Light trading in Asia, with several markets closed tomorrow
|Asia market update: Light trading in Asia, with several markets closed tomorrow (Dec 31st); US to give CN roadmap for chip-relateds as tech dominates Asia news flow; Precious metals find a floor.
General trend and developments
- Asian markets were quiet, with a number closed tomorrow (Wed Dec 31st ), including Australia, Hong Kong, Japan, New Zealand, Philippines, South Korea, Thailand.
- Little macro data out of Asia today. South Korea saw the largest decline of Retail Sales in 21 months for Nov, with the agency citing factors of weaker sales of food and apparel. Nov Industrial Production also well below estimates.South Korea Finance Ministry will disclose a roadmap for its long-awaited MSCI Developed Market index inclusion in early 2026.
- Sources reported that Samsung and then Hynix have received US approval to once again ship their chipmaking tools to their China facilities in 2026 (** Reminder, Samsung and Hynix lost their US chip waver to send tools to China in early September). Kospi extended gains and Nikkei reversed its earlier decline on the news.
- The same sources also reported that the US is introducing an annual approval system for export licenses of chipmaking tools to China. [** Note: Watch later for any reaction for ASML and US chip-relateds].
- China’s largest chipmaker SMIC announced a $5.8B purchase for the other half of its IC wafer manufacturing unit it does not already own, saying the purchase will assist in quality and development. MaxOne Semiconductor Suzhou saw another 4-bagger in its IPO listing in Shanghai today amid the chip IPO boom in China over recent months.
- After a wild day and night of volatility, precious metals found a floor during Asian trading, with Silver moving back up 5% to $75/oz, Gold up slightly to $4,375, Copper back up +2.5% Palladium stabilized after losing as much as 15% yesterday and Platinum back up 2.5%.
- China offshore Yuan again broke through 7.00 and on to its strongest level since May 2023.
- US equity FUTs flat during Asian trading.
Looking ahead (Asian-weighted focus, using Asian time zone)
- Tue Dec 30th (Tue night US FOMC Minutes).
- Wed Dec 31st KR Dec CPI, China Dec NBS Manufacturing PMI, China Dec RatingDog Manufacturing PMI.
- Thu Jan 1st KR Dec Exports.
- Fri Jan 2nd S&P Dec Global PMIs, ID Dec CPI.
Holidays in Asia this week
- Tue Dec 30th Philippines.
- Wed Dec 31st Australia, Hong Kong, Japan, New Zealand, Philippines, South Korea, Thailand.
- Thu Jan 1st Australia, China, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, UK.
- Fri Jan 2nd China, Japan, New Zealand, Thailand.
Headlines/economic data
Australia/New Zealand
- ASX 200 opens -0.1% at 8,716.
China/Hong Kong
- Hang Seng opens flat at 25,636; Shanghai Composite opens +0.1% at 3,965.
- US said to introduce annual approval system for export license for chipmaking tools to China - US financial press, citing sources.
- China onshore Yuan pierces 7.00 to trade at its highest levels since 2023.
- China Military (PLA) comments on the 2nd day of 'War Games' around Taiwan: Has deployed destroyers, bombers and other forces.
- China held Rural Work Conference on Dec 29-30th: Will not relax grain production efforts; to keep prices of grain and other major agricultural products at 'reasonable level'; will uphold 'arable land red line'.
- China banks reportedly offering certain rewards to attract deposits – press.
- China’s State Administration for Market Regulation pledging to step up anti-monopoly efforts and thoroughly address “involutionary” competition – press [overnight update].
- (MX) Mexico Pres Sheinbaum signs import tariff reform decree into law; Applies provisional duty on some China aluminum imports – press [overnight update].
- China adjusts 2026 tariffs for "some" products to increase tech self-reliance; To lower import tariffs of key spare parts in 2026; No further details – press [overnight update].
- Hong Kong Nov Trade Balance (HKD): -48.5B v -35.7Be [overnight update].
- China PBOC sets Yuan reference rate: 7.0348 v 7.0331 prior.
- China PBOC Open Market Operation (OMO): Injects CNY313B in 7-day Reverse Repos; Net injects CNY253B v injects CNY415B prior.
Japan
- Nikkei 225 opens -0.4% at 50,353.
Korea
- Kospi opens -0.6% at 4,193.
- South Korea Nov Retail Sales M/M: -3.3% [largest decline in 21 months]; cites factors including weaker sales of food and apparel - update.
- South Korea Dec Business Manu facturing Survey: 94.4 v 92.7 prior.
- South Korea Nov Industrial Production M/M: 0.6% v 2.4%e; Y/Y: -1.4% v +2.2%e.
- South Korea Finance Ministry: To disclose roadmap for MSCI Developed Market index inclusion in early 2026.
- Samsung: Reportedly receives US approval to ship chipmaking tools to its China facilities in 2026 - Press, citing sources.
- Bank of Korea (BOK): Foreign currency deposits rise for the first time in 3 months in Nov to $103.6B, +$1.7B m/m; cites payments received by companies for current transactions.
- South Korea reportedly to issue FX stabilization bonds in late Jan 2026 – press [overnight update].
Other Asia
- Thailand Central Bank to establish a joint committee with the anti-money laundering office for the purpose of inspecting gold-related transactions.
- Taiwan Pres Lai: Will jointly defend national sovereignty of Taiwan with 'frontline soldiers' - post on Facebook.
- Taiwan Defense Ministry: Detected 90 Chinese aircraft crossing Taiwan Strait median, entering Adiz.
- Taiwan Transport Ministry: Cancelling ~850 flights tomorrow as China conducts 'rocket firing' exercise on Tues, Dec 30th [overnight update].
- Taiwan Nov Monitoring Leading Indicator: 37 v 35 prior [overnight update].
North America
- Manus to join Meta Platforms, the co. plans to integrate Manus service into the products of Meta; financial terms not disclosed.
- Follow Up: Neta said Manus will cut China ties after acquisition - Nikkei.
- (BR) Brazil Dec FGV Inflation IGPM M/M: 0.0% v 0.2%e; Y/Y: -1.1% v -0.9%e.
- (US) Nov pending Home Sales M/M: 3.3% V 1.0%E; Y/Y: -0.3% V 0.1%E.
- (US) DEC DALLAS Fed Manufacturing activity: -10.9 V -6.0E.
Europe
- (US) White House: US, Israel come to trade agreement on agricultural products, temporary extension of certain provisions.
- (US) Pres Trump, top Aides said to have asked PM Netanyahu to change West Bank occupation policy - Axios.
- (DE) Survey sees close to half of German business groups expecting job cuts in 2026 - Press [update].
- (UR) Reportedly Ukraine tried to attack Putin's residence in Novgorod region; Russia plans to change its position, but will continue to negotiate - press.
Levels as of 01:20 ET
- Nikkei 225 -0.1%; ASX 200 -0.1%; Hang Seng +0.5%; Shanghai Composite +0.1%; Kospi +0.3%.
- Equity S&P500 Futures flat; Nasdaq100 flat; DAX flat; FTSE100 flat.
- EUR 1.1757.117.87; JPY 155.94-156.34; AUD 0.6689-0.6712; NZD 0.5798-5814.
- Gold +0.8% at $4,376/oz; BTC -3.0% at $87,330; Crude Oil -0.1% at $58.03/bbl; Copper +2.3% at $5.7018/lb.
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