Economic Data
- (CN) CHINA SEPT HSBC MANUFACTURING PMI: 47.9 V 47.8 PRELIM V 47.6 PRIOR (11th month of contraction)
- (CN) CHINA SEPT MANUFACTURING PMI: 49.8 V 50.1E; First instance of two consecutive months in contraction since early 2009
- (JP) JAPAN Q3 TANKAN LARGE MANUFACTURING INDEX: -3 V -4E (4th quarter in negative territory); LARGE ALL INDUSTRY CAPEX: 6.4% V 5.0%E; LARGE MANUFACTURING OUTLOOK: -3 V -5E
- (AU) AUSTRALIA SEPT AIG PERFORMANCE OF MANUFACTURING INDEX: 44.1 V 45.3 PRIOR (7th month of contraction)
- (KR) SOUTH KOREA SEPT EXTERNAL TRADE BALANCE: $3.15B V $2.76BE
- (JP) JAPAN AUG LOANS AND DISCOUNTS CORP M/M: +0.2% V -0.2% PRIOR
- (AU) AUSTRALIA SEPT TD SECURITIES INFLATION M/M: 0.2% V 0.6% PRIOR; Y/Y: 2.4% V 2.2% PRIOR (9-month high)
- (TW) TAIWAN SEPT HSBC MANUFACTURING PMI: 45.6 V 46.1 PRIOR; output declines at fastest rate in 10 months
- (UK) UK SEP HOMETRACK HOUSING SURVEY M/M: -0.1% V -0.1% PRIOR; Y/Y: -0.5% V -0.5% PRIOR
- (UK) UK AUG LLOYDS BUSINESS BAROMETER: 10 V 10 PRIOR
- (VN) VIETNAM SEPT HSBC MANUFACTURING PMI: 49.2 V 47.9 PRIOR
- (ID) INDONESIA HSBC SEPT MANUFACTURING PMI: 50.5 V 51.6 PRIOR
- (NZ) New Zealand Q3 Westpac Employment Confidence Index: 98.9 v 96.2 prior
- Nikkei225 -1.2%
- S&P/ASX flat
- Kospi closed
- Shanghai Composite closed
- Hang Seng closed
- Dec S&P500 -0.4% at 1,428
- Dec gold at -0.4% $1,767/oz
- Nov Crude oil -0.9% at $91.38/brl
Asian equity markets remain under pressure after China manufacturing PMI prints -- both the official and the HSBC -- remained in contraction below the 50 threshold. HSBC final PMI released on Saturday bounced slightly higher to 47.9 from 47.6 prior, but its new export orders component fell to the lowest level in 42 months. Separately, the official China PMI figure was also up from prior month but below expectations and still in contraction at 49.8. Note that this is also the first instance of two consecutive months in contraction since early 2009. AUD/USD was already under modest pressure since the open but extended its losses below $1.0330 after the PMI release, falling over 50 pips from Friday close levels. Policy decision from the Reserve Bank of Australia is the first on tap in an otherwise busy week for central banks, with a narrow majority tilted in favor of a hold. Elsewhere in FX space, NZD was the 2nd biggest loser against the greenback among the majors, treading down to $0.8265, while EUR/USD fell about 40 pips to within earshot of the $1.28 handle.
The Nikkei fell to multi week lows as Japan's large manufacturers' business sentiment remained under pressure with expectations that it will continue to worsen according to the central bank's tankan survey. The Q3 large manufacturing index was in negative territory for the fourth quarter at -3 and the outlook at -3. CAPEX component was a surprising positive, rising more than expected to 6.4%. In Japanese political news Prime Minister Noda appointed Koriki Jojima as the new Finance Minister, which was part of the cabinet reshuffle expected in today's session. Following the initial appointments the Chief Cabinet Secretary Fujimura later announced that the entire cabinet resigned ahead of the reshuffle.
