1 in 2024.

- Taiwan Central Bank (CBC): Eases rules on FX settlement amount, increases the cap of FX settlement from $50M to $100M, effective Nov 1st [overnight update].

North America

- (US) MBA Mortgage Applications w/e Oct 25th: -0.1% v -6.7% prior.

- (BR) Brazil Oct FGV Inflation IGPM M/M: 1.5% v 1.5%e; Y/Y: 5.6% v 5.6%e.

- (MX) Mexico Q3 Preliminary GDP Q/Q: 1.0% v 0.6%e; Y/Y: 1.5% v 1.3%e.

- (US) OCT ADP EMPLOYMENT CHANGE: +233K V +111KE (strongest print since July 2023); Notes hiring in the US is proving to be robust and broadly resilient.

- (US) TREASURY QUARTERLY REFUNDING ANNOUNCEMENT: TO SELL $58B IN 3-YEAR NOTES; $42B IN 10-YEAR NOTES AND $25B IN 30-YEAR BONDS: Reiterates sees nominals steady for at least the next several quarters.

- (US) Q3 ADVANCE GDP ANNUALIZED Q/Q: 2.8% V 2.9%E; PERSONAL CONSUMPTION: 3.7% V 3.3%.

- (US) Q3 ADVANCE GDP PRICE INDEX: 1.8% V 1.9%E; CORE PCE PRICE INDEX Q/Q: 2.2% V 2.1%E.

- (US) SEPT PENDING HOME SALES M/M: 7.4% V 1.9%E; Y/Y: +2.2% V -1.1%E.

- (US) DOE CRUDE: -0.5M V +1ME; GASOLINE: -2.7M V 0ME (FLAT EST.); DISTILLATE: -1.0M V -1.5ME.

- August Shippers Conditions Index (SCI) 2.9 v 0.5 m/m - FTRintel.com.

- USDA: H5N1 bird flu has been detected in swine for first time in US on a backyard farm in Oregon; Two H5N1 vaccine candidates for dairy cows are undergoing field trials.

Europe

- (EU) EURO ZONE Q3 ADVANCE GDP Q/Q: 0.4% V 0.2%E; Y/Y: 0.9% V 0.8%E.

- (EU) EURO ZONE OCT ECONOMIC CONFIDENCE: 95.6 V 96.3E.

- (BE) Belgium Oct CPI M/M: +0.5% v -0.5% prior; Y/Y: 3.2% v 3.1% prior.

- (IE) Ireland Oct Preliminary CPI EU Harmonized Y/Y: 0.1% v 0.0% prior.

- OPEC+ COULD REPORTEDLY DELAY PLANNED PRODUCTION INCREASE FROM DEC 2024 BY ONE MONTH OR MORE - PRESS.

- (UK) Chancellor (Fin Min) Reeves Autumn Budget Speech: This budget raises tax by £40B; Promising £100B in capital spending over next 5-years; Confirms to increase Capital Gains Tax from 10% to 18% for lower rate, and 20% to 24% for higher rate (will raise £2.5B/yr) (speculated to increase).

- (UK) OFFICE FOR BUDGET RESPONSIBILITY (OBR) STAFF PROJECTIONS: Pushes reaching 2% inflation target from 2025 to 2029.

- (DE) GERMANY OCT PRELIMINARY CPI M/M: 0.4% V 0.2%E; Y/Y: 2.0% V 1.8%E.

- (UK) DMO FY24/25 GILT REMIT: £296.9B VS. £298.0BE.

- (EU) ECB's Schnabel (Germany): Neutral rate subject to high uncertainty; No need to go below neutral - speech text.