Morning Report APAC: Asian markets higher on NFP report
- Asian markets opened higher, as investors reacted to the poor US jobs report
- Japan's Nikkei 225 gained 1.2%, its highest level in three months
- The USD rose against some currencies, such as the EUR
- US Treasury yields moved slightly higher following the NFP numbers
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time; GMT+8)
- 1030 – JPY – Haruhiko Kuroda speaks at a Kyodo News event
- Nonfarm payrolls were lower than expected at 151,000 (Exp. 180,000) but was upwardly revised the previous month to 275,000 from 255,000. The rise came from restaurants hires: 34,000, professional and business services jobs rose 22,000; social-assistance jobs increased 21,7000. On the opposite side, the manufacturing sector lost 14,000 jobs and construction 6,000 jobs.
- Average hourly earnings for private-sector workers rose 0.1% MoM (Exp: +0.2%) and 2.4% YoY (Exp. 2.5%) from July’s 2.7% annualised gain. The unemployment rate was unchanged at 4.9% (Exp. 4.8%).
- Factory Orders rose 1.9% (Exp. 2.0%) from minus 1.8% in June. It was driven by Durable Goods orders.
- New York ISM dropped to 47.5 from 60.7
Federal Reserve speech
- Jeffrey Lacker said: "It appears that the funds rate should be significantly higher than it is now," and, "The way the data is playing out I think the longer we wait there is a material increase in risks that we run." Lacker is a non-voter member of the Federal Open Market Committee.
- The Social Democrats won a state election against Angela Merkel’s CDU party, third behind an anti-immigration party Alternative for Germany Party. It also signals a big risk for Merkel in next year Federal elections if he chooses to run.
- There was mixed reaction in the USD following the NFP, which rose against some currencies like EUR (European Central Bank meeting coming this week and the market expects it to lengthen the QE and the loss in a local elections from Merkel’s party) and JPY with the market hoping the Bank of Japan will act in its next monetary policy meeting on September 21. However, USDCAD dropped.
- USDCAD dropped after Deputy Crown Prince Mohammed bin Salman said after meeting with Vladimir Putin in Hangzhou that stability is impossible if both countries don't cooperate creating a surge in oil prices. USDCAD dropped 0.8% on that. The pair has been trading in a range since May but the 200d MA should be a strong resistance at 1.3283.
- In Emerging Markets, the market was overall quiet but more inclined to sell USD against EM. USDKRW dropped 0.5% in NY; USDCNH is still able to hold below 6.7000 level in Spot.
Foreign exchange volatilities
- Gamma sold off after the NFP report but the market is now focusing on the next BoJ meeting and buying USD calls for the date. Against JPY.
- Plenty of data in Australia this week with the Reserve Bank of Australia and GDP maintaining a biddish tone in the volatilities.
- US Treasury yields moved a bit higher following the NFP numbers but the market is only pricing a 32% chance of rate hike in September and 59% in December despite the fact that many Fed members saying that the Fed Fund rates are too low.
- European rates were fairly stable overnight.
- Data in the UK continue to surprise to the upside and gilt yield rose to a four-week high at 0.725% from a low of 0.504% mid-August.
- Data release on Friday failed to hype up a potential rate hike in September and the Dow Jones Industrial Index closed higher at 0.4% and traded to a high of 18,540 before closing at 18,491.96. Both the S&P 500 and Nasdaq followed similar patterns and gains and closed higher to 2179.98 and 5249.9 respectively.
- Shares of the European markets were boosted by the US dovish data and closed relatively higher as compared to the US markets. The UK FTSE 100 index closed 2.6% higher and the Germany Dax was up 1.4%.
- Shares of Lululemon Athletica (NASDAQ:LULU) gapped down 10.6% or $8.09 lower despite posting a stronger year-to-year result but missed analyst consensus estimates of a higher revenue even though its $0.38 earnings per share was in line with expectations. Shares of the yoga apparel company closed at $68.57 and is at a key technical support zone at around $70.
- Chaowei Power (951 HK): Raised to buy at Everbright Sec.
- Lonking (3339 HK): Removed from conviction list at Goldman
- Qingdao Haier (600690 CH): Raised to buy at DBS Vickers
- Shenzhen Overseas (000069 CH): Rated new buy at GF Sec.
