Asian Macro Initial Thoughts - Expect a weak open ahead of China PPI & Inflation data.

This and previous notes can be found at asianmarketsense.com
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Asia volumes remain low with caution on China policy and also the second night of the Rosh Hashanah Jewish holiday. Expect consolidation

Australia Futures indicate market to open lower; weakness in US, more companies going Ex Div (incl engineering company Monadelphous Group Limited (ASX: MND), entertainment company Nine Entertainment Co Holdings Ltd (ASX: NEC), and mining giant South32 Ltd (ASX: S32).) Gold & Iron Ore weak but Oil seeing a rebound. Govt indicates an easing of lockdowns.
Weekly jobs and payroll numbers due.
Japan Nikkei local futures -22pts Chicago Futures -10pts having closed Wednesday at a six month high with CS turning cautious; expect consolidation after recent rally.
S Korea Expect markets to open lower following the weakness in the US. Local concerns over more regulation for on-line platforms. Defence stocks in focus after N Korea holds a nighttime military parade. 
Taiwan Expect market to open lower following weakness in the US overnight. Light volumes continue as investors look for clarity. Yesterdays selling attributed to rumours of a covid spike in cases, CECC only reported 7 cases so may see some bargain hunting after the open.
China Expect market to open lower with China futures weak and the Dragon Index dropping in US trading as Top Ecommerce executives called into see the regulator. Expect caution ahead of Inflation and PPI data on the open
HK ADR’s -177pts at 26,143 with weakness in Chinese Financials and Ecommerce names.  
US Futures 
Opened Dow -9 pts. S&P 500 futures flat and Nasdaq 100 futures -0.07%.

DOW -0.2%, NDX -0.57%, S&P -0.13%, Russel 2K -1.14%
Markets opened lower and dipped in the morning session, they rebounding around lunch and then traded sideways in the red in the PM.
Coinbase -3.2% on news it received a notice of possible enforcement action from the Securities and Exchange Commission.
Sentiment weak on concerns that the Fed may still start tapering this year.
JOLTs showed a record number of openings raising concerns that output would be hurt by the lack of staff, thought to be related to the delta covid.
“Beige Book,” showed U.S. businesses are experiencing rising inflation that is being intensified by a shortage of goods and likely will be passed onto consumers in many areas. It added that growth overall had “downshifted slightly to a moderate pace” amid rising public health concerns during the July through August period that the report covers.
“The deceleration in economic activity was largely attributable to a pullback in dining out, travel, and tourism in most districts, reflecting safety concerns due to the rise of the delta variant, and, in a few cases, international travel restrictions,” the report said all of which adds to the pressure on the Fed.

Banks JPMorgan Chase -0.5%, Citigroup -1.1% Wells Fargo -1.1%, Amex -0.5%
Work from home names: Facebook -1.2%, Apple -1%, Amazon +0.5%, Netflix -0.1%,  Disney +0.4%, Zoom Video -2.1%, Alphabet -0.4% and Microsoft flat,
Tech NXP Semi -2.2%, Nvidia -1.4%, Micron -1.9%, AMD -2.7%, Skyworks -2.1%
Re-opening stocks  Boeing -1.3%, Caterpillar -0.7%, Simon Property -0.7%, Kohl’s -3%, Nordstrom -2.7%, Gap -2.4%, United Airlines -2.2%, Carnival -3.3%, Wynn Resorts -1.2%, Chevron -0.7%, Exxon Mobil -0.9%,  
Lock down names Campbell Soup +0.3% General Mills +4.6%, JM Smucker +1.9%
DATA
MBA 30 yr Mortgage Rate 3.03% vs 3.03% prior
MBA Mortgage Applications -1.9% vs -2.4% prior
Redbook +16.5% YoY vs 18.6%
IBD/TIPP Economic Optimism Sept 48.5 vs 53.6 Aug (F/cast was 53)
JOLTs Job Openings Jul 10.934m vs 10.185m Jun (F/cast was 9.9m)
10yr Note Auction 1.388% vs 1.34% prior
Consumer Credit Change Jul $17b vs 37.86 Jun revised from 37.69b (F/cast was 29b)
Fed Beige Book - downshifted slightly to a moderate pace
After market
API Crude Oil Stock Change -2.882m vs -4.045m Prior (Consensus -3.832m)
USD was slightly stronger vs Yen & Euro. Bitcoin -1.7% @ 46,140.04,  VIX -1% @ 17.96,  US T10 @ 1.336% fell after the auction
OIL Brent +1.42%, WTI +1.52%  on low output post Hurricane Ida
Gold -0.43%, Silver -1.61%, Copper -1.07% Platinum -2.15%, Palladium -4.57%.
AHEAD Initial Jobless Claims, 4 wk average, Continuing Claims, EIA Oil Report

