Morning Report APAC: USD, indices rise as storm passes
- Japan’s Topix index headed for its biggest gain in more than three months
- Hurricane Irma, was destructive but didn’t reach the feared Category 5 storm
- Hang Seng Index was up 1%, while indices in China were also higher
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time)
1500: EU – ECB’s Coeure speaks in Frankfurt
US: Hurricane Irma hit Florida as a Category 4 storm. The storm's path shifted over the weekend, sparing Miami a direct hit and putting Tampa in the bulls eye, prompting evacuation orders for about 6.4 million people. The system, which has since been downgraded to a Category 2, could cost $192 billion and threatens $2 trillion of property.
Washington: The House of Representatives passed legislation Friday extending the US debt limit and government funding through December 8.
The bill, already approved by the Senate, now goes to President Donald Trump for signature. It also contains $15.25 billion in disaster aid to help with recovery efforts after Hurricane Harvey, and anticipated damage from Hurricane Irma, which is now bearing down on Florida.
Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Mick Mulvaney pressed Republicans to vote for the deal on Friday, but 90 voted against it. House conservatives were reportedly angry the debt-limit extension wasn't coupled with spending cuts.
China: CPI and PPI surprised on the upside printed 1.8% YoY for CPI (Exp. 1.6%, Prev. 1.4%) and 6.3% YoY for PPI (Exp. 5.7%, Prev. 5.5%).
PI increased driven by higher food prices, while the factory-gate prices also rose, fuelled by rising commodity costs. Inflation remained well below the government’s annual inflation regulation target of around 3% for 2017.
Food prices, the biggest component of the CPI, rose 1.2% month on month, the bureau said.
Vegetable prices rose 8.5% from July as scorching summer and widespread heavy rains fueled transport costs.
Egg prices climbed 13.5% from July while the prices of pork, a staple meat in China, rose 1.3 percent month on month.
Excluding volatile food and energy prices, the core CPI increased 2.2% year on year in August, up slightly from July’s 2.1%. The core CPI has been holding steady at a little above 2% since March.
Analysts said the pick-up in consumer inflation is unlikely to continue because of a high comparative base in September 2016 and the fading effects of seasonal factors during the rest of the year.
PPI growth was boosted by increases in the prices of steel, non-ferrous metals, as well as oil and natural gas. The sector breakdown showed factory reflation was benefiting mainly upstream industries, with downstream industries squeezed.
US yields inched up following the Fed’s Dudley continuing to emphasise on the gradual removal of monetary easing.
It is expected to extend the move higher today with North Korea not doing anything during the weekend seeing investors unwinding risk-off assets.
Core European yields were higher amid Reuters reporting that the European Central Bank has discussed on the possible reduction of QE scenarios. Peripherals extended their outperformance.
Equifax plunged 14% after the company late Thursday disclosed that personal data of 143 million Americans, including Social Security numbers, driver’s license numbers and credit card numbers, had been exposed in a hack.
Asia Pacific Stocks
- Yechiu Metal Recycling (601388 CH): New Buy at SWS, PT 7 Yuan
- BYD Electronic (285 HK): BYD Electronic Cut to Underweight at JPMorgan, PT HK$16
- Anhui Jianghuai Auto (600418 CH): Tesla Challenger NIO to Start Selling First Model in Mid Dec.
