Mixed AU CPI as Nikkei leads while rest of Asia equities down ahead of big data

Asia market uUpdate: Mixed AU CPI as Nikkei leads while rest of Asia equities down ahead of big data; Focus on BOJ tomorrow + overnight Q3 European & US GDP; META & MSFT earnings.

General trend

- The Nikkei appeared unflustered by Japan’s political uncertainty, outperforming Asia +1.3% even as some opposition parties suggest collaboration and submitting a no-confidence motion against the ruling party LDP+Komeito cabinet.

- Hang Seng -2.0% and Shanghai -1.2% as chipmaker SMIC -8%, and EV maker Geely -5% and a focus on the impact of a potential Trump presidency on Chinese companies.

- ASX down amid earnings and mixed inflation data. Australia 3-year yields flat at 3.96% with Q3 CPI giving mixed signals; Headline came in slightly lower than expectations, but the mean figures were revised upwards. Aussie Stats Agency said headline was the lowest annual inflation rate since the March 2021 quarter. However, higher prices for rents, insurance and child care were the main contributors to Services inflation. Investors slightly pared the chance of an RBA rate cut this December and next February to just 26% and 42% respectively. Markets still seeing April next year as the most likely timing for a first cut.

- Overnight reports out of China appearing to confirm that at next week’s NPC China’s top legislative body will approve issuance of more than CNY10T ($1.4T) in extra debt over the next few years; And may consider stronger fiscal packages should Trump win the US election.

- AU Woolworths -6% after lowering H1 earnings expectations, ASX 200 Consumer Staples -3.7%.

- Google +5.9% A/H as the company handily beat Q3 profit and revenue estimates.
** Note that with all the data due tomorrow (see below), it is also end of the month, Oct 31st in Asia.

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

Looking ahead (Asian time zone)

- Wed Oct 30th (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 8,255.

- Australia Q3 CPI Q/Q: 0.2% V 0.3%E; Y/Y: 2.8% V 2.9%E.

- Australia Sept CPI Y/Y: 2.1% V 2.3%E.

China/Hong Kong

- Hang Seng opens -0.6% at 20,586; Shanghai Composite opens -0.4% at 3,273.

- China responds to US final curbs on Chinese technology: Urges US to stop politicizing economic matters.

- China MOFCOM: Responds to EU's EV tariff, says China and EU technical teams are in a new round of talks.

- EU imposes import duties on Chinese EVs; BYD 17.0%; Geely 18.8%; SAIC 35.3%; Tesla 7.8%.

- China Pres Xi: Will implement various existing and incremental policies; Should earnestly grasp all the work in next two months.

- Reportedly China top legislative body next week to approve issuance over CNY 10t ($1.40t) in extra debt during next few years and considering stronger fiscal package if Trump wins - press [**Note: >CNY10T amount would be in the high-end of analysts expectations] [overnight update].

- China PBOC sets Yuan reference rate: 7.1390 v 7.1283 prior (weakest since Aug 19th).

- China PBOC Open Market Operation (OMO): Injects CNY431B in 7-day reverse repos; Net drains CNY362B v net injects CNY225B prior.

Japan

- Nikkei 225 opens +0.5% at 39,102.

- Japan CDP [opposition party] Leader Noda: Asked Japan Innovation Party to vote for me to be PM; to submit no-confidence motion against cabinet.

- TSE to extend trading hours by 30 min from Nov 5th (new close to be 3:30pm local time / 06:30am GMT).

- Japan Economy Min Akazawa: Reiterates closely watching FX moves; Weak Japanese yen (JPY) can have various effects on economy.

- Japan Cabinet Office (Govt) Oct Monthly Report: Maintains overall economic assessment; Downgrades view on production [overnight update].

- Reportedly majority of respondents in new poll say Japan PM Ishiba does Not need to step down - Japanese press [overnight update].

Korea

- Kospi opens -0.4% at 2,606.

- Bank of Korea (BOK) Gov Rhee: Watching FX market volatility [overnight update].

Other Asia

- Singapore Sept M2 Money Supply Y/Y: 3.0% v 1.2% prior; M1 Y/Y: 6.5% v 3.7% prior.

- Thailand Fin Min Pichai: Want Central Bank to consider inflation and forex when deciding on monetary policy [overnight update].

North America

- US Pres Biden advisors said to visit Israel to 'try and seal a deal' to end the war in Lebanon [time-frame not specified] - Axios.

- (US) Sept advance goods trade balance: -$108.2B V -$96.0BE.

- (US) Sept preliminary wholesale inventories M/M: -0.1% V 0.1%E.

- (US) Weekly Redbook LFL Sales w/e Oct 26th: +5.6% y/y; Oct MTD: +5.3% y/y.

- (US) Aug S&P CoreLogic House Price City (20-City) M/M: 0.35% v 0.20%e; Y/Y: 5.20% v 4.80%e.

- (US) Sept JOLTS job openings: 7.44M V 8.00ME, Aug revised lower; Quits rate 1.9% v 1.9% prior.

- (US) Oct Consumer Confidence: 108.7 V 99.5E.

- (US) Oct Dallas Fed Services Activity: +2.0 v -2.6 prior.

- (US) Treasury $44B 7-year note auction results: draws 4.215% V 3.668% prior, bid-to-cover ratio: 2.74 V 2.63 prior and 2.56 over the last 12.

Europe

- (IE) Ireland Q3 Preliminary GDP Q/Q: +2.0% v -1.0% prior; Y/Y: -1.2% v -4.0% prior

- (UK) Chancellor Reeves reportedly to announce 6% minimum wage increase at budget on Wed, Oct 30th - press.

- (CH) SNB President Schlegel: Must ensure policy does not become too restrictive; SNB now focused on normalizing monetary policy.

Levels as of 01:20 ET

- Nikkei 225 +1.2%, ASX 200 -0.8%, Hang Seng -2.0%; Shanghai Composite -1.2%; Kospi -1.2%.

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

- EUR 1.0813-1.0827; JPY 153.07-153.44; AUD 0.6537-0.6571; NZD 0.5950-0.5979.

- Gold +0.4% at $2,791/oz; Crude Oil +0.7% at $67.67/brl; Copper -0.4% at $4.3470/lb.