CN down, ex-China equities up with currencies flat in quiet trading

Asia market update: CN down, ex-China equities up with currencies flat in quiet trading; Kevin Warsh reported as likely US Treas Sec; Focus EU & US flash PMIs tonight.

General trend

- Japanese National CPI for October came in mostly inline, with all three figures still comfortably over the BOJ target of 2.0%. Meanwhile Japan prelim PMIs saw Manufacturing log its 5th straight contraction with Services returning to expansion after a one month contraction. 10 yr JGB yield briefly touched 1.10% (first time since early July) but dipped back 2bps to 1.08% during the session.

- Australia prelim Nov Manufacturing saw a 10th straight contraction, with Services also dipping into contraction (fist time in 10 months).

- The China 10-yr bond auction saw just 2.04%, 4bps below the market yield of 2.08% and towards record lows of ~2.00%. PBOC also set the Yuan stronger by 555 pips over the estimate, while offshore Yuan held the 7.25 handle. Earlier a China state newspaper said the Yuan "may gain strength" as strength of USD 'wanes'.

- Gold and WTI crude continued to edge higher, reaching levels not seen since Nov 10-11th.

- Currencies were flat overall however the Kiwi was down -0.5% ahead of the RBNZ decision Wed Nov 27th [NZIER RBNZ Shadow Board decision prediction on Monday]

- Following group losses of ~20% yesterday on the US Federal charges of bribery against its Founder and Chair, Adani Enterprises -6% with group stocks down a further -3% to -6% in pre-market trading; Adani Green Energy and Adani Energy Solutions -10%.

- WSJ reported that Kevin Warsh now has the inside running on Treasury Secretary in the Trump Admin, potentially taking over as Fed Chair from 2026 when Powell retires. Scott Bessent said to lead the National Economic Council before replacing Warsh at Treasury in 2026. Yet to be confirmed.

- Meanwhile, Trump named former Florida AG Pam Bondi as Attorney General, after initial nominee Matt Gaetz withdrew his name overnight.

- Bitcoin traded steadily around the $99K level, just shy of $100K.

- US equity FUTs -0.1% during the Asia session.

Looking ahead (Asian time zone)

- Fri Nov 22nd (Fri eve UK Retail Sales, DE & US Nov Flash PMIs).

Holidays in Asia this week

- No holidays in Asia this week.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 8,332.

- Australia Nov preliminary manufacturing PMI: 49.4 V 47.3 PRIOR (10th month of contraction).

- Australia sells A$700M vs. A$700M indicated in 2.75% Nov 2028 bonds; Avg Yield: 4.1189% v 3.9629% prior; bid-to-cover: 4.12x v 4.52x prior.

China/Hong Kong

- Hang Seng opens +0.1% at 19,613; Shanghai Composite opens -0.1% at 3,368.

- China MOF sells 10-year Bonds; Avg Yield: 2.0400% v 2.1217% prior.

- China state newspaper says Yuan may gain strength as strength of USD 'wanes' - China press.

- China Vice Commerce Min Wang: China's foreign trade maintains a "stable and sound development trend" - financial press.

- China's Guangzhou city to eliminate difference between ordinary and non-ordinary housing from Dec 1st - Guangzhou govt statement.

- PCA: China Nov Preliminary Retail Passenger Vehicle Sales M/M: +15.4% v +7.2% prior [overnight update].

- China MOFCOM: To increase financing support for foreign firms and trade firms [overnight update].

- Hong Kong Oct CPI Composite Y/Y: 1.4% v 1.7%e [overnight update].

- China PBOC sets Yuan reference rate: 7.1942 v 7.1934 prior.

- China PBOC Open Market Operation (OMO): Injects CNY635B in 7-day reverse repos; Net drains CNY346B v net injects CNY142B prior.

Japan

- Nikkei 225 opens +0.3% at 38, 146.

- Japan Oct national CPI Y/Y: 2.3% V 2.3%E; CPI ex fresh food (CORE) Y/Y: 2.3% V 2.2%E.

- Japan Nov preliminary Manufacturing PMI: 49.0 V 49.2 PRIOR (5th straight contraction).

- Bank of Japan (BOJ) announcement related to outright bond buying operations: 1-3 Years; 3-5 Years, 5-10 Years and >25 Years; (Inline with prior purchases).

