Markets tread water ahead of major data and earnings rest-of-week

Asia market update: Markets tread water ahead of major data and earnings rest-of-week; GOOG earnings tonight, AU Q3 CPI tomorrow.

General trend

- Messy Japanese politics post-election with Japan PM Ishiba saying he wanted to seek a partial coalition with the DPP (Democratic Party for the People), whose 28 seats would take the LDP+Komeito ruling coalition above the 233 required to rule the lower house. Later, however, DPP Head Tamaki said DPP will NOT join LDP + Komeito, adding that he did not understand what a “partial coalition” would mean.

- At the start of trading JPY/USD had lost -6.2% during October. With three days remaining, any further decline would see the Yen’s steepest monthly drop since Nov 2016.

- Aussie dollar continues to fall, 2-month low.

- Meanwhile Bitcoin hit $70K for first time since June, goes on to as high as $71,400.

- Nikkei -0.2% at open, but recovered to be up +0.6% to outperform Asia in quiet and mixed trading.

- Ford dropped -6% after hours on cutting EBIT guidance.

** Note: It is a big week for data, with US and EU Q3 GDP, 5 of the Magnificent Seven stocks reporting, BOJ rate decision, AU + JP Retail Sales, CN PMIs, EU CPI, and capped off by US Core PCE on Thursday followed by US Non-Farm Payrolls Friday night.

- US equity FUTs -0.1% during the Asia session.

Looking ahead (Asian time zone)

- Tue Oct 29th (Tue night US Sept JOLTS).

- Wed Oct 30th (US Tues A/H earnings: GOOG FQ3, AMD FQ3), AU Q3 CPI, JP Consumer Conf, (Wed eve various Q3 Europe GDP, US Q3GDP).

- Thu Oct 31st (US Wed A/H earnings: META FQ3, MSFT FQ3), JP Sept prelim Industrial Prod + Retails Sales, AU Sept Retail Sales, CN Oct govt PMIs, BOJ rate decision, TW 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 +0.1% at 8,227.

- Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 86.4 v 87.5 prior.

- New Zealand Sept Filled Jobs M/M: 0.0% v 0.0% prior (revised lower).

- RBNZ: Sept FX Intervention Capacity (NZ$): 22.6B v 22.4B m/m.

China/Hong Kong

- Hang Seng opens +0.6% at 20,729; Shanghai Composite opens +0.2% at 3,328.

- China's Pres Xi said to have unsuccessfully pushed US Pres Biden last year to change language on Taiwan independence - financial press, citing sources.

- US White House announces final version of China Investment curbs.

- China govt to increase purchases of EVs to support industry - Xinhua.

- China State Council issues Fertility Policy Support document: To enhance housing support for families with multiple kids [overnight update].

- China Commerce Ministry (MOFCOM): Will take necessary measures to safeguard legitimate interests of Chinese firms; Urges US to immediately 'correct wrongdoings' (regarding US adding more Chinese firms into export control lists) [overnight update].

- China PBOC sets Yuan reference rate: 7.1283 v 7.1307 prior.

- China PBOC Open Market Operation (OMO): Injects CNY383B in 7-day reverse repos; Net injects CNY225B v net injects CNY33B prior.

Japan

- Nikkei 225 opens -0.2% at 38,524.

- Japan Sept jobless rate: 2.4% V 2.5%E.

- Japan sells ¥2.6T VS. ¥2.6T indicated in 2-year JGB bonds; AVG yield: 0.4540% V 0.3920% prior; bid-to-cover: 4.87X V 3.81X prior.

- Japan Democratic Party for the People Head Tamaki: Will not join LDP, Komeito ruling coalition; does not understand what a partial coalition would mean [responds to press speculation].

- Japan PM Ishiba said to seek partial coalition with the DPP (Democratic Party for the People) - Japanese press.

- Japan Fin Min Kato: Reiterates important to compile ‘meaningful’ economic package; will watch FX moves with 'higher' sense of urgency.

- Japan METI said to consider new multi-year support for chip industry - Japanese media.

- Japan govt and ruling bloc said to be arranging to convene special Diet Session to vote on PM Ishiba on Nov 11th – press [overnight update].

Korea

- Kospi opens -0.2% at 2,606.

- South Korea Sept Retail Sales Y/Y: 6.7% v 9.2% prior.

- South Korea Pres Yoon: Calls for prompt response to FX, Oil volatility - press.

- South Korea Finance Ministry; Sees limited Korean impact from US investment curbs on China - financial press.

- Bank of Korea (BOK) Gov Rhee says will 'very likely' cut 2024 GDP growth forecast to 2.2-2.3%.

Other Asia

- Singapore Sept Unemployment Rate: 1.8% v 1.9%e.

- Hong Kong Sept Trade Balance (HK$): -53.2B v -41.8Be [overnight update].

North America

- (US) Oct Dallas Fed Manufacturing activity index: -3.0 V -9.2E.

- (US) Treasury $69B 2-year note auction draws 4.130% V 3.520% prior; bid-to-cover ratio: 2.50 V 2.59 prior and 2.62 over the last 12.

- (US) Treasury $70B 5-year note auction draws 4.138% V 3.519% prior, BTC 2.39 V 2.38 prior and 2.39 over the last 12.

- (CA) Bank of Canada (BOC) Gov Macklem: It made sense to take a bigger step to normalize rates; BOC will have to discover neutral rate over time - fireside chat.

Europe

- (UK) UK said to be open to restarting China trade talks - US press.

- (IL) US CIA Dir Burns discussed a new formulation for a 28-day Gaza ceasefire and hostage deal in a meeting on Sun with Israel and Qatar counterparts - Axios.

- (UK) Oct BRC Shop Price Index Y/Y: -0.8% v -0.5%e (fastest fall for over 3 years; 8th time in 9 months that pace of price growth has weakened).

- (UK) Oct CBI Retailing Reported Sales: -6 v -10e.

- (UK) PM Starmer: Govt will be ruthless in tackling tax avoidance; To include more funding to get people 'back to work'.

- (PL) Poland Fin Min Domanski: Will maintain 2024 general govt deficit forecast of 5.7% under budget amendment; EU won't exempt Poland defense spending from excessive deficit calculation.

- (IL) Israel PM Netanyahu: Once Hamas no longer controls Gaza and Hezbollah is pushed back from the border, he will aspire to continue the process of Abraham Accords with more Arab countries.

Levels as of 01:20 ET

- Nikkei 225 +0.6%, ASX 200 +0.3%, Hang Seng +0.4%; Shanghai Composite -0.8%; Kospi -0.4%.

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

- EUR 1.0806-1.0819; JPY 152.83-153.37; AUD 0.6561-0.6686; NZD 0.5968-0.5990.

- Gold +0.4% at $2,766/oz; Crude Oil +0.1% at $67.44/brl; Copper -0.6% at $4.3377/lb.