Chinese equities outperform, the Yuan rises

Asia Market Update: Chinese equities outperform, Yuan rises; USD trades generally weaker; More CN cities announced further easing of COVID curbs; US ISM services PMI is due later today.

General trend

- AUD rises ahead of RBA rate decision [Dec 6th].

- Crude Oil FUTs trade higher amid focus on OPEC+, Russian oil price cap and China.

- Asian equities trade generally higher.

- Nikkei 225 lags.

- US equity FUTs remain lower.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.3%

- (AU) Australia Nov Final PMI Services: 47.6 v 47.2 prelim (confirms 2nd consecutive contraction)

- (AU) Australia Nov AIG Construction Index: 48.2 v 43.3 prior (6th consecutive contraction)

- (AU) Australia Nov Melbourne Institute Inflation M/M: 1.0% v 0.4% prior; Y/Y: 5.9% v 5.2% prior [y/y is a multi-year high]

- *(AU) Australia Q3 corp profit Q/Q: -12.4% V -1.5%E; inventories Q/Q: 1.7% V 1.0%E

- (NZ) Reserve Bank of New Zealand (RBNZ) Chief Economist Conway reiterates support for monthly inflation data in NZ

- (NZ) Reserve Bank of New Zealand (RBNZ) issued decision on mortgage bond standards: to not introduce a new mortgage bond standard in the form of Residential Mortgage Obligations (RMO)

- (NZ) New Zealand Nov ANZ Commodity Price M/M: -3.9% v -3.4% prior

China/Hong Kong

- Hang Seng opens +2.9%; Shanghai Composite opens +0.8%

- (CN) More Chinese cities announce further easing of COVID curbs; From Dec 5th, Shanghai and Zhejiang Province residents will no longer have to show a negative COVID test to take public transport and visit parks – press

- (CN) Beijing City official: Buses, subway can't reject people with no COVID result [from Dec 2nd]

- Onshore Yuan (CNY) strengthens past 7.00 per US dollar [first time since Sept]

- (CN) China PBOC to facilitate overseas institutions' bond sale in China; Will facilitate foreign institutions' financing in domestic bond market – press [from Dec 2nd]

- (CN) China's top four banks said to plan to issue offshore loans for Chinese developers' overseas debt repayments – press [from Dec 2nd]

- Evergrande [3333.HK]: Evergrande's unit bondholders reportedly approved bond payment delay – press [from Dec 2nd]

- (CN) China PBOC expected to lower the amount of OMOs toward the end of 2022; the move would be aimed at avoiding excess liquidity – China Securities Journal

- *(CN) china Nov caixin PMI services: 46.7 V 48.0E [lowest since May; 3rd straight contraction]

- (CN) China PBOC Open Market Operation (OMO): Sells CNY2.0B in 7-day reverse repos v CNY2.0B prior; Net drains CNY53.0B v net drains CNY6.0B prior

- (CN) China PBOC sets Yuan reference rate: 7.0384 v 7.0542 prior [strongest Yuan fixing since Nov 16th]

- (HK) Hong Kong Nov PMI (Whole Economy): 48.7 v 49.3 prior (3rd straight contraction)

Japan

- Nikkei 225 opens -0.1%

- (JP) Japan Nov Final PMI Services: 50.3 v 50.0 prelim (confirms 2nd consecutive expansion)

Korea

- Kospi opens +0.3%

- (KR) South Korea Nov Foreign Reserves: $416.1B v $414.0B prior

- (KR) South Korea President Yoon: Sees 2022 exports >$680.0B [record high]

- (KR) Bank of Korea (BOK): Confirms to provide KRW3.5T in liquidity by using repo transactions

Other Asia

- (IN) India Nov Services PMI: 56.4 v 55.1 prior [16th month of expansion]

- (SG) Singapore Nov PMI (Whole economy): 56.2 v 57.7 prior (24th consecutive expansion)

- (SG) Singapore Oct Retail Sales M/M: 0./1% v 3.2% prior; Y/Y: 10.4% v 10.7%e

- Foxconn: Said to target full production at Zhengzhou (China) plant [world's largest iPhone assembling plant] in either late Dec or early Jan – financial press

North America

- *(US) Nov change in Nonfarm Payrolls: +263K V +200KE (above all analysts' estimates) [from Dec 2nd].

- *(US) Nov average hourly earnings M/M: 0.6% V 0.3%E; Y/Y: 5.1% V 4.6%E [Dec 2nd].

Europe

- *OPEC+ makes no changes in its current oil output policy (as expected); Agrees to keep 2MBpd production cuts through Jan 2023; Notes it is ready to meet at short notice to address any oil market imbalance – press [from Dec 4th].

- *(RU) EU, G7 and Australia statement: Reached consensus on $60/bbl price cap on Russian seaborne oil, Hungary was granted exception; The price cap mechanism to be reviewed every two months starting in mid-Jan 2023 [from Dec 2nd].

- (RU) Russian govt spokesperson Peskov: Russia will not accept oil price cap; Russia had prepared for the price cap and was analyzing it [from Dec 4th].

- (EU) ECB’s Villeroy (France): Call for 50bps rate hike at Dec 15th's meeting; Also call for measures to reduce balance sheet in H1 2023.

- (IE) Ireland Nov PMI Services: 50.8 v 53.2 prior (21st consecutive expansion).

Levels as of 00:20 ET

- Nikkei 225, flat, ASX 200 +0.3% , Hang Seng +3.2%; Shanghai Composite +1.5% ; Kospi -0.8%.

- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 flat.

- EUR 1.0583-1.0530 ; JPY 134.76-134.13 ; AUD 0.6850-0.6779 ;NZD 0.6444-0.6365.

- Gold +0.6% at $1,821/oz; Crude Oil +0.8% at $80.65/brl; Copper +0.5% at $3.8750/lb.