ASIA STOCKS: Tech Rally Takes A Breather
Asia Pac equities are mixed, with some caution coming through in tech/AI related space. Hong Kong markets have returned weaker, with the HSI down over 1%, tracking lower for third straight session. The tech sub index off over 1.1%. We did see US tech related bourses underperform in US Tuesday's trade, while the Golden Dragon index lost 2.24%. Note onshore China markets return tomorrow.
- Reuters also noted: "U.S. lawmakers are calling for broader bans on chipmaking equipment to China after a bipartisan investigation found that Chinese chipmakers had purchased $38 billion of sophisticated gear last year." This has potentially weighed on China tech related plays in Hong Kong.
- BBG also notes Citigroup analysts who stated that Golden Week box office results were below expectations (hurting sentiment in this space).
- Taiwan's Taiex is off around 0.50%, but still 2700, so close to recent record highs. Even with this recent run higher, offshore investors have only added modestly to local stocks, (but regional holidays, with China and South Korea still out may be a factor).
- In South East Asia, trends are mixed. Indonesia went to a fresh record high, but is now tracking modestly lower. Onshore government bond yields continue to fall, amid the dovish BI outlook, while consumer sentiment data for Sep fell to fresh lows since 2022.
- Thailand stocks are up ahead of an expected BoT cut later (last 0.55%). We also stimulus measures (0.3-0.4ppts of GDP) announced yesterday to boost consumption (via BBG).
- NZ stocks are outperforming Australia, after the 50bps RBNZ cut surprised the market.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CHINA: Bond Futures Lower Monday
- China's major bond futures are all lower Monday, kicking off the week on the back foot.
- The 10-Yr is lower by -0.06 at 107.855 after finishing last week with modest gains.
- The 10-Yr is below all major moving averages, pushing lower today.
- The 2-Yr is lower by -0.01 at 102.382 and remains below all major moving averages.
- The 10-Yr government bond is up marginally in yield at 1.77%.
AUSSIE BONDS: Futures Holding Firmer, But Away From Session Highs
Aussie bond futures hold positive but away from from best levels for the session. The 10yr future (XM) was last at 95.685, +5bps. Session highs rest at 95.70. 3yr futures (YM), were last 96.55 (+3.5bps). Session highs rest at 96.59. The slight softness in US TSY futures, with TY off -04+, maybe crimping Aussie bond futures gains at the margin.
- In the cash ACGB yield space, we are around 3-5bps weaker across the curve, led by the back end. The 3yr yield near 3.43%, off close to 4bps, while the 10yr is just under 4.29%, off close to 5bps.
- The ACGB 3/10s curve is just under +86bps, so like elsewhere, moving off recent highs.
- The AU-US 10yr differential sits off recent highs last around +20bps.
- Local news flow has been light, while the data focus this week will be on Tuesday survey/sentiment data. Tuesday sees September Westpac consumer confidence which rose each of the four months to August helped by lower rates and the prospects of further RBA easing. The NAB August business survey is also out on Tuesday. Business confidence has been trending higher since March and is positive again.
BONDS: NZGBS: Yields Lower, 2/10s Curve 8bps Flatter From Recent Highs
NZGB benchmark yields are holding lower across the benchmark, although the 2yr yield is a touch above opening lows. The 2yr yield was last near 2.93%, still down close to 3bps for the session. The 10yr is holding close to session lows, last near 4.33%, off nearly 6bps.
- The NZGB 2/10s curve has flattened further, last around +140bps. Highs from last week were close to +148bps.
- The NZ 2yr swap rate is around 2.74%, against earlier lows near 2.72%. This leaves late August lows still near-by.
- US Tsy yields have drifted a little higher in the first part of Monday dealings, but are still holding the bulk of Friday losses. The 10yr benchmark is still just under 4.10%.
- Local news flow has been light and while Q2 manufacturing activity prints tomorrow, it is unlikely to shift market sentiment. Q2 GDP prints on 18 of Sep.