- Vanke (2202 HK): Cut to add at GF Sec.
- Legislative Council polls recorded about 2.2mln voters and turnout rate ~58% – a record high
- HK Ppty: over 1,100 new units were sold over the w/ends, that's the strongest w/end sales in 8.5 years.
- Times PPTY (1233) Jan-Aug contracted sales RMB17.9bn, area 1.61 sq.m. The figures for August were RMB2.47bn and 228k sq.m. respectively.
- Sunac (1918): S&P has lowered its outlook to negative from stable as its financial leverage may worsen in 2016 due to intensive land acquisition YTD. CIMB downgrade to hold on August 30.
- Vanke (2202) Aug contracted sales RMB20bn, area 1.621m sq.m. The figures for Jan-Aug were RMB237.5bn and 17.79mln sq.m respectively.
- Yuzhou PPTY (1628) entered a financing agreement amounted no more than $400mln.
- CR Land (1109) entered a two-year fixed term RMB1.25bn financing agreement.
- CH Overseas (688) sold all of its first batch of 300 units of One Kai Tai project on Sat (Ming Pao)
- Sands (1928)’s Parisian received approval for 150 gambling tables; same number as the Wynn Palace. Parisian to commence operations on Sept 13.
- CH antitrust regulator has opened an investigation into the $35bn merger of Didi and Uber.
- Ant Financial to invest $50mln in Yum China.
- Alibaba Pictures (1060) announced that it will design and sell ~300 types of Star Trek Beyond-themed products in Greater China.
- Fosun (2196) subsidiary has gained approval for clinical test on diabetes drug Zafatek. Fosun Intl(656) bought back 2mln shares on Sep 2 with HK$22mln.
- Huadian Power (1071) announced that the Hebei Huadian 202MW wind power generator project has been approved by the Zhangjiakou Dev and Reform Commission.
- Singyes Solar (750) to sell 81% stakes of 2 subsidiaries for HK$861mln. The co made RMB356mln profit in FY15.
- Fu Shou Yuan (1448) announced that its indirect wholly-owned subsidiary SH Fu Shou Yuan has entered an inv agreement with Xuanzhou Bureau of Civic Affairs for the constr, operation and mgt of the ecological cemetery in Xuanzhou district for a total inv of RMB82.61mln
- PICC(2328): AIG sold its remaining stake in PICC for about $190mln. 110m shares at HK$13.39 (0.5% discount). (HKEJ)
- Everbright (165) has signed an agreement with the Taikang County govt for a household waste-to-energy project. Phase 1 will have a total inv of RMB400mln.
- Asahi Kasei (3407 JP): Cut to neutral at Daiwa
- Gunma Bank (8334 JP): Cut to neutral from outperform at SMBC Nikko
- M&A Capital Partners (6080 JP): Rated new positive at Storm Research
- Murata Manufacturing (6981 JP): Cut to neutral plus from outperform at Iwai Cosmo
- Okura Industrial (4221 JP): Rated new outperform at Iwai Cosmo
- Fast Retailing (9983 JP): Aug. Japan Uniqlo same-store sales -1% y/y; first decline in five months
- Hi-Lex (7279 JP): Cuts full-year oper. profit forecast 6.2% to 17.9bn yen
- Mitsui High-Tec (6966 JP): Lowers full-year oper. profit forecast 31% to 1.1bn yen; halves planned 2H dividend to 3 yen
- Nippon Parking Development (2353 JP): Forecasts oper. profit +67% to 3.3bn yen for current fiscal year
- Rock Field (2910 JP): 1Q oper. profit up 69% to 637mln yen
- United Arrows (7606 JP): Aug. same-store sales down 8.3% y/y
- Sonic Healthcare (SHL@AU) cut to equalweight at Morgan Stanley
- Primary Health (PRY@AU) raised to equalweight at Morgan Stanley
- NZX (NZX@NZ) Eight-month trading volume rises 26% y/y
- Chorus (CNU@NZ) says Clayton Wakefield to step down from board
Source: CIMB / Bloomberg
US August jobs report. Photo: iStock
– Edited by Gayle Bryant
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.
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.
Samsung Hub | 3 Church Street | # 30-01 | Singapore 049483
Company No. 200601141M