Equities again mixed ahead of month-end – JGB yields extend drop

Asia market update: Equities again mixed ahead of month-end; JGB yields extend drop; Dovish CB comments seen [BOJ, BOK]; CN Caixin PMI due on Fri.

General trend

-Little impact seen from weaker China PMIs.

-USD trades generally weaker.

-NZD extends rise.

-BOJ might release bond buying schedule.

- US monthly PCE due later today, Chicago PMI to also be released.

- Reminder: China set to begin requiring export permits for some graphite products on Fri, Dec 1st.

Headlines/economic data

Australia/New Zealand

-ASX 200 opens +0.1% at 7,041

- Australia Q3 private capex: 0.6% V 1.0%E [slowest pace since Q3 2022]; The mining industry was the main driver behind the growth in total new capital expenditure, increasing by 5.6 per cent in the quarter. This was offset by a fall in non-mining industries, down 1.3 per cent after large rises in the previous four quarters.

- Australia Oct Private Sector Credit M/M: 0.3% v 0.4%e; Y/Y: 4.8% v 5.0% prior.

-Australia Oct Building Approvals M/M: 7.5% v 1.4%e.

-Origin Energy [ORG.AU]: Says revised Brookfield proposal is not in best interests.

-ACCC [Australia competition regulator] grants authorisation for electricity industry coordination.

-RBNZ Gov Orr: Reiterates core inflation is too high, concerned inflation will not slow fast enough.

-New Zealand Nov ANZ Business Confidence: 30.8 v 23.4 prior [highest since Mar 2015]; Political uncertainty persisted through the month to the extent that only a tiny number of responses came in after the coalition agreements were announced.

- New Zealand Oct Building Permits M/M: 8.7% v -4.6% prior.

- New Zealand sells total NZ$500M vs. NZ$500M indicated in 2030, 2032 and 2051 bonds.

China/Hong Kong

- Hang Seng opens -0.1% at 16,985.

- Shanghai Composite opens flat at 3,021.

- China Nov manufacturing PMI (GOVT official): 49.4 V 49.8E [2nd month of contraction, lowest reading since July]; Non-Manufacturing PMI: 50.2 v 50.9e (11th month of expansion, lowest since Dec 2022).

- (US) Biden Admin reportedly to limit Chinese role in US EV market; Biden expected to release EV tax credit rules on Fri, Dec 1st - WSJ.

- Geely [175.HK]: Zeekr said to put US IPO on hold, was said to seek to raise up to $500M; cites weak market conditions - US financial press.

- China Life: To partner with New China Life Insurance on launch of CNY50B private fund; the fund will invest in onshore equities - SCMP.

-Powerlong Real Estate [1238.HK]: the co. has not made the relevant interest payment; the $15.9M payment was due on Oct 30th; relates to 2025 notes; The Non-payment will result in an event of default under the terms of certain offshore long term interest-bearing bank and other borrowings of the Company; As at the date of this announcement, the Group has not received any acceleration notice with respect to its debt.

-CICC [3908.HK]: Said to ban 'bearish' analyst research - US financial press.

-China Foreign Min Wang Yi: Recent flu cases in China are a common issue that many countries face, China has under effective control.

- China PBOC sets Yuan reference rate: 7.1018 v 7.1132 prior [strongest CNY fix since Jun 5th].

-China PBOC Open Market Operation (OMO): Sells CNY663B in 7-day reverse repos; Net injects CNY144B v drains CNY22B prior.

Japan

- Nikkei 225 opens -0.2% at 33,260.

- Japan sells ¥2.9T VS. ¥2.9T indicated in 2-year JGB bonds; AVG yield 0.0460% V 0.1060% prior; bid-to-cover: 2.91X V 3.04X prior [lowest BTC since 2009].

-Bank of Japan (BOJ) Board member Nakamura: Reiterates need to continue with easing patiently.

- Japan Oct preliminary industrial production M/M: 1.0% V 0.8%E; Y/Y: 0.9% V 0.4%E.