- Bank of Japan (BOJ) Terminal rate seen at 1.00% according to financial press poll of economists.

- Japan to sell 3-Month Bills; Avg Yield: 0.1210% v 0.1276% prior; bid-to-cover: 2.65x v 2.85x prior.

- Japan PM Ishiba confirms overall stimulus impact to be ¥39T; Govt to allocate increased ¥13.9T from general account for stimulus package (prior ¥13.5T on Nov 14th) - financial press.

- Seven & i: Couche-Tard says will Not seek hostile takeover bid for Co - Nikkei.

- More press speculation that Japan PM Ishiba set to announce ¥21.9T (~$140B) stimulus package - press.
[overnight update]

Korea

- Kospi opens +0.5% at 2,493.

- North Korea Leader Kim Jong Un: Korean peninsula has never faced such risk of nuclear war as it does now - State media KCNA.

Other Asia

- Adani Enterprises -6%; Group stocks down -3% to -6% in pre-market trading; Adani Green Energy and Adani Energy Solutions -10%.

- India Nov Preliminary Manufacturing PMI: 57.3 v 57.5 prior (41st month of expansion); Services PMI: 59.2 v 58.5 prior.

- Singapore Q3 Final GDP Q/Q: 3.2% v 2.7%e; Y/Y: 5.4% v 4.7%e.

North America

- *(US) Trump said to consider having Kevin Warsh serve as Treasury Sec and then Fed Chair - WSJ Timiraos.

- US Pres Elect Trump names Pam Bondi as Attorney General - press.

- (RU) Reportedly US investor Stephen P. Lynch said to be attempting to acquire Nord Stream 2 gas pipeline - WSJ.

- (MX) Mexico Finance Ministry: Refinances debt due to mature 2024-2026 for MXN150B to later years - statement.

- (AR) Argentina Nov Consumer Confidence: 45.0 v 42.4 prior.

- (US) Redfin: The number of homebuyers and sellers contacting Redfin agents has jumped over the last week, with Redfin’s Homebuyer Demand Index posting its biggest Y/Y increase since early 2022.

- (US) Initial jobless claims: 213K V 220KE (lowest since Apr); continuing claims:1.908M V 1.88ME (~1-yr high).

- (US) Nov Philadelphia Fed business outlook: -5.5 V +8.0E; Prices Paid: 26.6 v 29.7 prior; New Orders: 8.9 v 14.2 prior.

- (US) Oct existing home sales: 3.96M V 3.95ME; Months supply: 4.2 v 4.3 prior.

- (US) Oct leading index: -0.4% V -0.3%E.

- (US) Weekly EIA Natural Gas inventories: -3 BCF VS. +5 BCF TO +7 BCF indicated range (first negative reading since early Sept).

- (US) Matt Gaetz withdraws from consideration as AG.

Europe

- (UK) Nov GfK Consumer Confidence: -18 v -22e.

- (FR) French-German 10-year yield spread rises to one-month high amid French budget saga continues.

- (EU) ECB's Patsalides (Cyprus, voter): Approach to rate cuts must be gradual.

- (UK) BOE Dep Gov Ramsden: Inflation is close to target while service inflation remains quite high.

- (ZA) South Africa central bank (SARB) cuts interest rates by 25bps to 7.75%; as expected.

- (EU) ECB’s Holzmann (Austria): Warnings of undershooting 2% aren't warranted; December rate cut likeliest outcome, but not certain - press interview.

- (UK) BOE’s Mann (dissenter): Should hold rates for longer to evaluate persistence.

- (EU) Eurozone nov advance consumer confidence: -13.7 V -12.4E.

- (ES) Spanish Parliament approves new fiscal package.

Levels as of 00:20 ET

- Nikkei 225 +1.0%, ASX 200 +0.9, Hang Seng -1.4%; Shanghai Composite -1.5%; Kospi +1.1%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.1%%; Dax +0.2%; FTSE100 +0.1%.

- EUR 1.0465-1.0479; JPY 153.97 -154.59; AUD 0.6488-0.6522; NZD 0.5829-0.5861.

- Gold +0.6% at $2,689/oz; Crude Oil flat at $70.11/brl; Copper -0.7% at $4.0825/lb.