CN property developers rally on stimulus news, other indices lag in Asia

Asia Market Update: CN property developers rally on stimulus news, other indices lag in Asia; CNH rises; USD trades generally firmer; China Oct data and MLF announcement due tomorrow ; RBA minutes also due on Tues; Biden and Xi to meet later today.

General trend

- Hang Seng Mainland Properties Index rises >15% [China announced a 16-point plan to rescue property companies].

- Will China’s property rescue plan impact USD-denominated bonds or Evergrande?

- UST yields jump following US government holiday.

- (US) Fed's Waller (voter): looking at a possible 50bps next meeting; will slow pace of QT when get closer to 10% of reserves [Nov 13rd].

- China PBOC set Yuan reference rate: 7.0899 v 7.1907 prior (midpoint lift was highest in percentage terms since FX reform in 2005).

- GBP extends decline amid recent BOE comments.

- Japanese equities lag; SoftBank Group drops on earnings.

- TOPIX Banks index declines ahead of Japanese bank earnings.

- US equity FUTS decline.

- FTX remains in the headlines.

Headlines/economic data

Australia/New Zealand

- ASX 200 opened +0.4%.

- (NZ) BNZ [private bank] Economists believe RBNZ would prefer to hike the OCR by only 50bps as opposed to 75bps - NZ press [next RBNZ decision is Nov 23rd].

- (NZ) New Zealand Oct Performance Service Index (PSI): 57.4 v 55.9 prior.

Japan

- Nikkei 225 opened flat.

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].

- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Unchanged.

- (JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates domestic economy picking up; BOJ to conduct appropriate policy by watching risks.

Korea

- Kospi opened flat.

- (KR) South Korea said to consider increasing electricity rates for 2023 - Press.

- (KR) South Korea sells 10-year bonds: Avg yield 3.870% v 4.245% prior.

- (KR) Bank of Korea (BOK) Sells 3-month Monetary Stabilization Bonds (MSB): Avg yield 3.350% v 3.325% prior.

China/Hong Kong

- Hang Seng opened +3.9%; Shanghai Composite opened +0.4%.

- (CN) China Sec Journal: China expected to inject liquidity via a new MLF, could provide 1.0T in 1-year facility.

- (CN) Reportedly China PBOC and insurance regulator tell financial firms to extend financing support to property firms; NAFMII [interbank bond market regulator] announced a CNY250B financing program [now available to property developers]; Banks were also told to provide CNY400B in loans to developers in Nov and Dec - press.

- (CN) President Biden and China President Xi to meet this evening in Bali; meeting to begin at 5:30 PM local time [9:30 AM GMT].

- (CN) China Ministry of Finance (MOF) Sells 10-year bonds: avg yield 2.8000% v 2.7034% prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY5.0B in 7-day reverse repos v CNY12B prior; Net drain CNY3.0B v net inject CNY9.0B prior.

- (CN) China Ministry of Commerce exec Vice Chair Bi Jingquan indicated it would increase further controls over bioequivalence test for generic drugs, a move introduced back in 2016 to make sure the quality and efficacy of generic drugs are on par with brand-name drugs (update).

- (CN) China has extended the lockdown in Panyu and Liwan until Weds (Nov 16th).

- (CN) China PBOC sets Yuan reference rate: 7.0899 v 7.1907 prior (midpoint lift was highest in percentage terms since FX reform in 2005).

- (HK) Huobi [HK-listed crypto exchange]: Notes failure to withdraw cryptocurrency assets from FTX.

North America

- FREY KKR said to be in talks to invest $500M in the co. - US financial press.

- (US) Administration Senior Official: G20 first serious in person diplomacy with China in Years; Concerns on North Korea nuclear tests, Looking for a floor on US-China relationship.

- V Terminated global debit card agreements with FTX, wound down by issuer.

- (US) Democrats maintain control of the US Senate, to have at least 50 seats following victory in Nevada - press.

- (US) US Treasury Sec Yellen: Working with France on implementing Russia oil price cap, US-France relationship crucial.

- (US) Fed's Waller (voter): Given level of inflation, rates are not that high; CPI report was "just one data point" and markets are "way out in front"; Rates will not fall until there is "clear, strong evidence" inflation is falling; market over reacted to one CPI data point; looking at a possible 50bps next meeting.

- (US) Treasury Sec Yellen: The existence of a G7 price cap on oil will give India, China and African countries bargaining power with Russia on oil.

- (US) Fed's Collins (voter): Risk of over tightening on rates has increased.

Europe

- (RU) Russia Customs agrees to increase grain export quota in 2023 - Russia media.

- (UK) Nov Rightmove House Prices M/M: -1.1% v +0.9% prior; Y/Y: 7.2% v 7.8% prior.

- (IE) Ireland Oct Construction PMI: 47.4 v 50.2 prior.

- (CZ) Czech Central Bank (CNB) Gov Michl: Calls for a 2023 wage growth cap at ~5.0% - Press.

- (RU) Reportedly LME will not ban Russian metal from being stored and traded in its system - press.

Levels as of 00:20 ET

- Nikkei 225, -0.8%, ASX 200 -0.2% , Hang Seng +2.5%; Shanghai Composite +0.4% ; Kospi +0.1%.

- Equity S&P500 Futures: -0.3%; Nasdaq100 -0.5%, Dax -0.2%; FTSE100 -0.1%.

- EUR 1.0350-1.0305 ; JPY 139.94-138.78 ; AUD 0.6709-0.6671 ;NZD 0.6121-0.6065.

- Gold -0.2% at $1,765/oz; Crude Oil +0.2% at $89.11/brl; Copper -1.2% at $3.8905/lb.