Key News

Asian equities were mostly lower overnight except for Japan and India.

China released positive credit data for August yesterday that came in well above July’s levels. This is an indication that the cuts to mortgage rates and other interest rates are having a positive impact on the economy. This was confirmed by China’s August inflation reading as well.

Nonetheless, real estate was lower in both Hong Kong and Mainland China overnight on concerns that the positive impact of rate cuts could be beginning to slow. However, Country Garden’s stock price rose by +3.9% after certain bonds received approval to have their coupon payment deadlines extended. Meanwhile, certain areas continue to plow ahead with relaxing restrictions and encouraging purchases.

Shenzhen has plans to open sections of its highway network to autonomous vehicle trials. The technology center will be the latest among many Chinese cities that have opened their roads to commercial robo-taxis and other electric vehicle trials. Meanwhile, BYD and the electric vehicle ecosystem were higher overnight on more positive sales releases.

Hong Kong-listed internet stocks saw some weakness overnight though we are seeing a bounce in US trading this morning. The surprise role change for Alibaba’s former CEO Zhang may have caused some short-term volatility in the stock price.

The Hang Seng and Hang Seng Tech indexes both closed lower by -0.39% and -0.47%, respectively, on volume that decreased -32% from yesterday. Mainland investors bought a net $858 million worth of Hong Kong stocks overnight via Southbound Stock Connect. The top-performing sectors were Information Technology, which gained +0.30%, Real Estate, which fell -0.22%, and Utilities, which fell -0.36%. meanwhile, the worst-performing sectors were Energy, which fell -3.14%, Materials, which fell -1.54%, and Industrials, which fell -1.73%.

Shanghai, Shenzhen, and the STAR Board all closed lower by -0.18%, -0.08%, and -0.65%, respectively, on volume that decreased -15% from yesterday. Foreign investors sold a net -$252 million worth of Mainland stocks overnight via Northbound Stock Connect. The top-performing sectors were Consumer Discretionary, which gained +0.65%, Utilities, which gained +0.54%, and Consumer Staples, which fell -0.80%. Meanwhile, the worst performing sectors were Communication Services, which fell -1.18%, Real Estate, which fell -0.77%, and Financials, which fell -0.68%.

Last Night’s Performance

Last Night’s Exchange Rates, Prices, & Yields

• CNY per USD 7.29 versus 7.29 yesterday
• CNY per EUR 7.81 versus 7.83 yesterday
• Yield on 1-Day Government Bond 1.45% versus 1.45% yesterday
• Yield on 10-Year Government Bond 2.62% versus 2.63% yesterday
• Yield on 10-Year China Development Bank Bond 2.75% versus 2.75% yesterday
• Copper Price -0.23% overnight
• Steel Price +0.29% overnight