Asian equities traded with little direction as the positive momentum from Wall Street was offset by weakness in Apple suppliers
The greenback remained subdued to the benefit of its major counterparts while AUD/USD put in a mixed performance
Looking ahead, highlights include UK jobs report, US PPI, DoEs, ECB’s Praet, German Bund, UK 10yr and US 30yr Bond Auction
Asia equity markets traded mixed as the momentum from Wall St. was counterbalanced by weakness in Apple suppliers following the tech giant’s product event. ASX 200 (+0.1%) and Nikkei 225 (+0.5%) gained at the open after a trifecta of record closes for the S&P 500, DJIA and Nasdaq, with strength in commodity names and financials leading the upside in Australia. Shanghai Comp. (-0.1%) and Hang Seng (-0.3%) were subdued with underperformance in the Hong Kong benchmark on a continued pull-back from the 28,000 level, while disappointment was also seen across the Apple supply chain after the tech giant’s product announcement. 10yr JGBs were lower as positive risk appetite prevailed in Japan, although downside was stemmed amid the BoJ’s presence in the market for just below JPY 1tln of JGBs in 1yr-10yr maturity range.
PBOC injected CNY 30bln via 7-day reverse repos, CNY 20bln via 14-day reverse repos and CNY 20bln via 28-day reverse repos. PBoC set CNY mid-point at 6.5382 (Prev. 6.5277)
4/9 members of the Times Shadow MPC have called for an immediate 25bps increase on the BoE’s base rate and 3/9 have urged the bank to prepare markets for a rise in the months ahead. (Times)
UK PM May’s Conservative party won a vote to ensure it has a majority at the committee stage which gives them more control in the law-making process. (Newswires)
The greenback remained subdued to the benefit of its major counterparts, in which GBP/USD extended on yesterday’s CPI-inspired gains and reclaimed the 1.3300 handle. AUD/USD was choppy as it found mild support from the somewhat improvement in Westpac Consumer Confidence data before RBA Board Member Harper’s pessimistic comments on the economy later weighed, while slight profit taking was seen in USD/JPY and related-crosses which saw the pair retest 110.00 to the downside.
RBA’s Harper said AUD strength is driven by a weak USD and that economic growth is too weak to justify a rate hike. (Newswires)
Commodities trade was extremely quiet with prices across the complex virtually unchanged overnight. Furthermore, the latest API inventory report failed to trigger a sustained reaction in WTI despite a larger than expected build in headline crude stocks, as this was nullified by a significant drawdown to gasoline inventories. Gold and copper were also flat as the greenback languished and amid the mixed risk tone in the region.
US API weekly crude stocks (8 Sep, w/e) 6181K (Prev. 2790K). (Newswires)
DOE raised 2018 crude outlook world oil demand growth to 1.69mln bpd (Prev. 1.61mln bpd). (Newswires)
Qatar’s energy minister Al-Sada said that it is appropriate for OPEC to look at measures beyond March and that participating countries have been successful in implementing commitments. (Newswires) Venezuela President Maduro said Opec/Non-Opec output cuts are likely to extend until March next year. (Newswires)
US President Trump commented on UN North Korea sanctions resolution in which he said it was “another very small step” and that sanctions are “nothing compared to what ultimately will have to happen”. There were also reports that the US warned if China were to violate the newly imposed sanctions on North Korea, it could block China access to the US financial system and international dollar system. (Newswires)
North Korea rejected the new UN sanctions, while it said it plans to establish practical equilibrium with US and will redouble efforts to increase its strength, according to KCNA citing the Foreign Ministry. (KCNA/Newswires)
Twitter sources noted reports that satellites detected new activity in alternate North Korea tunnel portal areas, which suggests preparations for future underground nuclear testing. (Twitter)
South Korea successfully conducted a live drill of air to surface missiles for precision bombing of North Korean facilities. (Yonhap)
Treasuries were lower, with yields in the short-end higher by around 2bps, while 10s and 30s yields were higher by around 5bps and 4bps respectively at the futures settlement. A grim 10yr Treasury auction tailed by 1.1bps, higher than recent averages. 10-Year T-Note Futures settled 11+ ticks lower at 126-20+.
US Supreme Court blocked an Appeals Court ruling that placed limits on Trump’s travel ban. (Newswires)