DAX -1.47%, CAC -0.85%, FTSE -0.75%
Markets opened lower and selling down. FTSE and CAC rebounded towards flat. DAX trended lower and traded sideways. Caution ahead of ECB rate meeting. Auto’s the key laggard but most sectors -VE
DATA
France 
Non Farm Payrolls Q2 +1.1% QoQ vs +0.6% Q1 revised (F/cast was 1%)
Private Non Farm Payrolls Q2 +1.4% QoQ vs +0.8% Q1 revised (F/cast was +1.2%)
Balance of Trade Jul €-6.96B vs €-6.05B Jun (F/cast was €-6.2B)
Current Account Jul €-3.5B vs €-0.9B Jun (F/cast was €-1.6B)  
AHEAD
EUROZONE ECB rate meeting
GERMANY
 Balance of Trade, Imports, Exports, Current Account
FRANCE No data due  
UK  No data due 

JAPAN 
Nikkei local futures -22pts Chicago Futures -10pts having closed Wednesday at a six month high with CS turning cautious; expect consolidation after recent rally.
Yen currently 110.25
Data due  Foreign Stock and Bond Investment
Later Machine Tool Orders
Govt expects to ease covid restrictions around November; provided most people are vaccinated.
PM Suga will visit Washington later this month for a four-way meeting of leaders from the United States, Japan, Australia and India, Kyodo News reported on Wednesday.
Sanae Takaichi the female politican enters the LDP leadership race; conservative favours nuclear power and has similar policies to former PM Abe.
Mizuho Bank experienced a system failure which disrupted about 100 automated teller machines on Wednesday, the Japanese major banking group said, marking the seventh such outage this year. The failure occurred around 9:20 a.m. due to a "hardware problem," but affected services have been restored, Mizuho Bank said
Japan’s 99 regional banks logged an aggregate net profit of ¥328.4 billion in April-June, up 46.1% from a year before, according to data compiled by Jiji Press. The rise mainly reflected lower credit costs for possible loan defaults.
Carlyle said on Wednesday it led a $312 million funding round for Japanese biotech company Spiber Inc, joining other global investors in betting on a growing number of late-stage Japanese startup firms.
Japanese medical device maker PHC Holdings Corp, formerly Panasonic Healthcare, will list on the Tokyo Stock Exchange on Oct. 14 in an initial public offering (IPO) worth up to 197.7 billion yen ($1.8 billion).
PayPal Holdings Inc (PYPL.O) said it would acquire Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 billion largely cash deal, taking another step to claim the top spot in an industry experiencing a pandemic-led boom. The deal tracks rival Square Inc's (SQ.N) agreement last month to buy Australian BNPL success story Afterpay Ltd (APT.AX) for $29 billion, which experts said was likely the beginning of a consolidation in the sector.
Softbank Telecom arm considering battery tech from 3DOM as it looks at new investments Slight +VE

SOUTH KOREA 
Expect markets to open lower following the weakness in the US. Local concerns over more regulation for on-line platforms.  Defence stocks in focus after N Korea holds a nighttime military parade. 
No data due
Quadruple witching
but impact minimal
South Korea is drawing up a plan on how to live more normally with COVID-19, expecting 80% of adults to be fully vaccinated by late October,
health authorities said on Wednesday. +VE
North Korea appears to have staged a night-time military parade of a type it has used in the past to unveil new military hardware including large ballistic missiles, South Korean and other media focused on the country reported on Thursday -VE.
Urban air mobility is the ultimate solution to the side effects of hyperurbanization, and businesses and governments alike should work together to open up the skyway, a Hyundai Motor executive in charge of the UAM business said Wednesday. +VE
Disney+, another US-based content giant, is to arrive in South Korea in November, raising expectations of a new phase of growth for the local streaming market after Netflix’s entry years ago. Slight -VE
Leaders of major South Korean conglomerates including Hyundai Motor and SK officially launched the Korea H2 Business Summit on Wednesday to coordinate their efforts in bringing forth a hydrogen society. +VE
The number of subscribers of SK Telecom’s new subscription-based e-commerce platform T Universe has exceeded 150,000 after its launch last week, SK Telecom said Wednesday.
China’s crackdown on “fan culture” is aimed at maintaining public order and will not affect its relations with any country, the Chinese embassy in South Korea said on Wednesday. The government has launched a multi-pronged crackdown on a broad range of sectors including the entertainment industry and what authorities describe as a “chaotic” celebrity fan culture, and its influence on young people and social order.