- Japan Oct Retail Sales M/M: -1.6% V +0.4%E; Y/Y: 4.2% V 6.0%E.

- Japan Nov Consumer Confidence: 36.1 v 35.6e.

- Japan releases weekly flows data [period ended Nov 24th]: Foreign buying of Japan equities: +¥4.2B v +¥285.9B prior; Japan buying of foreign bonds: -¥84.5B v +¥2.5B prior; Foreign buying of Japan bonds: +¥864.1B v +¥422.6B prior.

- Japan Parliament passes extra budget to fund stimulus (as expected)- press.

- LDP tax Chief expects Japan defense tax hike to begin in either FY25 or FY26 - Japanese press.

Korea

- Kospi opens -0.3%.

- Bank of Korea (BOK) leaves 7-day repo rate unchanged at 3.50%; as expected; removes considerable time from policy statement.

- Bank of Korea (BOK) Gov Rhee: Decision to keep policy steady was unanimous; 4 members open to higher interest rate [prior: 5]; current policy rate sufficiently restrictive - Post rate decision comments.

- South Korea Oct Industrial Production M/M: -3.5% v +0.4%e [fastest m/m decline since Dec 2022]; Y/Y:1.1 % v 4.5%e.

- KB Financial: Says to halt sales of HSCEI-linked ELS (**Reminder Nov 27th: South Korea to examine the bank exposures of HK stock index-linked ELS [equity-linked securities] sales - South Korea press).

Other Asia

-Taiwan: to closely monitor respiratory illness outbreak in China, to adjust prevention measures when needed - Press.

-Thailand Central Bank (BOT) leaves benchmark interest rate unchanged at 2.50%; as expected.

North America

- (US) Fed’s Bostic (voter in 2024): Tighter monetary policy is biting harder into economic activity.

- (US) Fed’s Barkin (2024 voter): Not willing to take another rate hike off the table; Skeptical for being on track for 2% inflation - CNBC.

- (US) Federal Reserve beige book: economic activity slowed since prior report; price increases largely moderated across districts, though prices remain elevated.

- (US) Q3 preliminary GDP annualized Q/Q: 5.2% V 5.0%E; PERSONAL CONSUMPTION: 3.6% V 4.0%E.

- (US) Q3 preliminary GDP price index: 3.6% V 3.5%E; CORE PCE Q/Q: 2.3% V 2.4%E.

- Costco: Reports Nov Total SSS +4.4% y/y (ex-gas and FX); US SSS +3.0% (ex-gas and FX) v +2.2% prior.

- First Quantum Minerals [FM.CA]: Announces suspension of 7,000 contract employees; cites force majeure at mine in Panama.

- Occidental Petroleum [OXY]: Said to be in talks to acquire CrownRock, the deal could value the co. at >$10.0B [including debt] - US financial press.

Europe

- OPEC+ said to be considering 1M bpd extra production cuts; Looking at output options for H1 2024 - WSJ.

- Germany Nov preliminary CPI M/M: -0.4% V -0.1%E; Y/Y: 3.2% V 3.5%E.

- (UK) Nov Lloyds Business Barometer: 42 v 35e.

- (UK) DMO sells £4.25B IN 3.5% OCT 2025 gilts; AVG YIELD: 4.554% V 4.964% prior; bid-to-cover: 2.36X V 2.61X prior; tail: BPS 2.0BPS V 1.1BPS PRIOR.

- Israel Military: Truce will continue, cites efforts to release additional hostages.

- Hamas: There is still no deal to extend truce with Israel.

Levels as of 00:20 ET

- Nikkei 225, +0.4%, ASX 200 +0.7% , Hang Seng -0.1%; Shanghai Composite -0.1% ; Kospi +0.1%.

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

- EUR 1.0984-1.0967 ; JPY 147.31-146.84 ; AUD 0.6648-0.6613 ;NZD 0.6183-0.6151.

- Gold -0.2% at $2,044/oz; Crude Oil +0.3% at $78.06/brl; Copper +0.2% at $3.8397/lb.