Asia Daily Update

North Asia
** China: Govt to lower financing costs using “targeted measures”
** Hong Kong: Student protest leaders said they may withdraw from the formal talks

CHINA: Premier Li said at the State Council meeting yesterday that the government will use “targeted measures” to lower financing costs and support economic growth, without further elaborating. He said that the growth is in a reasonable range despite the large domestic and global downward pressures. The government will start some key projects in water conservation, environmental protection and information technology this year. The government will also study new policies to boost competitiveness in the exports sector.

HONG KONG: Student protester leaders said yesterday that they may consider withdrawing from the formal talks if the government continues to ignore their demands. The protesters demand a democratic electoral system including and open nomination in 2017 election and the resignation of Chief Executive Leung. Earlier this week, they agreed to start formal talks on 10 October with the agenda on how to change the electoral system within the framework of the Basic Law. As of yesterday, the number of protesters have scaled down to a few hundreds in three main protest sites in the central area.

South Korean markets are closed today for Hangul Day.

South/Southeast Asia
** India: USD-INR in a tight range ahead of key releases tomorrow
** Singapore: USD-SGD slips to low 1.2700 area but SGD NEER holds steady at -1.9% vs mid-point

INDIA: There’s nothing on the data front today. We’ll get August industrial production and September trade numbers tomorrow. For USD-INR, it held within a tight range of 61.30-61.55 yesterday and is likely to do so near term, with the 61-62 range seen.

SINGAPORE: The main releases will be next week where we’ll get 1) advance Q3 GDP on 14-October, seen just slightly higher at 2.7% y/y from 2.4% in Q2; 2) August retail sales on 15-October; and 3) September non-oil domestic exports (NODX) on 17-October where a modest is seen at 2.5% y/y from 6% previously. The electronics sector however is likely to contract further.

USD-SGD fell sharply overnight after the Fed minutes, from the 1.2800 level to 1.2730. It is slightly lower in early trading to 1.2720. For the SGD NEER however, we estimate it is holding steady at -1.9% vs the mid-point for USD-SGD at 1.2720, USD-MYR at 3.2470, and USD-CNY at 6.1390.