- Anxin (600816 CH): Anxin Trust Plans to Sell up to 6.8B Yuan of Preferred Shares
- China National Building (3323 HK): CNBM, Sinoma Entered Merger Pact
- Kweichow Moutai (600519): CH Kweichow Moutai Sees Strong Growth Along Belt and Road: Xinhua
- HSBC (5 HK): HSBC Bought Back 3.14M Shares at Avg 727.42 Pence Each Sept. 8
- Nanshan Aluminum (600219 CH): Nanshan Aluminum Seeks Up to 5B Yuan for Indonesian Project
- Prada (1913 HK): Prada First Half Net Income Misses Estimates
- Prada Warns Turnaround to Take Longer Than Expected
- Qingdao Haier (600690 CH): Qingdao Haier Plans to Sell up to 5.64B Yuan Convertible Bonds
- Tencent (700 HK): Tencent CEO Ma’s Charity Sells HK$645m Shares: HK Economic Times
- Wanhua Chem Group (600309 CH): Wanhua’s Borsodchem Takes EUR79m MFB Loan Using Chinese Funding
- Wharf Holdings (4 HK): Wharf Holdings Ratings May Be Cut by Fitch
- Daikin Industries (6367): Cut to neutral from buy at Goldman
- Kinden (1944): Cut to neutral from outperform at Daiwa
- Komatsu (6301): Raised to buy from neutral at Goldman
- Kubota (6326): Cut to neutral from overweight at JPMorgan
- Kura (2695): Cut to neutral from buy at Ichiyoshi Research
- Lasertec (6920): Raised to neutral from underperform at Credit Suisse
- Mitsui & Co (8031): Raised to overweight from equalweight at Morgan Stanley MUFG
- Nomura (8604): Raised to neutral from underperform at SMBC Nikko
- Shikoku Electric (9507): Rated new neutral at Okasan Securities
- Shimadzu (7701): Raised to outperform from neutral at Daiwa
- Shimizu (1803): Raised to outperform from neutral at Credit Suisse
- United Super Markets (3222): Rated new neutral at Okasan Securities
- Ateam (3662): Full-year operating profit 4.1b yen vs co. forecast 3.8b yen; forecasts OP of 4.7b yen for current FY
- Canon (7751): To invest ~23b yen in Miyazaki plant for digital cameras
- Freebit (3843): 1Q operating profit -54% to 244m yen
- Honda (7267): To launch electric car for China market in 2018
- Itokuro (6049): Raises operating profit full-year forecast 15% to 1.74b yen
- Kanamoto (9678): 9-month operating profit +14% to 12.1b yen
- Miraial (4238): Forecasts full-year operating profit +77% to 830m yen
- Nippon Kayaku (4272): Chugai files patent infringement suit against co. over Herceptin biosimilar
- Nippon Parking Development (2353): Full-year operating profit 3.1b yen vs co. forecast 3b yen; forecasts OP of 3.5b yen for current FY
- Ono Pharma (4528): Japan Health Ministry approves Opdivo for stomach cancer, Kyodo reports; Opdivo-Yervoy combo cut death risk 37% compared with Pfizer’s Sutent in some kidney cancer patients
- Poletowin Pitcrew (3657): 1H operating profit 1.12b yen vs co. forecast 997m yen
- Tsubaki Nakashima (6464): Carlyle selling stake worth 41b yen
- Companies trading ex-dividend today: Blackmores, Caltex Australia, Downer EDI, Noni B, Orora, Qube, Reliance Worldwide, Retail Food Group, Sandfire, Steadfast Group
- AGL Energy (AGL AU): Australia Keeps Pressure on AGL to Extend Life of Liddell Plant
- ANZ Bank (ANZ AU): China’s Export Engine Slows as Imports Maintain Steady Gains
- BHP Billiton (BHP), Rio Tinto (RIO) and Fortescue (FMG): Iron ore fell 1.7% to $74.36/t
- Commonwealth Bank (CBA): Said to eye global bond market this week: AFR
- Independence Group (IGO AU): Electric Vehicle Metal Demand Boom Still to Hit Nickel Market
- NAB (NAB AU): Australian Banks May Exit Wealth Management Without Being Forced
- Newcrest (NCM AU): Newmont, Newcrest Lead Attack on Australia Gold Royalty Hike
- Northern Star (NST), Evolution (EVN), Saracen (SAR), Regis Resources (RRL), Resolute Mining (RSG), OZ Minerals (OZL): Gold Hits Highest in a Year on Korean Threat as Dollar Drops
- Tatts Group (TTS), Tabcorp (TAH): Tatts Chairman Boon optimisticholders will approve deal: AFR
- Woodside (WPL), WorleyParsons (WOR), Oil Search (OSH), Beach Energy (BPT), Karoon (KAR), Origin Energy (ORG), Santos (STO): Oil Tumbles as Irma Imperils Demand in Gasoline-Thirsty Florida
- Whitehaven Coal (WHC): Trade fight looms as China curbs coal imports: AFR
– Edited by Adam Courtenay
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
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