Mostly green on the screen following the U.S. gains and Fed minutes. Most sectors gained with telcos ahead by more than 0.5% followed by real estate and healthcare. Materials and energy were both lower by c. 0.25%. Despite the overall market advance, MUFG -1.0%, SMFG -0.5% Mizuho -0.2% and Standard Chartered -0.6% gave way following the IMF noting potential profitability issues going forward.
The latest Japanese polls show PM Abe’s coalition will remain in control of parliament. The elections are set for October 22nd. September PPI was bang inline with expectations. Both ABC-Mart -3.3% and FamilyMart Uny -3.3% trimmed some of their FY forecasts. Reports T-Mobile and Sprint are moving closer to finalizing a deal boosted Softbank +3.6%. Toshiba +3.3% gained following yesterday’s removal from the TSE’s downgrade watch list. After the close, Fast Retailing saw its FY OP outlook a touch ahead of consensus.
Greater China was mixed with the mainland giving ground small. The tech sector was in focus following yesterday’s WSJ report indicating Chinese regulators are considering taking 1% stakes in a number of companies including Tencent -0.4%, Wiebo and Alibaba. September auto sales rose 3.3% y/y. The market awaits Great Wall Motor (suspended) to clarify the BMW -0.4% jv story. Today, reports indicated the Bavarian car maker will outsource some Mini production to the Chinese company. Wharf Holdings +2.5% setup a special purchase agreement with LVGEM Real Estate Inv. Co. to sell a unit that is developing property in the Kwun Tong area. CSPC Pharma (suspended) conducted a placement of 157m new shares.
S. Korea advanced for the 3rd consecutive day since returning from holiday. Brokers saw buying interest from both locals and foreigners with the construction sector also in favor.
Australia managed to overcome the basic resources weakness with all other sectors advancing. August home loan approvals gained twice the consensus estimate.
The Spanish drama continues as PM Rajoy establishes a deadline for Catalan to clarify its independence position. Catalan Pres. Puigdemont has until Monday morning to state explicitly if he has declared independence. If yes, he then has 3 more days to rescind the declaration. Stay tuned……
The £ has come under pressure after EU Brexit negotiator Barnier declared talks regarding the financial settlement “are in deadlock.”
The markets have had minimal moves moving towards highs after better than expected EU industrial production but then back towards lows on the above Brexit headlines. Real estate has gained more than 0.5% thanks to higher than expected U.K. RICS housing prices. Most sectors green but starting to seep also on the Brexit story. Energy has lagged throughout following an IEA sector outlook. It believes the decline in crude inventories will end as U.S. shale production and other supplies will offset the OPEC/Russia bloc output cuts.
Sanofi -0.6% noted Q3 sales will being negatively impacted 4-4.5% by currency headwinds.
Vivendi +1.4% has officially launched a public buyout of Havas +3.2% at €9.25/sh.
At its AGM, Sky +1.5% reported a 5% increase in revenues topping forecasts. James Murdoch has won support of shareholders to be reelected as chairman.
Dong Energy -4.3% has been one of the day’s worst performers. A Goldman unit is selling its stake that amounts to 2.75% of outstanding capital.
Financials are in focus on our side of the pond with JPM already on the tape and Citi due as well.
Market Levels and Macro Data
|UK||RICS House Price Balance||Sep||4%||6%||6%||—|
|JN||Bank Lending Incl Trusts YoY||Sep||—||3.00%||3.20%||—|
|JN||Bank Lending Ex-Trusts YoY||Sep||—||3.00%||3.20%||—|
|AU||Consumer Inflation Expectation||Oct||—||4.30%||3.80%||—|
|AU||Home Loans MoM||Aug||0.50%||1.00%||2.90%||2.80%|
|AU||Owner-Occupier Loan Value MoM||Aug||—||0.90%||0.90%||1.30%|
|AU||Credit Card Purchases||Aug||—||A$26.9b||A$25.6b||—|
|AU||Credit Card Balances||Aug||—||A$51.3b||A$51.3b||—|
|JN||Tokyo Avg Office Vacancies||Sep||—||3.17||3.35||—|
|JN||Tertiary Industry Index MoM||Aug||0.10%||-0.20%||0.10%||—|
|FR||CPI EU Harmonized MoM||Sep F||-0.10%||-0.20%||-0.10%||—|
|FR||CPI EU Harmonized YoY||Sep F||1.10%||1.10%||1.10%||—|
|FR||CPI MoM||Sep F||-0.10%||-0.20%||-0.10%||—|
|FR||CPI YoY||Sep F||1.00%||1.00%||1.00%||—|
|FR||CPI Ex-Tobacco Index||Sep||101.32||101.3||101.47||—|
|UK||Bank of England Credit Conditions & Bank Liabilities Surveys|
|EC||Industrial Production SA MoM||Aug||0.60%||1.40%||0.10%||0.30%|
|EC||Industrial Production WDA YoY||Aug||2.60%||3.80%||3.20%||3.60%|
|IN||Industrial Production YoY||Aug||2.60%||—||1.20%||—|
|CA||New Housing Price Index MoM||Aug||0.20%||—||0.40%||—|
|CA||New Housing Price Index YoY||Aug||—||—||3.80%||—|
|CA||Teranet/National Bank HPI MoM||Sep||—||—||0.60%||—|