DAILY US OPENING NEWS:

ASIA-PACIFIC

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%)

US

US President Trump tweeted "China has a business tax rate of 15%. We should do everything possible to match them in order to win with our economy. Jobs and wages!". (Newswires)

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

EU/UK

ECB's Jazbec states that we need more data to confirm that what we are doing is in-line with mandate, further stating that Euro is reflection of robustness growth. (Newswires)

ECB's Smets says inflation appears to have bottomed out. (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)

German Finance Minister Schauble says speech by EU's Juncker regarding future of EU is inline with Germany's view and plan to introduce Euro to poorer Eastern EU countries conforms to the Lisbon treaty. (Newswires)

FX

In FX markets, as has been in the case in other markets, price action has been on the light side ahead of key risk events. A bulk of the focus in the FX space thus far has been on CHF after the SNB kept rates unchanged as expected while tweaking their rhetoric on the CHF from ‘significantly overvalued’ to ‘highly valued’, however, the SNB also stated that they will remain active in the FX markets, subsequently leading to some choppy price action in the safe-haven. Elsewhere, NZD took a tumble in early trade after the latest News1 poll for the upcoming election put the Labour party in the lead; a result which was at odds with the NewsHub poll from earlier in the week. Finally, focus for FX markets will likely centre around GBP with markets looking to see whether or not the 2.9% Y/Y inflation rate in the UK will lead to any further dissents on the MPC.

One News Colmar Brunton poll showing: National: 40% Labour: 44% Green: 7%.

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%)

New Zealand opposition Labour Party says will not introduce new taxes before 2021, as it alters its tax working group plans prior to the general election on September 23rd. (Newswires)

GEOPOLITICAL

Reports state North Korean state agency threatened to “sink” Japan and turn the US to “ashes and darkness” for supporting sanctions against North Korea. (Newswires)

US military sources state 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)

EQUITIES

European equities (Eurostoxx 50 -0.3%) have largely followed on from the mildly negative tone seen during Asia-Pacific trade as markets eye upcoming key risk events including the BoE rate decision and US inflation report. In terms of a sector breakdown, material names are the notable laggards amid downbeat industrial production and retail sales figures from China overnight, while energy names have been supported from the recent gains in WTI and Brent. Elsewhere, UK retail names have been dealt a helping hand after Next (+10%) upgraded their guidance, which has also provided support to some of their domestic competitors including Marks & Spencer (+4.5%).

FIXED INCOME

From a fixed income perspective, paper has traded in a particularly tight range throughout the session after yesterday’s digestion of supply with just Ireland stepping up to the plate today. Note, tomorrow sees notable redemptions which some have suggested could guide price action later in the session (EUR 15.5bln IT principals, EUR 13bln GE, EUR 6bln FI, EUR 8bln AT, EUR 6bln EFSF, EUR 2bln coupons).

COMMODITIES

OPEC data is said to show compliance with cuts rose to 96% in August. (Newswires)

In energy markets, WTI crude futures continue to hold onto yesterday’s gains after the Nigerian energy minister stated that the nation would be willing to impose an output cap for six months if they were able to hit production levels of 1.8mln bpd. Elsewhere, gold has seen little in the way of price action while copper prices were sideways overnight amid a subdued risk tone which somewhat provided the metals complex mild respite from the prior day’s selling.

14 Sep 2017 - 10:31- EnergyData- Source: RANsquawk

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