China/HK Equities Higher On PBoC Policy Pledge

Regional equities are mixed in the first part of Wednesday Asia Pac trade. There have been pockets of strength, most notably in HK and China markets. Losses elsewhere haven't been as large as implied by US weakness in Tuesday trade. US equity futures are a touch higher at this stage. Eminis near 4323, +0.18%, while Nasdaq futures are up by close to the same amount. Eminis are only a touch above fresh lows going back to mid June.

• In the cross-asset space, US nominal yields are touch lower, which is potentially aiding US equity futures, but overall moves are modest. USD dips are being supported though.
• HK and China equities enjoyed early positive momentum, but we sit off session highs for major indices. At the break the HSI is +0.64%, the CSI 300 +0.31%.
• Early positive momentum reflected PBoC headlines, where the central bank stated it will use 'precise, forceful policy' to boost the recovery. August profit data also showed some improvement, with profits up 17.2% y/y (prior -6.7%), although base effects played a role.
• Real estate jitters persist, following reports that the Evergrande Chair was under police watch. The CSI 300 real estate sub index is down slightly in the first part of trade.
• Japan markets are down modestly, the Nikkei 225 off 0.35%. The Taiex is off 0.12%, despite a sharp dip in the SOX during US Tuesday trade. The Kospi is down further, off 0.30%. Local news wire Yonhap reported that key chipmakers (including Samsung) may get an indefinite waiver over chip export controls to China.
• In SEA, Indonesian and Philippine stocks are higher, while modest losses are evident elsewhere.