China’s trade balance may be released over the weekend
|Asia Market Update: Equity indices mostly rise amid trade-related comments from Trump and Mnuchin; Upcoming US jobs report in focus; China’s trade balance may be released over the weekend
General Trend:
- Japan’s largest bank (MUFJ) said to consider placing fees on certain accounts amid the negative interest rate environment (Nikkei)
- Japanese steelmakers supported by analyst comments; Eisai rises over 7% on Alzheimer’s data
- South Korea Kospi outperforms after declines on Thursday, chipmakers rise
- Gainers in Hong Kong include tech and gaming companies
- Shanghai Composite lags in early trading, decliners include IT and financial companies
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat
- (AU) Australia Nov AIG Performance of Construction Index: 40.0 v 43.9 prior
- (NZ) Reserve Bank of New Zealand (RBNZ) Deputy Gov Bascand: Reiterates economy looks close to turning point; downside risks persist but are more balanced; strong commodity prices are supporting economy; fiscal stimulus could boost growth next year
China/Hong Kong
-Shanghai Composite opened +0.1%, Hang Seng +0.5%
- (US) Pres Trump: Something could happen with regard to tariffs on Dec 15th but we're not discussing that yet; talks are going well; US is having meetings and discussions with China now that are going well
-(US) Treasury Sec Mnuchin: US-China talks are 'on track' but not bound to any specific deadline; US and China deputy officials held a call Thurs night and are 'actively working' towards a deal
- (US) National Security Advisor O'Brien: Close on phase 1 deal with China; spoke with Treas Sec Mnuchin and USTR Lighthizer earlier today; monitoring Hong Kong situation very closely - Fox News Interview
- (US) US and China officials reportedly are still at odds over the value of farm purchases – press
- (CN) CHINA PBOC CONDUCTS CNY300B V CNY200B PRIOR IN 1-YEAR MEDIUM TERM LENDING FACILITY (MLF) OPERATIONS AT 3.25% V 3.25% PRIOR (as speculated)
- (CN) China analysts see possible MLF rate cut after Fri, expected to leave rate on MLF unchanged today - China Sec Journal
- (CN) China PBOC sets Yuan Reference Rate: 7.0383 v 7.0521 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for 13th consecutive session; Net drains CNYB v CNY0B prior
- (CN) China may set 2020 GDP growth target at 'around 6.0%' at Central Economic Work Conference due to take place later during Dec; officials are expected to allow 'modest' expansion of fiscal and monetary policies and continue to resist 'massive' stimulus - SCMP
- (CN) Private companies in China to support the slowed economy, officials to undertake additional targeted measures to lower taxes and financing costs - People's Daily
- (CN) China Agri Min issues 3-year plan to accelerate pig production recovery, reiterates prior target for pig stocks to stop declining and begin to rebound by the end of 2019
- (CN) China National Bureau of Statistics (NBS): 2019 Soybean output +13.3% y/y; Sees 2019 grain output at ~664M tons, +0.9% y/y
- (HK) Hong Kong Financial Sec Chan: Estimates show over 2 pct points of the Q3 GDP contraction was due to social unrest [commenting on data released on Nov 15th]; Doesn't see large short positions on HK$ or stocks
Japan
- Nikkei 225 opened +0.2%
- (JP) Japan Oct Household Spending Y/Y: -5.1% v -3.2%e (fastest fall sine Mar 2016) [Reminder: Japan's sales tax was raised from 8% to 10% on Oct 1st]
- (JP) JAPAN OCT LABOR CASH EARNINGS Y/Y: +0.5% V 0.2%E; REAL CASH EARNINGS Y/Y: +0.1% V -0.2%E
- (JP) Japan Oct Preliminary Leading Index CI: 91.8 v 91.9e; Coincident Index: 91.8 v 97.3e
- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Unchanged
- (JP) Japan Trade Min Kajiyama: Schedule for further US-Japan trade talks hasn't been set yet; Japan gov't plans to phase out inefficient coal power facilities
- (JP) Japan MoF sells ¥3.527T in 3-month bills; avg yield -0.1187% v -0.1783% prior; bid to cover: 2.85x
- (JP) Japan PM Abe will meet with China Pres Xi during his visit to China Dec 23-25 - Japan Press
Korea
- Kospi opened +0.6%
- (KR) Satellite imagery shows activity at missile site in North Korea – CNN
-(KR) South Korea sells KRW320B v KRW300B indicated in 50-year bonds: avg yield 1.54% v 1.50% prior
Other Asia
- Malaysia’s RHB Bank announced it would close operations in Hong Kong, cited the challenging brokerage environment
North America
- (CA) Canada Deputy PM Freeland: Signatories to the USMCA trade deal face 'tough challenge' to get treaty ratified by the US
- (US) House Speaker Pelosi: USMCA issues relate to worker's rights and pharmaceuticals; doesn't think we're headed for a shutdown
Europe
- OPEC delegate repeats that there is agreement for a 500K bpd cut with OPEC+; still need to discuss final details with OPEC+ on Friday - press
Levels as of 00:20 ET
- Nikkei 225, +0.3%, ASX 200 +0.4%, Hang Seng +0.6%; Shanghai Composite +0.1%; Kospi +0.9%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.2%; FTSE100 +0.2%
- EUR 1.1110-1.1101 ; JPY 108.79-108.66 ; AUD 0.6843-0.6830 ;NZD 0.6560-0.6540
- Gold -0.2% at $1,480/oz; Crude Oil -0.3% at $58.23/brl; Copper flat at $2.668/lb
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