Equity markets trade generally lower
|Asia Market Update: Equity markets trade generally lower; Financial press said recent CB decisions were hawkish; China's Annual Economic Work Conference in focus [Dec 15-16th].
General trend
- Uncertainty seen regarding the next moves of central banks?.
- AU, JP and NZ released weaker Manufacturing PMIs.
- Chinese tech shares fluctuate amid Nasdaq decline and multiple headlines.
- US PCAOB secures complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong [Dec 15th].
- Biden Administration confirmed to add 36 Chinese companies to so called entity list – press [Dec 15th].
- China reportedly prepares to wrap up regulatory uncertainties around tech, education sectors – press [Dec 15th].
- Nikkei 225 lags [How will the index be impacted by Fast Retailing’s (largest component) stock split?].
- Australian iron ore miners pare gains [CMRG (China state iron ore firm) to begin making iron ore purchases from miners in 2023, plans to seek discounts from miners – US financial press].
Headlines/economic data
Australia/New Zealand
- ASX 200 opened -0.2%.
- (NZ) New Zealand Nov Non-Resident Bond Holdings: 59.7% v 58.4% prior.
- (AU) AUSTRALIA DEC PRELIMINARY PMI MANUFACTURING: 50.4 V 51.3 PRIOR (32nd month of expansion).
- (NZ) New Zealand Nov Manufacturing PMI: 47.4 v 49.1 prior (2nd consecutive contraction).
Japan
- Nikkei 225 opened -1.2%.
- (JP) Japan Chief Cabinet Sec Matsuno: PM Kishida has ordered to strengthen the coast guard.
- (JP) Japan Draft: Will implement defense taxation at appropriate time, with a 4.0-4.5% surchage (in line).
- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].
- (JP) Former Japan Finance Ministry official Nakaso [seen as possible Kuroda replacement] commented on the BOJ in a book that was published in May, talked about how the central bank could seek to exit from easy monetary policy - financial press.
- (JP) JAPAN DEC PRELIMINARY PMI MANUFACTURING: 48.8 V 49.0 PRIOR [2nd straight contraction and lowest since Oct 2020].
Korea
- Kospi opened -1.3%.
- (KR) South Korea said to seek an increase in electricity and gas prices in 2023 - Press.
China/Hong Kong
- Hang Seng opened -0.1%; Shanghai Composite opened -0.4%.
- (CN) China state Planner (NDRC): Economy is facing more complex and grim external environments; Long term positive trend hasn't changed.
- (CN) China Ministry of Finance (MOF) sells 3-month bills and 50-year bonds.
- (CN) US Consulates in China cut services amid COVID; US embassy in Beijing has reduced services - SCMP.
- (CN) CMRG [China state iron ore firm] to begin making iron ore purchases from miners in 2023, plans to seek discounts from miners – US financial press.
- (CN) China National Health Commission (NHC) To step up coronavirus controls in Rural areas; To strengthen reserves of essential drugs and test kits in rural areas.
- (CN) China PBOC Open Market Operation (OMO): Sells CNY41B in 7-day reverse repos v CNY2.0B prior; Net inject CNY39 B v net CNY0B prior.
- (CN) China PBOC sets Yuan reference rate: 6.9791 v 6.9343 prior.
- (CN) Rising probability of China PBOC 5-year loan prime rate (LPR) cut seen [in line], cites analysts – Chinese press.
- (CN) Said that China is anxious to fully reopen border with Hong Kong completely in Jan 2023 - SCMP.
- (CN) China Securities regulator CSRC: Welcomes US PCAOB decision on auditing, will continue supervision work on auditing in the future.
Other
- (IN) Said that India has cut the windfall tax on Crude oil, Diesel, and Jet Fuel.
- (SG) SINGAPORE NOV NON-OIL DOMESTIC EXPORTS M/M: -9.2% V -3.0%E; Y/Y: -14.9% V -7.4%E.
North America
- (US) Senate has votes to pass 1-week funding bill.
- (US) Senate has enough votes to pass the $858B Defense authorization bill.
- (US) China Ambassador to the US Qin and Treasury Sec Yellen agreed to increase coordination on trade and policies.
- (US) Said that the US Senate has rejected Senator Manchin (D-WV) Energy Permitting plan - Financial Press.
- (US) California Public Utilities Commission has voted to cut solar rooftop incentives; Changes net metering policies.
Europe
- (UK) Labor Party has retained the parliament seat in Stretford and Urmston special election.
- (UK) Dec GfK Consumer Confidence: -42 v -43e.
- (EU) France President Macron expects EU Energy Policy finalized during Monday Meeting (Dec 19th); US climate law likely not compatible with WTO rules.
- (EU) Germany Chancellor Scholz: Confident in a gas price cap deal on Monday Dec 19th; Stressing need to intensify talks to US about IRA (Inflation Reduction Act).
Levels as of 00:20 ET
- Nikkei 225, -2%, ASX 200 -0.8% , Hang Seng flat; Shanghai Composite -0.3% ; Kospi -0.5%.
- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 +0.3%.
- EUR 1.0662-1.0619 ; JPY 137.90-136.95 ; AUD 0.6735-0.6694 ;NZD 0.6408-0.6332.
- Gold flat at $1,788/oz; Crude Oil -0.4% at $75.77/brl; Copper +0.1% at $3.7797/lb.
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