CHINA PRESS: China To Continue With Proactive Fiscal Policies
Beijing will maintain the stability and continuity of proactive fiscal policies to support its goal of keeping economic growth within a reasonable range during the upcoming 15th Five-Year Plan period, Yicai.com reported. The proposal of the five-year plan released this week proposed “leveraging the role of proactive fiscal policy and enhancing fiscal sustainability”, which reflects the urgent need for counter-cyclical adjustments including expanding fiscal spending and subsidising consumption to stabilise economic fundamentals, while standardising debt management and optimising government spending structure to ensure fiscal sustainability, the newspaper said citing Liu Rong, professor at Southwestern University of Finance and Economics.
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AUSSIE BONDS: Little Changed Ahead Of RBA Policy Decision
ACGBs (YM -1.0 & XM +1.0) are slightly mixed ahead of the RBA Policy Decision.
- Building approvals fell 6.0% m/m (estimate +2.6%) in August versus revised -10.0% in July.
- Private-sector home approvals fell 2.6% m/m versus revised +1.3% in July.
- Cash US tsys are slightly cheaper, with a steepening bias, in today's Asia-Pac session after yesterday's bull-flattener.
- MNI SECURITY: Trump Admin Will Proceed w/AUKUS Following Pentagon Review - Nikkei. Nikkei Asia reporting, "The Trump administration will proceed with the AUKUS defence pact linking the U.S., U.K. and Australia, maintaining the original timeline that includes the sale of three Virginia-class submarines to Canberra beginning in 2032..." The report comes after a Pentagon review in June, ordered by US Undersecretary of Defence Elbridge Colby, threw doubt over US participation in the nuclear submarine alliance.
- Cash ACGBs are 1bp cheaper to 1bp richer with the AU-US 10-year yield differential at +17bps.
- The bills strip is -1 to -3 across contracts.
- RBA-dated OIS pricing gives a 25bp rate cut today a 3% probability, with a cumulative 17bps of easing by year-end.
CHINA PRESS: Stable Operation Of Captial Market To Be Supported
China’s capital market will continue with its stable and positive development supported by good economic momentum, coordinated policy efforts, and inflows of medium- and long-term funds, said Securities Daily in a commentary. The stock market valuation is returning to a reasonable range at an accelerated pace, which has improved the safety margin of the market and led to insurance and mutual funds increasing their allocation, which will help smooth short-term market fluctuations and guide more rational investment behaviour, the newspaper said.
CHINA: Manufacturing PMI Hits Six Month High
- China's RatingDog China PMI Mfg for September was +51.2, up from +50.5 in August and the highest since March.
- Having contracted in May and July on trade war related volatility, today's strong release will be pleasing as some signs of the first half strength may not be sustained.
- Output was up to 52 from 50.5 in August and New orders were stronger than the month prior and the highest print since February.
- RatingDog China PMI Services for September was 52.9 from 53.0 in August.
- Employment declined to +48.4 from 48.7 for the lowest since April.
- Prices charged rose relative to the last month.
