Equities cautious in the face of CB uncertainty

Asia Market Update: Quiet FX session seen amid stepped up JP comments; Equities cautious in the face of CB uncertainty; CN Aug data dump due on Fri [including Retail Sales and IP].

General trend

- Little initial impact seen from the AU and NZ data [AU jobs, NZ GDP].

- JGB FUTs drop on bond auction [Japan MoF sells ¥1.2T v ¥1.2T indicated in 0.800% 20-year JGBs, Avg Yield: 0.8940% v 0.7520% prior, bid-to-cover: 2.51x v 3.28x prior (10 year low on bid to cover)].

- Equity markets trade mixed; Shanghai Composite lags ahead of Friday’s data.

- Property shares outperform in Shanghai/HK [China Suzhou City said to have lessened home purchase limits; >100 cities have eased their housing providence fund policies – Press; Some major China banks are reportedly cutting personal deposit rates - Chinese press].

- Guangzhou to permit larger home price reductions - Press.

- China Aoyuan Property: Received approval from bondholders to delay early redemption payment by 1 year [relates to puttable CNY bond].

- Australian ex-dividends [Fletcher Building, IGO, Ramelius Resources, Regis Healthcare, Seven Group, South32, Spark New Zealand].

- US Retail Sales in focus.

- Putin and Xi to meet today.

- China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thurs.

- RBA Gov Lowe to comment on the central bank’s annual report [Sept 16th (Fri)].

Headlines/economic data

Australia/New Zealand

- ASX 200 opened slightly higher.

- (NZ) New Zealand Q2 GDP Q/Q: 1.7% V 1.0%E; Y/Y: 0.4% V 0.0%E.

- (AU) The Panel conducting the review of the Reserve Bank of Australia (RBA) is considering whether board members' votes should be disclosed - US financial press.

- (AU) Australia to build stockpile of diesel exhaust fluid - US financial press.

- (AU) Australia Sept consumer inflation expectation: 5.4% V 5.9% PRIOR.

- (NZ) ASB Bank now expects the Reserve Bank of New Zealand to increase the OCR to a peak of 4.25% [prior 4.00%].

- (NZ) New Zealand sells NZ$350M vs. NZ$400M indicated in 2027, 2032 and 2041 Bonds.

- (AU) Australia  Aug employment change: 33.5K V 35.0KE; unemployment  RATE: 3.5% V 3.4%E.

- (AU) Australia Aug RBA Govt FX Transactions (A$): -0.7B v -1.1B prior.

Japan

- Nikkei 225 opened +0.2%.

- (JP) Japan Fin Min Suzuki: Will not pre-announce if decides to conduct FX intervention and action would be swift and without pause; Reiterates to not rule out any options on currency - doorstep comments [Sept 14th].

- (JP) Japan PM Kishida: Weaker JPY currency (yen) strengthens domestic firm ability to supply [Sept 14th].

- (JP) Japan Govt said to be using ¥50B from reserve funds on measures for feed prices.

- Press- (JP) Japan considers calling for power conservation during the winter - Japanese press.

- (JP) Tokyo, Japan, said to consider lowering coronavirus alert level.

- (JP) Japan Aug Trade Balance: -¥2.82T v -¥2.385Te (Largest on record); Adj Trade Balance: -¥2.37T v -¥2.085Te.

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].

- (JP) Japan MoF sells ¥1.2T v ¥1.2T indicated in 0.800% 20-year JGBs, Avg Yield: 0.8940% v 0.7520% prior, bid-to-cover: 2.51x v 3.28x prior.

- (JP) Japan PM Kishida: Will convene parliament session in Oct - Press.

- (JP) Japan LDP Official Katayama: Solo FX intervention likely will not be that effective.

Korea

- Kospi opened +0.2%.

- (KR) South Korea President Yoon: Current account and FX reserves not at a concerning level.

- (KR) South Korea Fin Min Choo: UDS/KRW rising fast, to take steps if 1 sided moves are seen in FX - Comments to Parliament.

- (KR) South Korea FX Authority: Closely monitoring local FX market due to volatility increasing; watching herd like behaviors.

- (KR) South Korea FX authorities said to have sold dollars to strengthen KRW - Press.

China/Hong Kong

- Hang Seng opened flat; Shanghai Composite opened +0.4%.

- (CN) China PBOC conducts CNY400B V CNY600B maturing in 1-year medium-term lending facility (MLF) AT 2.75% V 2.75%E.

- (CN) China Suzhou City said to have lessened home purchase limits - Press.

- (CN) Fitch cuts China 2022 GDP growth forecast to 2.8% (prior 3.7%), cites weak recovery.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY2.0B in 7-day reverse repos v CNY2.0B prior; Net CNY0B v Net CNY0B prior.

- (CN) China PBOC sets Yuan reference rate: 6.9101 v 6.9116 prior.

- (CN) China Cabinet to roll over 1-year relending facility two times; To extend tax reliefs for some small firms - press.

- (CN) Follow Up: China announces CNY200B in loan [special relending] support for investment [timing uncertain] - press.

- (CN) China considering increasing penalties for those who violate cyberspace security - Press.

- (CN) China State Planner (NDRC): Urges coal companies at ports to respect long term contracts and keep prices within a reasonable range; Stable coal prices key during heating season.

- (CN) China Envoy: US and China interests are intertwined, warns against cutting China out of EV supply chain - Detroit Auto Show.

North America

- (US) Labor Dept Spokesman: Talks between Railroad worker union are ongoing.

- (US) US Trade Negotiator and EU Trade Commissioner met and agreed to continue talks on US EV Tax credits.

Europe

- (UR) Ukraine President's car was involved in a traffic accident in Kyiv, Zelenskiy is not seriously hurt, cites Zelenskiy's spokesman - financial press.

- (EU) ECB’s Holzmann (Austria, hawk): Interest rates will be higher a year from now; Stagflation is possible in the Euro Zone - press interview.

- (EU) ECB's Kazaks (Latvia, hawk): ECB may have to continue raising rates beyond Feb to get inflation back to its 2% target - press interview.

- (TR) US and EU said to increase pressure on Turkey over Russia Sanctions - FT.

Levels as of 01:20 ET

- Nikkei 225, +0.2%, ASX 200 +0.3% , Hang Seng +0.5%; Shanghai Composite -1% ; Kospi -0.3%.

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

- EUR 0.9984-0.9964 ; JPY 143.58-142.79 ; AUD 0.6770-0.6739 ;NZD 0.6027-0.5997.

- Gold -0.7% at $1,696/oz; Crude Oil -0.1% at $88.38/brl; Copper +0.7% at $3.5385/lb.