Markets await US NFP tonight

Asia market update: Asia PMI’s mixed; Nikkei revolts as USD claws back v JPY post-Ueda amid JGB yield curve flattening; Markets await US NFP tonight.

General trend

- Asia PMI’s again a mix of expansion-contraction for October.

- Japan yield curve flattened post Ueda remarks; JGB 2-year JGB yields at Dec 2008 highs, while 10-yrs up only 1.8bps with 30-yr JGB yield flat. As the day progressed the USD regained mid-152 handle after yesterday’s losses following BOJ Gov Ueda’s comments post-BOJ decision to hold rates; comments widely regarded as slightly hawkish and keeping the potential of a Dec hike by the BOJ in Dec.

- Nikkei underperformed Asia, falling -2.5%, with technology following US Nasdaq widespread losses. Autos and exporters also hit by a recovering dollar during the day after they enjoyed price rises following a rising yen as BOJ held rates.

- [Note that US equity FUTs were assisted after the bell by Amazon +6% and Intel +6.9% after earnings, despite some Apple weakness (-1.8%)].

- Australia 10-yrs hits 4.60%, highest since Nov last year. In Australian financials, Macquarie fell 4% after H1 Net income missed estimates.

- Implied volatility in offshore Yuan options hit Aug 2015 levels at 13.943.

- China Caixin Manufacturing PMIs moved back into expansion. However, analysis showed external demand and employment remain weak. Offshore Yuan initially higher on the release but then reversed for rest of the session.

- IAM union says it is endorsing Boeing’s latest offer of a 38% general wage increase, with member vote on Monday, Nov 4th (stock +2.7% A/H).

- US equity FUTs +0.2% to +0.3% during the Asia session.

Looking ahead (Asian time zone)

- Fri Nov 1st (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 -0.2% at 8,146.

- Australia Q3 PPI Q/Q: 0.9% v 1.0% prior; Y/Y: 3.9% v 4.8% prior.

- Australia Sept Household Spending M/M: -0.1% v 0.2% prior; Y/Y: 1.3% v 2.7% prior (both figures revised higher).

- Australia Sept Home Loans Value M/M: -0.3% v 1.0%e.

- Australia Oct Final Manufacturing PMI: 47.3 v 46.6 prelim (confirms 9th month of contraction).

- RBA: Announces appointment of Dr Meredith Beechey Österholm as Head of Monetary Policy Strategy.

- Australia Oct CoreLogic Home Value M/M: 0.2% v 0.5% prior [overnight update].

- Australia sells A$800M vs. A$800M indicated in 3.50% Dec 2034 bonds; Avg Yield: 4.5499% v 3.9148% prior; bid-to-cover: 3.21x v 2.31x prior.

- New Zealand Sept Building Permits M/M: +2.6% v -5.2% prior.

- New Zealand Oct CoreLogic Home Prices M/M: -0.5% v -0.4% prior [overnight update].

China/Hong Kong

- Hang Seng opens +0.5% at 20,427; Shanghai Composite opens -0.1% at 3,275.

- CHINA OCT CAIXIN PMI MANUFACTURING: 50.3 V 49.7E (moves back into expansion).

- (HK) Macau Oct (MOP) Casino Rev Y/Y: 20.8B, +6.6% v 15.5% prior.

- China National People's Congress Standing Committee (NPCSC): Proposes law amendment further ‘refining’ government debt supervision, adds provision state council.

- IMF Snr Official: Risk of deflation has increased in China; This hurts Asia countries that must compete with China's falling export prices.

- Hong Kong Finance Chief: Still confident to reach annual GDP target - comments following Q3 Advance GDP figures unexpectedly negative q/q.

- China Commerce Ministry (MOFCOM): Publishes quotas for the export of some commodities in 2025 [overnight update] many LIT companies in CN limit up (LYnas in AU only up 1%).

- China Oct top 100 developers see sales +7.1% y/y - China Real Estate Information Corp (CRIC) [overnight update].

- Follow Up: First use of new PBOC tool fills a ‘liquidity gap’ – PBOC-backed Financial News.

- China PBoC sold CNY500B in 6-month Reverse Repo operation [overnight update].

- China Commerce Ministry (MOFCOM): Publishes quotas for the export of some commodities in 2025 [overnight update].

- Hong Kong Sept M3 Money Supply Y/Y: 3.0% v 1.9% prior [overnight update].

- Hong Kong Q3 Advance GDP Q/Q: -1.1% v +0.2%e; Y/Y: 1.8% v 3.1%e [overnight update].

- China PBOC sets Yuan reference rate: 7.1135 v 7.1250 prior.

- China PBOC Open Market Operation (OMO): Injects CNY17B in 7-day reverse repos; Net drains CNY276B v net drains CNY472B prior.

