CN to go it alone on chips? Eyes on FOMC tonight

General trend and developments

- Traders hold off ahead of the FOMC tonight, with soft equities in Asia. Kospi eked out small gains with chipmaker Hynix +5% on news it may list in the US.

- No surprises overnight with reports that China is set to limit access to Nvidia’s advanced H200 chip, despite Trump Admin decision to allow the export of the technology to China. Yet to be finally determined but the chances seem high that China will push forward its own chip makers and open source AI modelling firms.

- Then during the session reports that China has now added domestic AI chips to its official procurement list for the first time.

- Separately, reports that Nvdia said to have built location verification software to help fight chip smuggling.

- China CPI near a two-year high for November, even as Producer Prices (PPI) remained mired in more than three months of negative reads. Food and non-food components both rose.

- Stunning Nov trade numbers out of Taiwan overnight. Exports +56% rising the fastest since 2010, with imports not far behind +45%, far above already elevated expectations.

- Japan PPI for November was inline.

- In trade-related news Indonesia Rupiah (IDR) fell after USTR rep Greer believes Indonesia is 'Backtracking' on several commitments made to the US, putting the entire trade deal at risk. later denied by the Indonesia govt.

- BOJ outright bond auction today saw unusually high total bids of >¥1.1T for the 1-3 year series. 20-Year JGB auction is tomorrow.

- Philippine Peso dropped to near record lows, amid unemployment spiking to 5.0%.

- US equity FUTs flat to -0.1% during Asian trading.

JP Looking ahead (Asian-weighted focus, using Asian time zone)

- Wed Dec 10th (Wed night FOMC Rate Decision),

- Thu Dec 11th AU jobs, PH BSP Rate Decision, (Thu night US Sept Trade Balance, US Oct/Nov PPI).

- Fri Dec 12th NZ Nov Business PMI, (UK Oct GDP, IN Nov CPI),

Holidays in Asia this week

- Mon Dec 8th Philippines.

- Wed Dec 10th Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.11% at 8,595.

- Australia sells A$1.0B v A$1.0B indicated in 1.00% Dec 2030 bonds, Avg Yield: 4.3532% v 3.5254% prior, bid to cover 2.66x v 2.76x prior.

- RBNZ Gov Breman: Keeping close look on data, including inflation and GDP; No preset course for monetary policy - comments to media.

- New Zealand Oct Net Migration: 2.4K v 1.8K prior.

China/Hong Kong

- Hang Seng opens flat at 25,435; Shanghai Composite opens -0.2% at 3,901.

- *CHINA SAID TO HAVE ADDED DOMESTIC AI CHIPS TO OFFICIAL PROCUREMENT LIST FOR THE FIRST TIME – FT.

- CHINA NOV CPI Y/Y: 0.7% V 0.7%E (near two-year high).

- China MOF sells additional CNY7B of Yuan bonds in Hong Kong.

- Asia Development Bank (ADB) raises China growth from 4.7% to 4.8%.

- China said to consider cutting RRR interest rates next year, as expected - press.

- USTR Greer: China's rare earths continue to flow; Anticipates signing more trade deals in the coming weeks; Believes China is on track to fulfill soybean purchases.

- Reportedly China set to limit access to Nvidia’s advanced H200 chips despite US Pres Trump’s decision to allow the export of the technology to China as it pushes to achieve self-sufficiency in semiconductor production; No final decision had been made yet – FT [overnight update].

- China PBOC sets Yuan reference rate: 7.0753 v 7.0773 prior.

- China PBOC Open Market Operation (OMO): Injects CNY190B in 7-day Reverse Repos; Net injects CNY111B v drains CNY39B prior.

Japan

- Nikkei 225 opens +0.4% at 50,878.

- Japan Nov PPI (domestic CGPI) M/M: 0.3% v 0.3%e; Y/Y: 2.7% v 2.7%e.

- Japan BOJ Gov Ueda: Expect domestic economy to get back to growth in Q4 and beyond that; To keep adjusting easing level until prices sustainable - FT interview.

- Japan PM Takaichi: Reiterates weak Yen has both merits and demerits for the economy; Watching yield trends carefully.

- Follow up: Japan Defense Min Koizumi: China did not provide sufficient info on jet training (refers to last weekend incident).