TAIWAN 
Expect market to open lower following weakness in the US overnight. Light volumes continue as investors look for clarity. Yesterdays selling attributed to rumours of a covid spike in cases, CECC only reported 7 cases so may see some bargain hunting after the open.
No data due
The New Taipei City Government yesterday reinstated bans on dine-in services for all eateries across the municipality, effective today, as well as closing sports facilities due to a cluster of infections reported at a preschool in Banciao Distric.
An official at Japan’s governing Liberal Democratic Party (LDP) yesterday urged Taiwan, Japan and the US to establish a mechanism for defense cooperation, as China might increase pressure on Taipei from next year to 2027. +VE
Despite the latest cluster of COVID-19 infections in New Taipei City, Minister of Economic Affairs Wang Mei-hua yesterday said that the government is not going to delay the rollout of the Quintuple Stimulus Vouchers, scheduled for early next month. +VE
Quang Viet Enterprise Co yesterday reported that its revenue last month declined 16.42 percent month-on-month to NT$1.44 billion (US$51.9 million), beating most analysts’ estimates of about a 50 percent slump due to COVID-19 lockdowns in Vietnam. Production at factories in China and Jordan helped compensate for disruptions at its Vietnamese factories, Quang Viet said. Slight +VE
AU Optronics Corp yesterday reported NT$32.71 billion in revenue last month, down 1.9 percent from NT$33.35 billion in July due to price declines. The Hsinchu-based flat-panel maker’s shipments decreased 3.6 percent sequentially to 2.71 million square meters. Last month’s revenue marked the best figure for August in about seven years. In the first eight months of the year, cumulative revenue surged 48.9 percent to NT$244.65 billion, compared with NT$164.34 billion in the same period last year. -VE
Taiwan’s top 50 corporations could see their profitability improve in the next 12 months, backed by continued robust demand for electronics goods in which local firms have a competitive advantage globally, Taiwan Ratings Corp said in a report released on Tuesday. +VE
Taiwan remained the third-largest semiconductor equipment spender in the second quarter of this year, global semiconductor trade association SEMI said yesterday. Data released by SEMI showed that Taiwan purchased US$5.04 billion of equipment for semiconductor production in the second quarter, down 12 percent from a quarter earlier. The first half of the year is usually the slow season for Taiwanese semiconductor suppliers to expand production and the sequential decline in the second quarter was no surprise, analysts said. +VE
 

CHINA
Expect market to open lower with China futures weak and the Dragon Index dropping in US trading as Top Ecommerce executives called into see the regulator. Expect caution ahead of Inflation and PPI data on the open
Data due on the open
Inflation Aug vs 1% YoY Jul (F/cast was 1%)
Inflation Aug vs +0.3% MoM Jul (F/cast was +0.4%)
PPI Aug vs +9% YoY Jul (F/cast was 9.1%)
Potential to get New Loans data at anytime
China’s government on Wednesday summoned gaming firms including Tencent Holdings Ltd and NetEase Inc to ensure they implement new rules for the sector. It also said it would crack down on illegal behaviour in the ride-hailing industry. Follows Beijing moved to ban under-18s from playing video games for more than three hours a week in a tighter set of regulations for gaming here as it looks to strengthen control over sectors of its economy; such as tech, education and property -VE.
The People's Bank of China published the 2020 China Inclusive Financial Indicators Analysis Report. The proportion of adults using electronic payments was 89.16% last year, rising 3.79 ppts from the same period of 2019 according to survey. Of which, the proportion of adult e-payment users in rural areas climbed 6.51 ppts YoY to 82.72%. +VE
China's foreign minister Wang Yi said the United States and its allies have more of a duty to supply economic and humanitarian aid to Afghanistan than any other country, according to a statement from the foreign ministry on Wednesday.
Britain’s Alok Sharma, president of this year’s United Nations COP26 climate change conference, said on Wednesday he had held constructive discussions with China in recent days ahead of the summit in November +VE.

HONG KONG
ADR’s -177pts at 26,143 with weakness in Chinese Financials and Ecommerce names.    
No data due
EARNINGS
SHKP (16 HK)
EX Div Sinopec (386 HK), CR Cement (1313 HK), Dah Sing (440 HK), First Pac(142 HK), R&F (2777 HK), LK Tech (558 HK) , Petrochina (857 HK).

SHORT SELLING Wednesday 21.7% vs 17.5% Tuesday
Top shorts  
CM Bank (3968) 44%, Bank of China (3988) 43%, Wharf REIC (1997) 36%, ICBC (1398) 36%, MTRC (66) 32%, Henderson Land (12) 32%, CCB (939) 32%, Power Assets (6) 31%,  AIA (1299) 29%, HKEX (388) 29%, CK Assets (1113) 29%, WH Group (288) 28%, Country Garden (2007) 28%, Sunny Optical (2382) 26%, Shenzhou (2313) 26%, Sands China (1928) 26%, Mengniu Dairy (2319) 25%, China Life (2628) 25%, Tencent (700) 24% 

WATCH
EVERGRANDE (03333.HK) has informed two banks of its plan to pause loan interest payments due on 21 September,
REDD citing four insiders. Evergrande's US dollar bonds plummeted following the news -VE.

GREATWALL MOTOR (02333.HK) 0.000 (0.000%) Short selling $120.64M; Ratio 16.344% announced the August operating figures. The sales volume for the month amounted to 74,200 units, down nearly 17% compared to the corresponding period of the previous year. The production volume likewise dropped 16.9% YoY to 73,100 units -VE

POWERLONG (01238.HK) 0.000 (0.000%) Short selling $5.27M; Ratio 34.683% announced that the contracted sales value and contracted sales area of the Group in August 2021 amounted to approximately RMB8.496 billion and 512,400 square meters, respectively. The contracted sales value increased by 17.95% yearly +VE.

LENOVO GROUP (00992.HK) 's R&D investment will double up in the next three years, said Chairman cum CEO Yang Yuanqing at Lenovo Tech World. Mixed working and life styles will propel R&D on various equipment, IoT and online services, Yang furthered. Meanwhile, development of cloud computing and data centers will also boost construction of high-end infrastructure, and the core position and prospects of AI in the intelligent transformation. +VE

LOGAN GROUP (03380.HK) 0.000 (0.000%) Short selling $4.35M; Ratio 9.824% announced that the contract sales was approximately RMB10.85 billion in August 2021, down 16.67% YoY. The gross floor area of contract sales was approximately 737,000 sq.m..

NEW WORLD DEV (00017.HK) announced that its subsidiary K11 Shanghai Properties Company Limited and the company's substantial shareholder CTF (Holding)'s Chow Tai Fook Nominee Limited entered into an agreement to acquire remaining 50% interest in Shanghai New World Huai Hai Property Development Co., Ltd. at RMB3.375 billion.
The Target Company is principally engaged in the development, management and operation of Shanghai Hong Kong New World Tower located at 300 Huaihaizhong Road, Huangpu District, Shanghai, the PRC Slight +VE.

HAITONG SEC (06837.HK) (600837.SH) announced that it had yesterday (7th) signed and received the "Case Initiation Notice" and "Investigation Notice" from China Securities Regulatory Commission (CSRC).
The case was initiated because the company had not exercised due diligence in the continuous supervision work of financial advisory business of Southwest Pharmaceutical (currently Aurora Opto Electronics). As the company was involved in law violation, the CSRC decided to file a case on the company and initiate an investigation. -VE

CATHAY PAC AIR (00293.HK) +0.210 (+3.196%) Short selling $1.96M; Ratio 12.592% provided its staff with enough information about vaccination over the past six months, local media citing an internal memo from General Manager Inflight Service Delivery. With the deadline already passed, the airline decided to sack today (8th) a few unvaccinated aircrew members failing to provide any medical proof.

Tesla (TSLA.US) +19.350 (+2.638%) sold 44,264 China-made electric vehicles in August,
 an increment of 34% from 32,968 in July, as shown by the data of China Passenger Car Association (CPCA).

POLY PROPERTY (00119.HK) -0.030 (-1.422%) Short selling $180.60K; Ratio 3.962% announced that, for the eight months ended 31 August 2021, the group has recorded contracted sales of approximately equivalent to RMB36.4 billion, up 27.27% YoY, with contracted area sold totaling approximately 2.118 million square metres.

In August 2021, China's retail sales of passenger vehicles reached 1.453 million units, marking a year-on-year decrease of 14.7%, 
and a decrease of 7% compared to August 2019, with meager growth rate, as shown by the data of China Passenger Car Association (CPCA).