DAILY EUROPEAN OPENING NEWS: Asian equities traded with little firm direction as markets awaited key data releases and central bank announcements

ASIA

Asia equity markets were lacklustre with a non-committal tone seen for most of the day after the cautious gains in the US and as the region also digested key data releases. ASX 200 (-0.1%) and Nikkei 225 (-0.2%) were subdued with weakness across miners and discouraging Chinese data weighing on Australia, while a softer JPY struggled to keep the Japanese index afloat. Hang Seng (-0.5%) and Shanghai Comp. (-0.2%) also lacked demand as an increased liquidity effort by the PBoC was clouded by a miss on Chinese Industrial Production and Retail Sales data. 10yr JGBs were lower despite the subdued risk-tone seen across markets, with prices weighed following a weaker 20yr JGB auction where the b/c, amount and accepted prices were all lower than the prior month.

PBoC injected CNY 60bln in 7-day reverse repos, CNY 30bln in 14-day reverse repos and CNY 10bln in 28-day reverse repos. (Newswires)
PBoC set CNY mid-point at 6.5465 (Prev. 6.5382)

Chinese Industrial Production (Aug) Y/Y 6.00% vs. Exp. 6.60% (Prev. 6.40%). (Newswires)
Chinese Retail Sales (Aug) Y/Y 10.10% vs. Exp. 10.50% (Prev. 10.40%)

UK

UK RICS House Price Balance (Aug) 6.0 vs. Exp. 0.0 (Prev. 1.0). RICS said that London house prices showed the weakest reading since 2008 and that number of UK house sales has not increased since November last year. (Newswires)

UK PM May is to stress her desire for deep ad special relationship with the EU post-Brexit, when she gives a speech in Florence on September 22nd. (Newswires)

UK Chancellor Hammond said Brexit requires a "time-limited interim period" in which the UK can maintain two-way market access. (Newswires)

EU

ECB’s Praet said the risks of deflation have largely disappeared and that maintaining steady policy critical to fostering a durable convergence of inflation towards target. Praet added that the strength and resilience of the recovery tends to boost our confidence that reflationary forces will gradually support headline inflation. (Newswires)
 

FX

Focus in FX markets centred around AUD/USD, as the pair initially reclaimed the 0.8000 handle on a stellar jobs report where the Employment Change more than doubled estimates and which was fuelled by a surge in Full-Time Employment. However, some of the gains were later pared following the softer than expected Chinese data. Elsewhere, other major pairs were quiet which saw EUR/USD languish near yesterday’s lows and GBP/USD unchanged around the 1.3200 level ahead of the BoE policy meeting, while CNH was pressured after the PBoC weakened the reference rate for a 3rd consecutive day.

Australian Employment (Aug) 54.2k vs. Exp. 20.0k (Prev. 27.9k, Rev. 29.2k). (Newswires)
Australian Full Time Employment (Aug) 40.1k (Prev. -20.3k, Rev. -19.8k)
Australian Unemployment Rate (Aug) 5.60% vs. Exp. 5.60% (Prev. 5.60%)

Venezuela is said to stop accepting USD for oil payments after US sanction, with oil traders in the country instructed to switch invoices to EUR. (Newswires)

COMMODITIES

Commodities were quiet overnight with WTI crude futures taking a breather from yesterday’s over 2% surge to above USD 49/bbl, which was spurred after the IEA raised demand forecasts and suggested global oil stocks were running down, while Nigeria also signalled future willingness to join the supply cut deal once production levels were satisfied. Elsewhere, gold was relatively unchanged and copper prices were sideways amid a subdued risk tone which somewhat provided the metals complex mild respite from the prior day’s selling.

Nigerian Energy Minister Kachikwu said the country is currently pumping 1.63mln bpd and will pump between 1.6mln-1.7mln bpd in 2018. The minister also added that they will accept output cap if able to hit 1.8mln bpd for 6 months and forecasts oil at USD 55/bbl in 2017 and in the USD 60s/bbl level in 2018. (Newswires)

GEOPOLITICAL

US military sources stated North Korea was observed moving mobile missile launchers and preparing hard sites in the last 48 hours. (Newswires)

The North Korean news agency has released further threats to use nuclear weapons against Japan saying that ‘Japan is no longer needed to exist near us’. (Newswires)

US

Treasury yields were modestly higher throughout the session, though did ease slightly after a lackluster auction of 30-year bonds, which tailed by 0.3bps. US 10-Year Tsy Futs (Dec) settled 6 ticks lower at 126-14+.
 

White House said US President Trump discussed issues with Democratic Congressional leaders including taxes, infrastructure and immigration, while President Trump is also said to look forward to resuming these discussions with leaders of both parties. (Newswires)

 

14 Sep 2017 - 06:24- Research Sheet- Source: RANsquawk

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