Equity markets trade mixed as impact of Omicron remains uncertain
|Asia Market Update: Equity markets trade mixed as impact of Omicron remains uncertain; USD index declines, UST yields rise amid Powell and month-end; Yields later erase rise; AU Q3 GDP due on Wed, US consumer confidence due later today.
General trend
- Asian indices generally pare gains.
- Travel related shares trade generally higher.
- Hang Seng has lagged; China Gas has weighed on utilities; Casino cos. extend drop amid probe related to SunCity.
- China issued 5-year plan related to software and IT services development.
- S&P ASX 200 has been supported by the Financials and Resources indices.
- WTI Crude has remained modestly higher; Precious metals also have modest gains.
- China PMI data had little initial impact, while holding in expansion.
- Markets started to reverse earlier gains after Moderna CEO reiterated comments on skepticism of vaccine on omicron.
- Companies expected to report during the NY morning include Barnes & Noble Education, Bank of Nova Scotia, Baozun, Chico’s, Citi Trends, JinkoSolar, Momo, UP Fintech.
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened +0.5%.
- (AU) Australia Q3 Current Account Balance (A$): 23.9B v 29.3Be; Govt consumption to add 0.8% to GDP, Govt investment to cut 0.1% from GDP.
- (AU) AUSTRALIA OCT BUILDING APPROVALS M/M: -12.9% V -1.5%E; Private Sector Houses Approvals M/M: +4.3% v -16.0% prior.
- (NZ) New Zealand Nov Final ANZ Activity Outlook: 15.0 v 15.6 prelim; Business Confidence: -16.4 v -18.1 prelim.
- (NZ) Reserve Bank of New Zealand (RBNZ) Chief Economist Ha: No plans to use QE Bondholdings as monetary tool; Risks would slant up if not for market pricing.
Japan
- Nikkei 225 opened +1.2%.
- (JP) JAPAN NOV JOBLESS RATE: 2.7% V 2.8%E, Job-To-Applicant Ratio: 1.15 v 1.17e.
- (JP) JAPAN OCT PRELIMINARY INDUSTRIAL PRODUCTION M/M: +1.1% V -4.4%E (1st increase in 4 months); Y/Y: -4.7% V -2.3% PRIOR.
- (JP) Japan Fin Min Suzuki: Important to have longer term goals on budget.
- (JP) Japan MOF sells ¥3.0T v ¥3.0T indicated in 0.00% 2-year JGBs: Avg Yield: -0.121% v -0.0970% prior; bid-to-cover: 4.05x v 4.04x prior.
Korea
- Kospi opened +1.0%.
- (KR) South Korea Oct Industrial Production M/M: -3.0% v -0.1%e; Y/Y: 4.5% v 2.0%e.
- (KR) South Korea Oct Cyclical Leading Index Change: -0.5 v -0.3 prior.
China/Hong Kong
- Hang Seng opened -0.3%; Shanghai Composite opened +0.2%.
- (CN) CHINA NOV MANUFACTURING PMI (GOVT OFFICIAL): 50.1 V 49.8E (First expansion since Aug); Non-manufacturing PMI: 52.3 v 51.3e (3rd consecutive expansion).
- (CN) China Financial News (PBOC Backed): OMO Injections show that the PBOC Goal is to keep reasonably ample liquidity.
- 1383.HK Comments on arrest of CEO Chau, will be negatively impacted should it lose the support of Chau and his associated companies.
- (CN) China PBOC to conduct CNY5.0B in 3-month Central Bank Bill Swap (CBS) operation on today's session v CNY5.0B prior.
- (CN) China Govt isues guidelines on ensuring car hailing drivers have rights: Urges car hailing companies to offer social insurance to drivers; Will deepen anti monopoly crackdown in car hailing sector.
- (CN) China PBOC sets Yuan reference rate: 6.3794 v 6.3872 prior.
- (CN) China PBOC Open Market Operation (OMO): Sells CNY100B in 7-day reverse repos v CNY100B prior; Net inject CNY50B v Net inject CNY50B prior.
Other
- 2303.TW To raise prices by up to 12% on long term contracts.
- (SG) Singapore started contact tracing for airport staff who may have come into contact with two travelers infected with the omicron variant, Passengers transited through Changi Airport on their way to Australia from South Africa.
North America
- (US) Adobe: US customers have spent $7.1B on Cyber Monday as of 9PM ET v $10.2-11.3B prior guided v $10.8B y/y.
- MRNA CEO Reiterates that he believes that the current coronavirus vaccines will not be as effective against the Omicron Variant of coronavirus.
- (US) Fed Chair Powell: Greater virus concerns could slow job market progress and intensify supply chain woes; Omicron variant adds to economic risks and inflation uncertainty - testimony to Senate.
- (US) NIH's Fauci: Does not foresee new travel restrictions coming due to Omicron variant, cannot predict if it will become dominate variant in US.
- (US) Senate has blocked the Annual Defense bill with Republican Objections with Democratic Senators seeking passage, vote ongoing.
- TWTR Confirms Jack Dorsey steps down as CEO; Board unanimously appoints CTO Parag Agrawal as successor; Salesforce COO Bret Taylor named Independent Chair of the Board; Affirms Q4 and FY21 outlook (US morning).
Europe
- (EU) ECB's De Guindos (Spain): Watching omicron variant closely, recommends banks be cautious with provisions.
- Expecting earnings from EasyJet and Volvo today.
Levels as of 00:15ET
- Hang Seng -1.4%; Shanghai Composite +0.3%; Kospi -1.1%; Nikkei225 +0.1%; ASX 200 +0.7%.
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax -0.4%; FTSE100 -0.0%.
- EUR 1.1305-1.1285; JPY 113.89-113.43; AUD 0.7155-0.7131; NZD 0.6835-0.6815.
- Commodity Futures: Gold +0.3% at $1,790/oz; Crude Oil +0.8% at $70.48/brl; Copper -0.4% at $4.33/lb.
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