Article / 07 August 2017 at 2:59 GMT

Morning Report APAC: Asian equities surge on upbeat sentiment

APAC Sales Trading Desk / Saxo Capital Markets
Singapore

 


  • The USD rallied strongly following the release of the strong nonfarm jobs data
  • Gold retreated below $1260/0z as good payroll data impacted yields and USD
  • Markets will closely watch signs of compliance with Opec and non-member crude cuts

By Saxo APAC Sales Trading

Economic data of the day (Singapore Time)

nnn













 
Speeches (Singapore Time)

  • 2245 – US: Federal Reserve’s James Bullard speaks on US economy in Nashville, Tennessee
  • 0125 – US: Fed’s Neel Kashkari speaks in Bloomington, Minnesota

Overnight news

  • Nonfarm payrolls was much better than expected at 209,000 from an upward revision of 231,000 (Exp. 180,000; Prev. 222,000). Employment in the automobile sector rose by 1,600 despite slowing sales and bloated inventories that have forced manufacturers to cut back on production.
  • The labour force participation rate rose 0.1% to 62.9%. Average hourly earnings increased 9c, or 0.3% (Bloomberg consensus 0.3%), in July after rising 0.2% in June. That was the biggest rise in 5 months. On a year-on-year basis, wages increased 2.5% for the fourth straight month.

Overnight news, North Korea

  • The United Nations Security Council unanimously agreed to ratchet up sanctions against North Korea in response to the nation's two most recent ballistic missile tests, the US mission to the UN announced on Saturday. The resolution passed after the US and its allies managed to get the Chinese on board.
  • This comes in wake of President Donald Trump's repeated criticism of China for not doing enough to stop North Korea's nuclear progress. The Council approved Resolution 2371, which builds on previous UN sanctions against North Korea, and reiterated its call for the increasingly isolated East Asian nation give up its ambitions of nuclear proliferation.


 

Foreign exchange

nnn
 

















  • The USD rallied strongly following the strong nonfarm jobs data; 94.00 in the DXY should be a first resistance. USD should continue to rally for 1 or 2 days but usually, we quickly see sellers re-emerging back. It will be the opportunity that many waited for to sell USD
  • EURUSD remains on the upward trend and 1.1750 is the intraday support. The market should continue to buy EUR crosses like EURAUD, EURNZD and EURGBP.
  • Talking about EURGBP, we confirmed the break above 0.9000 and it should remain supported above; 0.8925 will be the first big support.
  • Emerging Markets: US dollar was bid against EM following the release of the nonfarm jobs numbers but if the equity market continues to be bid, equity inflows into emerging market currencies will re-emerge, and there will be sellers of USDEM like Korea and Brazil, Taiwan.


Foreign exchange movementsnnn














  • The only buying interest is around the next Jackson Hole Fed meeting (August 24 to 26) for USD Gamma.
  • There are still buyers of downside in AUD and NZD. The risk reward of being short AUD through options as long as we remain below 0.8000 is very good.

Rates

nnn



















 
  • US yields were higher across the curve with long end outperformed, on the back of solid payroll data and unemployment rate lower.
  • European yields were dragged up by US job data surprised the market to the good side.


Commodities

nnn
























Equities
nnn

 

















  • US stocks closed higher on Friday with all three indexes dipped into slightly negative territory within the first hour of trading, highlighting that Dow ended at a record for an eighth straight session following a read on the labor market that came in above expectations.
  • GoPro Inc. surged 19.3% after the wearable video-camera maker reported a second-quarter loss of $30.5 million, or 22cts a share, compared to a loss of $91.8 million, or $0.66 a share, in the year-ago period, better than analyst’s estimated loss of $0.25 a share on revenue of $269.1 mln. Friday’s gain marked the biggest one-day percentage performance for the company since July 2014 and price went straight above its 200 day moving average, showing months of consolidation may have come to an end.
  • Yelp jumped 27.6% on Friday after the company announced the sale of its Eat24 business to Grubhub (+9.1%), and a 9cps quarterly profit contrasted to an expected loss.
  • European stocks rallied on rally in bank shares on the prospect of a rate hike by the Fed overcome losses in shares of Swiss Re AG and British home builders.
  • Swiss Re AG fell 3.1% after the Zurich-based reinsurance company reporting profits took a $360 million hit from claims in the wake of Cyclone Debbie, which ran through the Australian region in late March, dragging its first-half net earnings down to $1.21 billion from $1.87 billion in the year ago period.

Asian equities preview

Hong Kong analyst views

  • CK Hutchison (1 HK): Cut to Hold at Morningstar.
  • DJE (002672 CH): A Shares Raised to Neutral at UBS, price target 16.66 Yuan.
  • Livzon Pharma (000513 CH): A Shares New Buy at UBS, PT 56 Yuan.