Fixed Income/Commodities
- JJG: Goldman: Raised 3-month wheat forecast to $10.25/bushel, and 6-month to $9.50/bushel; Lowered 3-month soybean forecast to $18.75/bushel, and 6-month to $17.25/bushel; Corn prices to outperform soybean prices in the near-term
- (UK) UK govt (Defra) warned British consumers of 15% rise in food costs - Times
- (JP) Japan oil distributors to significantly reduce refining capacity due to decline in domestic demand, govt request to reduce competition - Mainichi press
- (IR) Iran's rial fell about 4% in Saturday trading to new record low around 28K per 1USD; Rial down about 60% so far in 2012 - financial press
- (CN) China State Council Development Research Center Researcher Zhang Liqun: Modest recovery expected in the future
- (CN) HSBC chief China economist Hongbin Qu: Beijing should step up easing to support growth and employment - financial press
- (CN) China chief economist at Industrial Bank: Sees Sept CPI falling to 1.9% y/y from 2.0% in Aug - Chinese press
- (CN) China Sept New Yuan loans seen rising to about CNY700B vs CNY704B in Aug - Chinese press
- (JP) Japan PM Noda to appoint Koriki Jojima as the new Finance Minister; announced plans to appoint 10 new ministers in a cabinet reshuffle; Japan cabinet resigns ahead of the reshuffle.
- (JP) Former BOJ dep gov/JCER president Iwata: Japan should consider purchases of foreign bonds to keep JPY from getting too strong - Nikkei News
- (JP) According to Real Estate Economic Institute Co, August prices of new condos in Japan hit their highest level in 12 months - Nikkei News
- (JP) Nikkei News commented on rising political pressure on the BOJ for more accommodative policy; New opposition LDP leader Abe called for BOJ to aim for 2-3% inflation range vs 1% current target.
- (KR) Bank of Korea (BOK): Growth in household debt in South Korea as of July-end slowed to 4.6% from 8.6% in 2011 - Korean press
- (KR) South Korea, Japan, and China completed working-level procedures for nontariff barriers and trade liberalization - Korean press
- (GR) Troika inspectors returning to Athens today after giving PM Samaras a week to finalize €13.5B austerity package to secure €31.5B frozen tranche of EU/IMF loans; Coalition still pushing for 2 year extension to implementation financial press
- (EU) Various EU nations participated in protests: Tens of thousands of Germans protested in support for a wealth tax; Tens of thousands of protesters also marched in Madrid and Lisbon on Saturday over continued opposition to govt austerity measures and high unemployment; In Paris, thousands marched in opposition to EU fiscal pact forcing govts to implement austerity - financial press
- (FR) Deutsche Bank economist Moec: France deficit reduction targets are credible for the time being
- (ES) Spain Budget Ministry: Intends to borrow about €207B in 2013, widening its debt to GDP ratio to 90.5%; 2012 public debt to GDP ratio seen at 85.3% - financial press
- (IS) Israel Foreign Min Lieberman: International sanctions should push Iran to similar uprising as last year - financial press
- (SK) Slovakia PM Fico: Believes one or two countries will be forced out of the euro zone - financial press
- Mitsubishi Materials 5711.JP: To reduce H2 copper production by 10.7%; to produce 24.8k tons/mo - financial press
- SNE Exec: To focus on medical business as core business - financial press
- Toray 3402.JP: May report H1 op profit around ¥38B vs ¥40B prior target; Rev around ¥780B v ¥790B prior target - Nikkei News
- Konica Minolta 4902.JP: May report H1 op profit of about ¥18B v ¥15.6B y/y on Rev of about ¥385B, +2% y/y; Likely to keep FY12/13 targets - Nikkei News
- Tohoku Electric 9506.JP: Sees H1 net loss of about ¥40B v loss ¥108B y/y on Rev ¥830B, +10.1% y/y - Nikkei News
- TEPCO 9501.JP: Tokyo Gas may invest in its thermal plants - Yomiuri press
- Sumitomo Mitsui Financial 8316.JP: Ends JV Mobit with Mitsubishi UFJ - Yomiuri press
- TSM: Rev in Q3 may increase over 10% q/q, topping firm's prior guidance - DigiTimes citing sources