Japan

- Nikkei 225 opens -1.5% at 38,504.

- Japan Oct Final Manufacturing PMI: 49.2 v 49.0 prelim (confirms 4th straight contraction).

- Bank of Japan (BOJ) Oct Economic Activity and Price Outlook: Recent data shows labor conditions tightening more for permanent workers than Part-time workers, a trend that is broadening - financial press.

- Japan JGB 2-year JGB yields at Dec 2008 highs, curve flattens post Ueda remarks.

- Japan PM Ishiba planning to hold first in-person talks with US Pres Biden on sidelines of APEC Summit in Peru in Mid-Nov - Japanese press.

- Japan Fin Min Kato: DPP tax allowance policy will lower tax revenue.

- BoJ JGB bond buying schedule for Nov; same level as month before [overnight update].

- BOJ Gov Ueda: No preconception on timing of next rate hike; Uncertainties remain but markets have slowly regained stability; no comments on FX price moves - post rate decision press conference [overnight update].

Korea

- Kospi opens -0.5% at 2,542.

- South Korea Oct Trade Balance: $3.2B v $4.1Be.

- South Korea Oct PMI Manufacturing: 48.3 v 48.3 prior [2nd straight contraction].

Other Asia

- Indonesia Oct CPI M/M: 0.1% v 0.0%e; Y/Y: 1.7% v 1.7%e.

- Taiwan Oct PMI Manufacturing: 50.2 v 50.8 prior (7th month of expansion).

- Thailand Oct PMI Manufacturing: 50.0 v 50.4 prior (flat after five months of expansion).

- Indonesia Oct PMI Manufacturing: 49.2 v 49.2 prior [4th month of contraction].

- Malaysia Oct PMI Manufacturing: 49.5 v 49.5 prior [5th month of contraction].

- Vietnam Oct PMI Manufacturing: 51.2 v 47.3 prior [returns to expansion].

- Taiwan Q3 Advance GDP (1st of 3 readings) Y/Y: 4.0% v 3.4%e [overnight update].

North America

- (CA) Canada Oct CFIB Business Barometer: 55.8 v 55.1 prior.

- (US) Q3 employment cost index (ECI): 0.8% V 0.9%E; Wages: 0.8% v 0.9% q/q.

- (US) Sept personal income: 0.3% V 0.3%E; personal spending: 0.5% V 0.4%E; Real Personal Spending (PCE): 0.4% v 0.3%e.

- (US) Initial jobless claimS: 216K V 230KE (lowest since mid-May); continuing claims: 1.862M V 1.88ME.

- (US) Sept PCE deflator index M/M: 0.2% V 0.2%E; Y/Y: 2.1% V 2.1%E; Core PCE Deflator M/M: 0.3% v 0.3%e; Y/Y: 2.7% v 2.6%e.

- (US) Oct Chicago Purchase Manager’s Index (PMI): 41.6 V 47.0E.

- (US) Weekly EIA Natural Gas inventories: +78 BCF VS. +81 BCF TO +83 BCF indicated range.

- (US) Atlanta Fed GDPNow: Forecasts initial Q4 US GDP at 2.7%..

Europe

- (IE) Ireland Oct PMI Manufacturing: 51.5 v 49.4 prior (moves back into expansion).

- (IL) Iran is reportedly planning to conduct a "major" retaliatory strike against Israel from Iraqi territory - press.

- (EU) Eurozone Oct advance CPI estimate Y/Y: 2.0% V 1.9%E; Core CPI Y/Y: 2.7% V 2.6%E.

- (EU) Eurozone Sept unemployment rate: 6.3% V 6.4%E.

- (IT) Italy Oct preliminary CPI M/M: 0.0% V -0.1%E; Y/Y: 0.9% V 0.8%E.

- (IE) Ireland Sept PPI M/M: _+0.2 v -4.3% prior; Y/Y: -1.6% v -1.7% prior.

- (UK) Chancellor of the Exchequer (Fin Min) Reeves: Have put UK public finances on stable trajectory; Tax increases in budget were necessary - press interview.

Levels as of 01:20 ET

- Nikkei 225 +2.5%, ASX 200 -0.5%, Hang Seng +1.1%; Shanghai Composite +0.4%; Kospi -0.1%.

- Equity S&P500 Futures +0.2%; Nasdaq100 +0.3%; Dax -0.1%; FTSE100 -0.1%.

- EUR 1.084-1.0889; JPY 151.79-152.54; AUD 0.6569-0.6584; NZD 0.5964-0.5984.

- Gold +0.5% at $2,762/oz; Crude Oil +2.1% at $70.67/brl; Copper +0.4% at $4.3792/lb.