Hong Kong stocks, banking sector

  • Commercial Bank Assets in China Set to Grow 10% a Year: Xinhua
  • China’s Central Bank to Increase Oversight of Fintech Industry
  • China Postal Bank Wins Approval for Offshore Preference Shares

Hong Kong stocks, property sector

  • Agile Group July Pre-Sales Value 4.66b Yuan.
  • BJ Capital Land Reports July Contracted Sales 2.06 bn Yuan.
  • Central China Real Estate July Contracted Sales 1.3bn Yuan.
  • Future Land July Contracted Sales 6.1B Yuan: Exchange Statement.
  • Gemdale (600383 CH): Gemdale July Contract Sales Fall 2.59% Y/y to 7.9b Yuan.
  • Hong Kong Government to Sell Site in Tai Po by Public Tender.
  • Hong Kong Existing Home Prices Rise 0.26% on Week: Centaline.
  • Sunac China July Contracted Sales Rise 144% Y/Y to 22bn Yuan.
  • Yanlord Gets Rights to Redevelopment Site in Shanghai for $1.6bn.

Hong Kong stocks, energy and commodities sector:

  • Aramco Is Said in Talks to Buy PetroChina Refinery Stake: WSJ.
  • China to Raise Gasoline, Diesel Prices Saturday.
  • China Shenhua (1088 HK): Shenhua’s Asset Trading Targets Power Business; Remain Suspended.
  • China Shenhua Rivals Surge as Coal Giant Flags Lower Output.

Other Hong Kong stocks

  • Aier Eye Hospital Group (300015 CH): Aier Europe Bid for Clinica Baviera Accepted by 14.2 mln Shrs.
  • China Int’l Travel (601888 CH): China International Travel 1H Preliminary Net 1.31b Yuan
  • China Life Ends Plan to Buy Shenwan Hongyuan Shares: Sec. Times.
  • China Modern Dairy (1117 HK): Mengniu to Sell HK$41.4m Modern Dairy Shares to Cofco, Danone.
  • China Resources Cement (1313 HK): China Resources Cement First Half Net Income HK$1.64 bn.
  • China United Network (600050 CH): China United Network, ICBC Sign Strategic Cooperation Pact.
  • Cosco Ship Port (1199 HK): Cosco Shipping Units Agree to Merge With PSA China, Others
  • Fuyao Glass (600660 CH): Fuyao Glass First Half Revenue 8.71bnYuan.
  • GD Power Development (600795 CH): GD Power to Remain Suspended in Shanghai Until September 4.
  • Geely Auto (175 HK): Geely Auto, Volvo, Geely Holding Set up 7.5b Yuan Lynk & Co JV
  • Guangzhou Auto (2238 HK): Guangzhou Auto July Sales 158,283 Units versus 131,154 Year Earlier.
  • HSBC (5 HK): HSBC Bought Back 1.24m Shares August 4.
  • Zhejiang Dahua Tech (002236 CH): Zhejiang Dahua Tech 1H Net 983m Yuan vs 709.7m Yuan Year Ago.
Japan analyst views
  • NOK (7240): Raised to neutral from underperform at SMBC Nikko.
  • Renesas Electronics (6723): Raised to buy from neutral at Nomura.
  • Terumo (4543): Raised to buy from outperform at Daiwa.

