Morning Report APAC: Impact of soft China trade data felt across Asia
- Copper and nickel prices are down on renewed fears of a China slowdown
- Gold prices have made gains on safe-haven buying
- Wheat prices have surged on signs of the growing popularity of the grain
By Saxo APAC Sales Trading
- Thailand’s 88-year-old king Bhumibol Adulyadej passed away peacefully at Bangkok’s Siriraj Hospital on Thursday. The government signalled that his only son, Crown Prince Maha Vajiralongkorn, would take the throne and called on the nation to avoid "joyful events" for 30 days.
- The country’s stock exchange will be open as usual today unless told to close, and the central bank won’t announce any closures as the government hasn’t requested any.
- Singapore Q3 GDP shrinks 4.1% Q/Q annualized. Expectation was 0%. MAS decided to keep the width of the policy and the level at which it is centered. MAS said it will maintain the rate of appreciation of the S$NEER policy band at Zero pct. MAS added that the Neutral Policy is needed for extended period.
- US: Initial Jobless claims and Continuing Claims came in as expected.
The US dollar sold off slightly on profit taking and also following the rally of bonds and gold after the weaker than expected Chinese trade data yesterday morning.
USDJPY should be supported at ¥103.50 with still around $1bn in strikes at ¥103.75 expiring today.
There is a short squeeze in GBPUSD with Hedge Funds buying back their shorts
In emerging markets, USDTHB recovered from its highs with the government and the central pushing for stability in the currency. USDCNH continues to be well supported following the release of poor China trade data and the big mover was USDKRW after the Bank of Korea decided to keep the rates at the lows of 1.25% and will keep the accommodative policy for a longer period of time.
US stocks retreated on weak Chinese economic reports and earnings season got off to a disappointing start when Alcoa Inc. AA (-1.33%) reported weak results earlier this week.
CSX Corp. rose 3.1% after the railroad operator delivered better-than-expected quarterly results.
Delta Air Lines shares reversed earlier loss to rise 1.9% after the company’s revenue in the third quarter fell short of expectations.
The FTSE 100 fell 0.7% to end at 6,977.74, breaking the 7,000 level as mining group suffered the most after Chinese exports fell by a more-than-expected 10% in September. Anglo American PLC gave up 4.8%, while Glencore PLC slumped 2.3%.
Iron ore heavyweights Rio Tinto PLC and BHP Billiton PLC slumped 4.9% and 4.4%, respectively. Separately, shares of both companies were downgraded at Citi to sell recommendations from neutral.
Hong Kong stocks
- ASM Pacific (522 HK): Rated new accumulate at Everbright
- Vanke (2202 HK): Cut to sell at UBS
- Zoomlion (1157 HK): Reinstated at neutral at Goldman
- Zoomlion (1157) issued profit warning, expects Q1 to Q3 loss of over 780mln yuan, compared to loss of RMB518m last year.
- Longfor Ppt (960) January-September contracted sales +83.4% YoY to 65.1 bn yuan.
- Sino-Ocean Gp(3377) Sep contracted sales +73% YoY to 5.63 bn yuan.
- Haitong Sec (6837) Sep operating income -40.2% YoY to 1.04bn yuan, net profit -36.9% YoY to 531mln yuan.
- China St Const(3311) Jan-Sep new construction contract +25.9% YoY to 1.2trillion yuan.
- China Railway (390) Jul-Sep new pact value amounted to 308.4bn yuan.
- Agile Ppt (3383) Sep pre-sales value +121% to 6.6bn yuan.
- Angang (347) issues positive profit alert, expects January-September to report 977mln yuan profit vs a loss last year.
- China Taiping (966) 3 subsidiaries premium income +19.9% YoY for January-September.
- China South City (1668) 3mths sales +84%YoY to $HK2.4bn, six mths sales +14%YoY to $HK4.32bn.
- Top Spring (3688) 1Q-3Q total sales -2.1% YoY to $HK4.03bn.
- Guorui Ppt (2329) Jan-Sep contracted sales to 9.9bn yuan.
- TCL(334) Jan-Sep sales +30% YoY while rev +59% YoY.
- Hanergy(566) says co is taking steps to meet SFC conditions and seeks trading resumption.
- New stocks debut: IBI Group Hldgs(1547), Goal Forward(8240), Kwong Man Kee (8023).
- Nintendo (7974 JP) cut to neutral vs outperform at Macquarie
- Fujitsu (6702 JP) raised to buy at BofAML
- Bic Camera (3048 JP): Projects FY net income up 4.3% at ¥12.5bn; also increases year-end dividend to ¥7/share, citing record net income for dividend boost.
- Fast Retailing (9983 JP): Forecasts FY net income to soar 108.1% to ¥100bn, still missing analysts’ est.
- Idemitsu Kosan (5019 JP), Showa Shell Sekiyu (5002 JP): Japanese refiner will delay planned April 2017 merger with domestic rival amid opposition from a key shareholder
- Kandenko (1942 JP): Raises FY operating profit prediction by 13.6% to 25b yen and net income projection by 13.4% to 16.1b yen
- Lawson (2651 JP): Cut to neutral from buy at Mizuho Securities, and PT lowered to ¥8,200 from ¥9,800.
- Miraca Holdings (4544 JP): Raises FY oper. profit forecast by 5.7% to ¥27.8bn; cuts net income projection by 77.8% to ¥3bn
- Mizuho Financial Group (8411 JP), Metaps (6172 JP): Mizuho, Metaps may form payment tie-up.
- Stream (3071 JP): Licheng H.K. Technology reduces stake to 16.77% from 20.62%.
- Empired Ltd (EPD AU) raised to buy from hold at Bell Potter
- Regis Resources (RRL AU) Q1 production.
- Synlait Milk (SML NZ) completes $NZ98m entitlement offer; retail bookbuild clears at $NZ3.15/share.
- BHP Billiton (BHP AU) says Olympic Dam mine preparing to resume full production.
- Michael Hill (MHJ AU) reports sale of 16m shares by Hill family.
- Elders (ELD AU) completes purchase of 30% equity in Stockco Holdings
- Cimic Group (CIM AU): co.’s Leighton Asia unit gets A$140m project.
Source: CIMB / Bloomberg
- Peter Garnry looks at how China's terrible trade numbers yesterday could hurt global equities here
- From the floor yesterday looks at the rise in vols as risk aversion increases: see From the Floor: Vols spike as risk retreats — #SaxoStrats
- Georgio Stoev recently hosted a webinar on Covered call strategies, catch the replay here
– Edited by Robert Ryan
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