ASIA STOCKS: Mixed Trends, Japan Down On China Concerns, Philippines Rebounds
Nov-17 04:18
Asia Pac stocks are mixed so far in Monday trade. Japan and China stocks sit weaker, while South Korea and Taiwan are higher. In South East Asia, the Philippines is the standout up over 3% (after making fresh multi year lows in recent dealings). US equity futures are tracking higher, led by Nasdaq futures, up close to 0.70% (Eminis are around +0.45% firmer). Focus is on crypto for broader risk trends, with Bitcoin up +1.65% so far today and likely aiding the US equity futures moves.
- Japan stocks are down modestly, the NKY off around 0.35%, while the Topix is off by 0.55% at the time of writing. The NKY is still above 50k at this stage. Near term focus is on China-Japan tensions. This is weighing on tourism and retail related stocks, which benefit from China visitors. Via BBG: "Yuyuantantian, a social media account linked to China’s state broadcaster and frequently used to signal official policy, published a commentary this weekend warning that Beijing “has made full preparations for substantive retaliation.” This comes after new Japan PM Takaichi made comments regarding Taiwan recently. Q3 GDP in Japan printed above expectations, but still fell in the quarter. The underlying resilience of business spending will be welcome though.
- Hong Kong's market is softer, the HSI down 0.80%, while HSTECH is down 1.2%, and looking poorer from a technical standpoint. The CSI 300 on the Mainland is off close to 0.70%.
- South Korea's Kospi is up over 1.6%, with dips supported near 4000. The Taiex is up around 0.60%. Last Friday saw close to $2bn in outflows from both markets by offshore investors. Today's better risk tone in US equity futures may be helping at the margin.
- The Philippines bourse is up a little over 3%, putting the index back to 5750/55. On Friday the index did make fresh lows back to 2020, so may be seeing some dip buyers emerge. Domestic fundamentals remain focused on fallout from the corruption scandal. From the weekend and via BBG: " More than half a million people took part in a rally organized by an influential church in Manila, calling for accountability in the Philippine government over a widening corruption scandal."
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
Oct-17 20:51
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
Oct-17 20:30
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Oct-17 20:28
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