Japan stocks

  • Akebono Brake (7238): Turns Q1 operating profit of ¥1.9bn vs ¥1bn loss year ago.
  • Aoki Holdings (8214): Q1 operating profit -45% to ¥914mln.
  • Asahi Diamond (6140): Q1 operating profit -3.8% y/y to ¥795mln; lifts H1 forecast to 1.3b yen from 110m yen.
  • Asics (7936): H1 operating profit 16.1b yen vs co. forecast ¥14bn.
  • Bandai Namco (7832): Q1 operating profit -33% to ¥15.6bn; lifts H1 forecast 20% to ¥27bn.
  • Brother Industries (6448): Q1 operating profit -40% to ¥12.6bn; lifts full-year forecast 4.2% to ¥62.5bn.
  • Hakuhodo DY (2433): Q1 operating profit +35% to ¥7.82bn.
  • Horiba (6856): H1 operating profit ¥9.7bn vs co. forecast ¥10bn; lifts full-year forecast 4.8% to ¥22bn.
  • Inpex (1605): Q1 operating profit +23% to ¥87.2bn; raises full-year forecast 2% to ¥309bn.
  • Isuzu Motors (7202): Q1 operating profit ¥39.6bn vs analyst est. ¥32.3bn.
  • Japan Tobacco (2914): To buy Karyadibya Mahardhika in deal valued at $1b.
  • JINS (3046): July same-store sales +0.2% y/y.
  • Keihin Corp. (7251): Q1 operating profit -8.8% to ¥5.8bn; boosts full-year forecast 8.1% to ¥20bn.
  • McDonald’s (2702): July same-store sales +10.9% y/y.
  • Minebea Mitsumi (6479): Q1 operating profit 67b yen vs analyst est. ¥61.3bn.
  • Mitsubishi Estate (8802): Q1 operating profit -24% to ¥35.8bn.
  • Nichiden (9902): Q1 operating profit +43% to ¥1.2bn; to split shares 2-for-1 on October 1.
  • Nippon Sheet Glass (5202): Q1 operating profit +23% to ¥8.76bn.
  • Nissan Chemical (4021): Q1 operating profit +5.6% to ¥10bn.
  • NTT (9432): Q1 operating profit +0.9% to ¥491.6bn.
  • Okamoto Industries (5122): Q1 operating profit -6.9% to ¥2.83bn; lifts H1 forecast 4.1% to ¥3.8bn.
  • Pacific Metals (5541): More than doubles size of losses expected for H1; also widens FY loss forecasts.
  • Showa Shell (5002): Prelim. H1 operating profit ¥23bn vs earlier forecast ¥35bn.
  • Square Enix (9684): Q1 operating profit +44% y/y to ¥12.9bn.
  • Sysmex (6869): Q1 operating profit -10% to ¥12.4bn.
  • Toyota (7203): Q1 operating profit 574.3b yen vs analyst est. ¥548.2bn; raises FY forecast 16% to ¥1.85trillion; confirms capital tie-up with Mazda.
  • United Arrows (7606): Q1 operating profit +16% to ¥2.44bn.
  • W-Scope (6619): Prelim. H1 operating profit 355m yen vs earlier target ¥1bn; cuts FY forecast 58%.

Australasian analyst views

  • BSL AU: Bluescope Raised to Overweight at JPMorgan, price target $A15.
  • DXS AU: Revenue for Dexus Could Rise on Higher Office Rents, New Assets.
  • SGM AU: Sims Metal Cut to Neutral at JPMorgan, PT $A13.60.
  • TME NZ: Trade Me Raised to Hold at Morningstar.

Australasian stocks

  • CBA AU: Commonwealth Bank’s Narev Intends to Stay as CEO: Australian;CBA Says Error in Its Deposit Machines Acknowledged and Fixed.
  • NZX NZ: NZX Says It Needed to Restart X-Stream Trading Platform.
  • ORG AU: Origin Energy Is Said to Weigh Sale of Smart Meter Business: AFR.


nnn

Toyota has confirmed its capital tie-up with Mazda; the two car giants will consider a joint investment in a new plant in the US, and working jointly on electric car technology. Photo: Shutterstock

 

– Edited by Robert Ryan


This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter

All material contained herein is provided for your general information. The information and commentaries are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Saxo Capital Markets Pte. Ltd. (“SCM SG”). Any expression of opinion (which may be subject to change without notice) is personal to the presenter and/or author; they do not reflect the view or opinion of SCM SG or its affiliates, neither do they constitute an endorsement of SCM SG’s view or analysis of the same.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. SCM SG does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment based on any commentaries or information provided here.
For further information, please click here.  


Saxo Capital Markets Pte Ltd ("Saxo Capital Markets") is a licensed subsidiary of Saxo Bank A/S, an online trading and investment specialist. Saxo Capital Markets serves as the APAC headquarters and holds a capital markets services licence under the Monetary Authority of Singapore; and a commodity broker licence issued by the International Enterprise Singapore. Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, the leading multi-asset online trading platforms.
Trading risks are magnified by leverage - losses can exceed your deposits. Trade only after you have acknowledged and accepted the risks. You should carefully consider whether trading in leveraged products is appropriate for you based on your financial circumstances. Please consider our Risk Warning and General Business Terms before trading with us. Please see full General Disclaimer.

Thousands of serious traders receive free news and analysis from Saxo Capital Markets each day. Saxo Capital Markets never sends these emails unsolicited; they are sent following acceptance of your membership and subscription request by Saxo Capital Markets at saxomarkets.com.sg. If you do not wish to receive any emails from Saxo Capital Markets in the future, please reply to this email with the word "UNSUBSCRIBE" in the subject header.

Copyright | Disclaimer | Risk Warning | Privacy Policy | Contact Us
Samsung Hub | 3 Church Street | # 30-01 | Singapore 049483
Company No. 200601141M

Relevant articles for you

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail