Asian Macro Initial Thoughts Muted open as markets watch US jobs data

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Asia expect volumes to remain light ahead of the US jobs data on Friday and the long weekend in the US.

The World Health Organization (WHO) is monitoring a COVID-19 variant known as "Mu" first emerging in Colombia in January 2021. Known scientifically as B.1.621, "Mu" has been classified as a "variant of interest".

Australia Futures indicate market to opens -17pts, key will be Iron Ore process and BNP going Ex Div. Oil weak overnight and Gold soft too. Key data out after the open. Lock down in Melbourne in extended for a further two weeks -VE for sentiment.
Data Balance of Trade, Exports, Imports, Home Loans
Japan Nikkei futures opened -35pts, Chicago Futures +20pts. Expect a muted open. Tech to see continued interest but Retail sales remain weak. JR West share sale a -VE. Pharma weak as drug trails -VE.
S Korea Expect markets to open flat; good GDP data but the Inflation data was also stronger justifying the BoK’s rate hike last week. Autos weak on poor sales data and Samsung Foldable plays may take a breather as costs may crimp some of the upside. Kakao Bank saw a $930m block went through.  
Taiwan Market to open higher following the continued interest in Tech in the US.
China Market to open lower with caution over Govt policy and looking for signs of more support for the economy
HK ADR’s indicate +50pts at 26,078 with Financials mixed and ECommerce +VE Upside limited ahead of US jobs data.    
US Futures 
Opened Dow flat,S&P +0.03% and NDX +0.04%

DOW -0.14%, NDX +0.33%, S&P +0.03%, Russel 2K +0.58%
Markets opened mixed after a disappointing ADP number; Dow flat but traded sideways in the red. S&P opened higher and traded sideways around flat in the green. NDX opened higher and worked better to a new all time hihg but dipped into the close as did Apple. Zoom rebounded on news Cathy Woods had bought on its dip yesterday. Increasing concerns that markets are due for a correction. Expect some lighter flows ahead of the US jobs data and the long weekend ahead.
Banks JPMorgan Chase -0.1%, Citigroup +0.8% Wells Fargo -4.9%, Amex -0.9%
Work from home names: Facebook +0.7%, Apple +0.5%, Amazon +0.2%, Netflix +2.3%,  Disney +1.2%, Zoom Video +0.5%, Alphabet +0.4% and Microsoft flat
Tech NXP Semi -1.7%, Nvidia +0.3%, Micron flat, AMD -0.7%, Skyworks -1%
Re-opening stocks  Boeing -0.6%, Caterpillar -1.4%, Simon Property +1%, Kohl’s -0.1%, Nordstrom -0.7%, Gap -1%, United Airlines -0.7%, Carnival -2.6%, Wynn Resorts -0.7%, Chevron -1.1%, Exxon Mobil -1.4%,  
Lock down names Campbell Soup +2.1% General Mills -0.2%, JM Smucker -1.1%
DATA
MBA Mortgage Applications -2.4% vs +1.6%
MBA 30 year Mortgage Rate 3.03% vs 3.03% prior
ADP Employment Change Aug 374k vs 326k Jul revised (F/cast was 500k)
Manufacturing PMI Aug 61.1 vs 63.4 Jul (F/cast was 61.2)
Construction Spending Jul +0.3% MoM vs 0% Jun revised (F/cast was +0.3%0
ISM Manufacturing Data
PMI Aug 59.9 vs 59.5 Jun (F/cast was 59)
Employment Aug 49 vs 52.9 Jun (F/cast was 52.3)
New Orders Aug 66.7 vs 64.9 Jun (F/cast was 64)
Prices Aug 79.4 vs 85.7 Jun (F/cast was 85)
EIA Gasoline Stocks Change +1.29m vs -2.242m prior (consensus -1.633m)
EIA Crude Oil Stocks Change -7.169m vs -2.979m prior (consensus -3.088m)
After Market @ 8am HK time Total Vehicle Sales Aug vs 14.8m Jul
USD was soft vs Yen & Euro. Bitcoin +2.4% @ 48,447.03,  VIX -2.3% @ 16.11,  US T10 @ 1.299% on disappointing jobs data
OIL Brent -0.39%, WTI -0.41%  Firm as OPEC+ agreed to stick to their current schedule for increases.
Gold -0.1%, Silver +0.8%, Copper -2.2% Platinum -1.5%, Palladium -1.4%.
AHEAD Challenger Job Cuts, Balance of Trade, Unit Labour Costs, Non Farm Productivity, Initial Jobless Claims Jobless Claims 4 week Ave, Continuing Claims, Exports, Imports, Factory Orders, EIA Natural Gas Stocks, LMI Logistics Managers Index.

DAX -0.07%, CAC +1.18%, FTSE +0.42%
Markets opened higher; FTSE traded sideways in the green along with the CAC. DAX opened higher but trended lower, hit flat at midday bounced but then sold down into the red. PMI data missed F/cast but was was robust, Eurozone Unemployment in line but German Retail Sales were weak.  Concerns over the slowdown in China also in play along with some concern about Friday’s US jobs report and tonights ADP data which was weaker than F/cast.
Retail lead the gainers, Travel & Leisure rebounded but Resources were weak.
SAS +2.4% after posting for Q3 a net loss of 1.36 billion Swedish krone ($160 million) as travel restrictions continued to cause headwinds for air travel.
Pernod Ricard +3.8% after beating the full-year 2020/21 operating profit expectations and announced the restart of a 500 million euro ($590 million) share buyback program.
Just Eat Takeaway.com and Deliveroo both rising over 6%.
Carrefour -5.5% after LVMH Chairman and CEO Bernard Arnault sold his 5.7% stake in the French retailer.
WH Smith  -3.8% after forecasting that profits for the year ending August 2022 toward the lower end of market expectations.
The United Kingdom will hold its first meeting with members of the Trans-Pacific Partnership free trade pact later this month to discuss London's application to join the deal, the Japanese government said Wednesday +VE.
Data
Eurozone
Manufacturing PMI Aug 61.4 vs 62.8 Jul (F/cast was 61.5)
Unemployment Rate Jul 7.6% vs 7.8% Jun revised (F/cast was 7.6%)  Germany
Retail Sales Jul -5.1% MoM vs +4.5% Jun revised (F/cast was -1.2%)
Retail Sales Jul -0.3% YoY vs +6.5% Jun revised (F/cast was +5.5%)
Manufacturing PMI  Aug 62.6 vs 65.9 Jul (F/cast was 62.7)
France 
Manufacturing PMI Aug 57.5 vs 58 Jul (F/cast was 57.3)New Car Registrations Jul -35.3% vs -14.7% Jun (F/cast was +2.5%)
UK  
Nationwide Housing Prices Aug +11% YoY vs 10.5% Jul (F/cast was +8.9%)
Nationwide Housing Prices Aug +2.1% MoM vs +0.6% Jul revised (F/cast was +0.3%)
Manufacturing PMI Aug 60.3 vs 60.4 Jul (F/cast was 60.1)
AHEAD
Eurozone PPI
Germany  No data due 
France New Car Registrations
UK  No data due 

JAPAN 
Nikkei futures opened -35pts, Chicago Futures +20pts. Expect a muted open. Tech to see continued interest but Retail sales remain weak. JR West share sale a -VE. Pharma weak as drug trails -VE.
Yen currently 110.1
Data due Foreign Stock and Bond Investment 
Tokyo reported 3,168 new covid cases (+259 DoD) with the nationwide tally at 20,031.
Govt considering extending the state of emergency by another 2 weeks -VE for sentiment .
BoJ Deputy Gov hints that a possible economic downgrade -VE
Moderna said its Japanese distribution partner Takeda Pharmaceutical planned to initiate the recall of three lots of the U.S. drugmaker’s COVID-19 vaccine that were suspended as Japan reported the fourth contamination case in less than a week.
PM Suga told reporters on Wednesday that he had no plans to dissolve the country’s lower house,
in the latest turn of political drama as he fights to hold onto his job.
JR West to sell $2.5bn of shares to finance capex -VE as high dilution.

SOUTH KOREA 
Expect markets to open flat; good GDP data but the Inflation data was also stronger justifying the BoK’s rate hike last week. Autos weak on poor sales data and Samsung Foldable plays may take a breather as costs may crimp some of the upside. Kakao Bank saw a $930m block went through.  
Data out
GDP Growth Rate Q2 +6% YoY vs +1.9% Q1 (F/cast was +5.9%)
GDP Growth Rate Q2 +0.8% QoQ vs +1.7% Q1 (F/cast was +0.7%)
Inflation Rate Aug +2.6% YoY vs +2.6% Jul (F/cast was +2.3%)
Inflation Rate Aug +0.6% MoM vs +0.2% Jul (F/cast was +0.2%)
KDCA reported Wednesday morning 2,025 new covid cases (+538 DoD) -VE
Government officials were in last-ditch efforts on Wednesday to stave off a strike by health workers who say they are exhausted from battling waves of COVID-19 outbreaks and need more personnel and better work conditions. -VE
South Korean carmakers' sales fell 4.5 percent last month from a year earlier as an extended global chip shortage and the COVID-19 pandemic continued to weigh on vehicle production and sales, industry data showed Wednesday. -VE But Renault Samsung Motors Corp. said Wednesday its sales rose 17 percent last month from a year earlier on strong exports of its SUV models but domestic sales fell.
SK E&S, a natural gas provider under SK Group, said Wednesday that renewables and batteries have limits in fighting climate change and suggested carbon-neutral liquefied natural gas and blue hydrogen as answers.
SK Innovation Co Ltd (096770.KS) said on Wednesday it will invest 1.2 trillion won ($1.04 billion) in a new battery factory in China. The investment comes as global automakers shift to electric vehicles (EV) to comply with environmental regulations, leading to increasing demand for EV batteries. +VE

TAIWAN 
Expect market to open higher following the continued interest in Tech in the US.
No data due
Wednesday’s PMI @ 62.1 last month, the slowest growth this year, but well above the expansion mark, as all sectors reported that business picked up, the Chung-Hua Institution for Economic Research (CIER) said yesterday. The latest PMI reading, although 3.1 points lower than July, reflected robust purchasing activity ahead of the peak season for technology products. +VE
With the help of the Quintuple Stimulus Voucher program, Taiwan might have a chance to achieve 6 percent GDP growth this year, National Development Council (NDC) Minister Kung Ming-hsin said yesterday, as he is betting on the vouchers to provide a “quick boost” to the economy. +VE
Taiwan’s minimum wage “should go up,” but it would present a predicament for the government balancing a booming export sector and anemic domestic demand, Minister of Economic Affairs Wang Mei-hua said on a Z Media show yesterday. Coordinating measures would need to go hand-in-hand with an increase in the minimum wage to ensure businesses that are not sharing in Taiwan’s booming export-driven economy are not excessively battered, Wang said. Slight +VE
The Central Epidemic Command Center (CECC) yesterday confirmed that the first shipment of the Pfizer-BioNTech COVID-19 vaccine to Taiwan is to arrive early this morning. It also announced that AstraZeneca vaccinations for people aged 23 to 28 would be extended by two days.
US Senator Marco Rubio has expressed support for Lithuania’s decision to open reciprocal representative offices with Taiwan and allow the office in Vilnius to bear the name “Taiwan,” despite protests lodged by China.
New vehicle sales fell 12.9 percent to 33,148 units last month from 38,064 units in July, beating an average monthly decline of between 20 and 30 percent during Ghost Month, online market researcher U-Car.com said yesterday.  +VE
Win Semiconductors Corp (Win Semi), the world’s largest pure-play gallium arsenide foundry, yesterday said that it plans to spend NT$2.12 billion (US$76.42 million) to increase its stake in Iteq Corp, aiming to expand the two firms’ partnerships to 5G infrastructure and autonomous vehicles. +VE
Apple Inc’s upcoming smartwatch is experiencing production snags as manufacturers adjust to a new design, likely leading to supply constraints or shipment delays, a person familiar with the situation said.
The device is expected to have a larger screen and a faster processor, Bloomberg has reported. Slight -VE for the suply chain names.


CHINA
Expect market to open lower with caution over Govt policy and looking for signs of more support for the economy
No data due
Xinhua News Agency mentioned about the social issue of video game indulgence among some minors in an article titled "Preventing Online Game Indulgence Is A Big Issue". Equally, the state media called for strict government management and the industry's fulfillment of their subject liabilities by fully installing anti-indulgence systems and launching real-name verification in a stringent manner.
The Chinese government has said the cost of renting a home in cities should not rise by more than 5% a year - its first move to cap rental prices and part of efforts to provide more affordable housing. President Xi Jinping's pledges to narrow wealth disparities with the goal of achieving so called "common prosperity" has put the plight of low income households and individuals at the forefront of policymaking Slight -VE for landlords and developers.
State-backed firms are set to take a sizeable stake in a key Ant Group asset for the first time, three people told Reuters, in a move that will loosen the Chinese fintech giant's grip on a data treasure trove of over 1 billion users but help revive its IPO. Under the plan, Ant and Zhejiang Tourism Investment Group Co Ltd (ZJGVTT.UL) will each own 35% of the venture, while other state-backed partners, Hangzhou Finance and Investment Group and Zhejiang Electronic Port, will each hold slightly more than 5%, said one of the people. The only non-state investor will be Transfar Group, parent of logistics and financial services firm Transfar Zhilian Co Ltd (002010.SZ), said the people with knowledge of the matter, who declined to be identified as the information was private.
Transfar's stake will total 7%, said one of the people. Sligth +VE for Ant
China calls for a Stop to arms sales to ‘non-state actors’, at the UN a rebuke of US arms sales to Taiwan. The Chinese envoy for disarmament affairs calls out a country that ‘abuses the arms trade as a political tool’, in apparent reference to US weapons sales to Taiwan/ There is also caution on illicit arms transfers as the Taliban take control of US weapons in Afghanistan, deepening worries in China about militant spillovers in China’s Xinjiang -VE unlikely to have much impact as Taiwan is a country regardless of what China claims.

HONG KONG  
ADR’s +50pts at 26,078 with Financials mixed and ECommerce +VE    
No data due

National Security
Denise Ho’s has her concert cancelled on public security grounds.

SHORT SELLING Wednesday 15% vs 17.3% Tuesday
Top shorts  
WM Group (288) 49%, Bank Comm (3328) 48%, New World Dev (17) 45%, CK Asset (1113) 44%, MTRC (66) 41%, AIA (1299) 39%, Bank of China (3988) 37%, HSBC (5) 36%, CLP (2) 36%, Haidilao (6862) 36%, Country Garden (2007) 33%, Geely (175) 33%, Hengan (1044) 30%, BYD (1211) 30%, Hang Seng Bank (11) 30%, Power Assets (6) 30%, Hang Lung Ppty (101) 29%, Henderson Land (12) 29%, CCB (939) 28%, Ali Health (241) 27%, Techtronics (669) 27%, HKEX (388) 26%, CKH (1) 26%, Galaxy (27) 26%, ICBC (1398) 25%.

WATCH
Brilliance China BMW is interested in buying out its Joint Venture partner but there are said to be 8 other parties also interested.

XPENG-W (09868.HK) (XPEV.US) announced that the company delivered 7,214 smart electric vehicles (Smart EVs) in August,
representing a 172% increase year-over-year.

SMARTONE TELE (00315.HK)'s announced full-year result ended June 2021. The revenue declined 3.8% year on year to HK$6.72 billion. The net profit amounted to HK$445 million, up 17.3% year on year. EPS was HK39.9 cents. A final dividend of HK15.5 cents was declared, bringing the full-year dividend to HK30 cents per share. Deputy chairman Allen Fung expressed during a virtual result announcement conference that the company's 5G clients now account for more than 15% but less than 20% of the total client base, voicing the company's hope to further expand the ratio. Stephen Chau, chief technology officer of the company, remarked that when customers upgrade from 4G to 5G, the ARPU will increase by around $50-100.

PING AN (02318.HK) (601318.SH) announced that it has repurchase 11.3538 million A-shares of the company on the Shanghai Stock Exchange Wednesday, at a price ranging between RMB49.8-51.38, involving nearly RMB578 million.

R&F PROPERTIES (02777.HK) +0.140 (+2.108%) Short selling $22.00M; Ratio 24.877% announced that the total contracted sales for the month of August amounted to approximately RMB9.36 billion, down 13.81% YoY.

MODERN LAND (01107.HK) 0.000 (0.000%) announced that the company's contracted sales for August 2021 amounted to approximately RMB4.211 billion, up 1.58% YoY.

NIO Inc. (NIO) announced that its vehicle delivery in August hiked 48.3% YoY to 5,880 units.

LI AUTO-W (02015.HK) (LI.US) announced that total deliveries in the first eight months of 2021 and cumulative deliveries of Li ONEs reached 48,176 and 81,773 respectively.

Tencent the FT reports has increased its invstment in overseas start-ups as part of its global expansion; with 16 deals in Europe as part of its 34 globally in the first 6 months of 2021


Didi had announced the formation of a labor union last week at an internal forum, yet without specifications, Bloomberg cited sources. The Chinese ride-hailing giant may invite drivers to join the union, according to hearsay. These drivers are mostly part-timers entitled to incomplete labor welfare. Industry fellow like MEITUAN-W (03690.HK) is also studying the feasibility of an internal labor right association, another sources said. The report also cited three people with the knowledge of the matter that BABA-SW (09988.HK)'s staffers have posted on the company's forum calling for the same labor union. 

TENCENT (00700.HK)'s Tencent Video published a statement on optimizing the "paid advanced viewing" services, vowing to amend the video unlocking rules soon 
and enable users to unlock dramas episode by episode. This will not only protect consumers' rights, but also allow users to enjoy a more personalized binge-watching experience.