AUD/NZD rises ahead of Wed’s RBNZ rate decision

Asia Market Update: Equity indices trade mixed amid Japanese holiday; AUD/NZD rises ahead of Wed’s RBNZ rate decision.

General trend

- USD/JPY tests ¥115 (first time since 2017) amid Powell reappointment and recent Fed speak.

- US equity FUTs pare gains.

- Nikkei closed for Labor Thanksgiving.

- Press continues to debate if PBOC will cut RRR rates, some banks in China were said to be instructed by regulators to issues more loans to property companies.

- Samsung said to pick Texas for new factory location in the US.

- Hang Seng has traded lower; TECH index declines amid continued regulatory concerns related to online cos.; Companies due to report earnings include Kuaishou, Xiaomi and XPeng.

- Shanghai Composite traded slightly higher during the morning session (+0.4%).

- S&P ASX 200 has remained higher; Iron ore miners rise on bounce in Chinese ore prices.

- Looking ahead to tomorrow RBNZ will hold its last rate decision for the year. rates widely expected to go up by 25bps to 0.75%, but 33% see a 50bps rate hike to 1.00%, though previously RBNZ had said they would not hike by 50bps.

- Companies due to report during the NY morning include Analog Devices, American Eagle, American Woodmark, Abercrombie & Fitch, Best Buy, Burlington Stores, Kanzhun Limited, Cracker Barrel, Dick’s Sporting Goods, Dollar Tree, Dycom Industries, Jacobs Engineering, Jack in the Box, Aurora Mobile, Medtronic, Movado, J. M. Smucker, Tarena International, Titan Machinery.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.1%.

- (AU) AUSTRALIA NOV PRELIMINARY PMI MANUFACTURING: 58.5 V 58.2 PRIOR (18th month of expansion, highest since June).

- (NZ) New Zealand Q3 Retail Sales (ex-inflation) Q/Q: -8.1% v -10.5%e.

- BKW.AU Notes steady start to FY22, expect strong half from property unit – AGM.

- (AU) Reserve Bank of Australia (RBA) Kohler: RBA's package of measures has lowered funding costs across the economy and supported the availability of credit for households and businesses - speech Australian Securities Markets Through the Pandemic.

Japan

- Nikkei 225 closed for holiday.

Korea

- Kospi opened 0.0%

- (KR) South Korea Nov Consumer Confidence: 107.6 v 106.8 prior (5 month high); Households’ inflation expectation for next 12 months 2.7%.

- (KR) South Korea Fin Min: To reduce govt bond sales by KRW2.5T; To extend tax cuts on automobile purchases through June; Govt will unveil a package of measures to support small merchants, including low interest rate loans and cuts in electricity bills – Yonhap.

- 005935.KR Expected to build $17B US Chip factory in the US, to begin production by end of 2024 - press.

China/Hong Kong

- Hang Seng opened -1.1%; Shanghai Composite opened 0.0%.

- (CN) China and Hong Kong Officials to hold Travel talks on Thurs (Nov 25); Hong Kong doesn't expect travel resumption by Dec 19th.

- (CN) China seen as less likely to cut Medium Term lending Facility (MLF) during this year - China Press.

- (CN) Reportedly some Chinese banks were told to issue more loans to property development companies in Nov than in Oct – press.

- (CN) China PBoC advisor Liu Shijin: Domestic economy could enter a period of quasi stagflation if demand stays weak.

- (CN) China PBOC sets Yuan reference rate: 6.3929 v 6.3952 prior.

- (CN) China PBOC Open Market Operation (OMO): Injects CNY50B in 7-day reverse repos v CNY50B prior; Net CNY0B v Net inject CNY40B prior.

North America

- (US) SEMI Oct North America-based Manufacturers of Semi Equipment Billings: $3.74B, +0.6% m/m and +41.3% y/y.

- (US) Treasury Sec Yellen: Expect monthly CPI 0.2-0.3% in H2 2022, price pressures to subside as life normalizes in 2022.

- (US) Fed's Bostic (FOMC voter, hawk): Fed Chair Powell Reappointment removes uncertainty; Good arguments for faster taper, we should consider how fast we execute taper.

- (US) PRESIDENT BIDEN NOMINATES FED CHAIR POWELL FOR SECOND TERM; BRAINARD AS VICE-CHAIR - WHITE HOUSE; Currently, 3 job openings remain opened in Fed including Vice Chair for Supervision position; To name those seats in early Dec.

Europe

- (FR) France President Macron approval rating +4ppt to 44% - Odoxa poll.

- (RU) US is reportedly considering sending extra weaponry and military advisers to Ukraine amid growing fears of Russian invasion - CNN.

Levels as of 00:15ET

- Hang Seng -1.1%; Shanghai Composite +0.4%; Kospi -0.6%; Nikkei225 +0.1%; ASX 200 +0.8%.

- Equity Futures: S&P500 +0.0%; Nasdaq100 -0.2%, Dax +0.0%; FTSE100 -0.3%.

- EUR 1.1244-1.1226; JPY 115.14-114.74; AUD 0.7237-0.7217; NZD 0.6977-0.6927.

- Commodity Futures: Gold +0.1% at $1,807/oz; Crude Oil -0.7% at $76.19/brl; Copper +0.3% at $4.40/lb.