- BOJ Outright Bond Purchase Operation for 1~3 Years; 5~10 Years; >25 Years; (Leaves purchase amounts unchanged).

- BOJ: Results of the Tokyo Money Market Survey (August 2025) - update.

- Japan Foreign Min Motegi: Will correct any misunderstandings with China [overnight update].

Korea

- Kospi opens +0.4% at 4,159.

- South Korea Nov Unemployment Rate: 2.7% v 2.6%e.

- South Korea Nov Total Bank Lending To Household (KRW): 1,175.6T v 1,173.7T prior.

- South Korea Pres Lee said to plan meeting for Wed on national chip strategy - press.

Other Asia

- Indonesia Oct Retail Sales Y/Y: 4.3%; Nov Retail Sales Est Y/Y: 5.9%.

- Taiwan Dep Fin Min Juan: Bigger stabilization fund will help boost confidence and stabilize stock market - financial press.

- (TH) US Pres Trump: Tomorrow to have a call with Thailand, Cambodia (refers to recent restart of conflict) - financial press.

- Philippines Oct Unemployment Rate: 5.0% v 3.8% prior.

- Follow up: Indonesia govt: US-Indonesia tariff negotiations 'on track' - financial press.

- (ID) Reportedly US and Indonesia's trade deal is at risk of collapse; Greer believes Indonesia is 'Backtracking' on several commitments made to the US - press.

- Taiwan Nov Trade Balance: $16.1B v $19.4Be; Exports rose the fastest since 2010; Sees Dec exports +40-45% y/y; Exports Y/Y: 56.0% v 42.1%e; Imports Y/Y: 44.9% v 16.7%e.

North America

- Nvdia said to have built location verification software to help fight chip smuggling - financial press, citing sources.

- US Pres Trump: (Reiterates) We've a bad Fed Chair; Going to make a change at the Fed - comments at event in Pennsylvania.

- (US) White House NEC Dir Hassett (presumptive Fed Chair nominee): Interest rate cut is the right move now; There's a lot more room left for cuts.

- US Pres Trump to begin final round of Fed Chair interviews this week; Senior Officials maintain that Kevin Hassett is the most likely candidate - FT.

- (US) Nov NFIB Small Business Optimism: 99.0 v 98.3e.

- (US) ADP Preliminary Employment Change for 4-weeks ending Nov 22nd: +4.8K v -13.5K prior on Nov 25th.

- (US) Weekly Redbook LFL Sales w/e Dec 6th: +5.7% y/y.

- (US) SEPT LEADING INDEX: -0.3% V -0.3%E.

- (US) OCT JOLTS JOBS OPENING: 7.67M V 7.12ME; Quits rate 1.8% v 2.0% prior.

- Reportedly ChatGPT has now ~900M weekly active users (up from 800M reported in Oct) - The Information.

Europe

- (US) US Pres Trump "thrashes European leaders" and describes Europe as a “decaying” group of nations led by “weak” people; Answers "yes" when asked if litmus test for next Fed Chair is immediate rate cut - Politico.

- (EU) European Commission said to present European grids package on Weds - press.

- (EU) ECB said to propose merging risk buffer and countercyclical buffer for banks - press.

- (UK) BOE Dep Gov Lombardelli: Worried about the labor market; More concerned about supply side of the labor market, than the demand side.

- (UR) Ukraine Pres Zelenskiy: Ukraine and Europe prepared to present peace plan to US; Everything depends on whether Russia ready to stop war

- (EU) ECB Panetta (Italy): Sees move away from Dollar as key world currency.

Levels as of 01:20 ET

- Nikkei 225 -0.5%; ASX 200 -0.1%; Hang Seng -0.6%; Shanghai Composite -0.8%; Kospi flat.

- Equity S&P500 Futures flat; Nasdaq100 -0.1%; DAX -0.3%; FTSE100 flat.

- EUR 1.1622.116.30; JPY 155.56-156.90; AUD 0.6629-0.6642; NZD 0.5761-5783.

- Gold -0.1% at $4,232/oz; BTC +3.0% at $92,665; Crude Oil +0.2% at $58.24/bbl; Copper +0.6% at $5.3637/lb.