Equity markets track US declines

Asia Market Update: Equity markets track US declines; US and China officials try to reassure markets on trade talks; China services PMI surprises but outlook concerns remain, Aussie GDP slows more than expected

General Trend:

- Equities markets across the region open lower tracking New York markets Monday. Financials and Semis weigh on markets in Asia

- Trade sensitive Marine Transportation and Iron/Steel sectors weigh on markets in Japan

- Equity Futures rise after declines seen on Tuesday’s session

- Aussie dollar declines on weaker Q3 GDP

- Asian bonds gain amid growth concerns, move higher in US Treasury prices

- Nissan fails to nominate a new chairperson

- Japan JGB Futures trade at highest level since Nov 2016, tracks Tuesday's gain in US Treasuries and equity market declines

- Oil prices decline by over 1.5% in Asia

Looking Ahead: US equity markets to close on Dec 5th in honor of former President George H. W. Bush

 

Headlines/Economic Data

Japan

- Nikkei 225 opened -1.3%

- (JP) Bank of Japan (BOJ) Deputy Gov Wakatabe: Will maintain 'massive' stimulus to nudge up prices to 2% target

- (JP) Japan govt reportedly to increase spending on public works to ¥3T, a decade-high level in next year's budget – Nikkei

- 8591.JP Orix said to acquire Japan's Cornes AG for ¥40B ($355M) – Nikkei

- (JP) Japan Nov PMI Services: 52.3 v 52.4 prior; Composite: 52.4 v 52.5 prior

- (JP) BOJ announcement related to daily bond buying operation: Raises 10-25 yr purchases to ¥200B from ¥180B

-4502.JP ~88% of shareholders approve merger with Shire

Korea

- Kospi opened -1.3%

- (KR) South Korea Nov Foreign Exchange Reserves: $403.0B v $402.8B prior

- (KR) Bank of Korea (BOK) sells KRW2.2T in 2-yr Monetary Stabilization Bonds (MSBs) at 1.93%

- 068270.KR Presents positive results for CT-P10, biosimilar rituximab, in advanced follicular lymphoma at the American Society of Hematology Meeting 2018

China/Hong Kong

- Hang Seng opened -1.9%, Shanghai Composite -1.4%

- (CN) Fitch affirms China sovereign rating at A+; Outlook stable

- (CN) China PBoC struggling as the easing it is giving banks is not resulting in impacting the real economy - SCMP

- 1958.HK Reportedly Daimler is in talks with BAIC; said to float plan to boost stake in China Venture - press

- (CN) Analysts warn that 90-days is not enough time bridge the very wide gap between China and the US on trade - SCMP

- (CN) China top developers fall as Nov figures show another month of declines, property market looking at a possible year of recession depending on Dec – SCMP

- (CN) China Commerce Ministry (MOFCOM): Reiterates to push forward trade negotiations with the US in 90-days, confident to execute trade talk results; To implement specific items agreed upon meeting 'ASAP'

- (HK) Hong Kong Nov PMI: 47.1 v 48.6 prior (close to 2.5-yr low)

- (CN) China National Development and Reform Commission (NDRC): Govt agencies sign MOC for joint efforts to strengthen punishment for intellectual property (IP) infringements – Xinhua

- (CN) Analysts note that China's pledge to buy more American agricultural products could turn a bumper Brazil harvest of soybeans into a global glut – SCMP

- (CN) China PBoC Open Market Operation (OMO): Skips open market operation v skipped prior (29th straight skip)

- (CN) China PBoC sets yuan reference rate: 6.8476 v 6.8939 prior (strongest fix since late Sept )

- (CN) CHINA NOV CAIXIN PMI SERVICES: 53.8 V 50.7E (5-month high); COMPOSITE: 51.9 V 50.5 PRIOR

- (US) We are either going to have a REAL DEAL with China, or no deal at all - at which point we will be charging major Tariffs against Chinese product being shipped into the United States. Ultimately, I believe, we will be making a deal - either now or into the future...China does not want Tariffs! - tweet

Australia/New Zealand

- ASX 200 opened -0.9%

- (AU) AUSTRALIA Q3 GDP Q/Q: 0.3% V 0.6%E (lowest rate since early 2017); Y/Y: 2.8% V 3.3%E; GDP Final Consumption: 0.3% v 0.7% prior; GDP Deflator q/q: 0.9% v 0.1% prior; GDP Capital Expenditure q/q: 0.1% v 0.0% prior

- (NZ) NEW ZEALAND Q3 VOLUME OF ALL BUILDINGS Q/Q: 0.7% V 2.3%E

- TME.NZ Confirms alternative preliminary nonbinding indicative proposal for NZ$6.45/shr received from Hellman & Friedman

- (AU) Australia Nov Final PMI Services: 53.7 v 52.6 prior; Composite: 53.9 v 52.9 prior

- YAL.AU Hong Kong HK$1.18B IPO priced at HK$23.48/shr; retail portion 0.19x covered

- TPM.AU FY19 results are tracking well ahead of guidance – AGM

- (AU) Australia sells A$1.0B v A$1.0B indicated in 2029 bonds; avg yield 2.5399% v 2.6596% prior, bid to cover 2.51x v 2.56x prior

- (AU) AMP Capital Chief Economist said the Reserve Bank of Australia (RBA) might be confronted with having to cut rates in H2 2019 (prior Q2 2019)

Other Asia

- (PH) PHILIPPINES NOV CPI Y/Y: 6.0% V 6.3%E (slowest pace since July)

- (PH) Philippines Central Bank (BSP) Gov Espenilla: Monetary policy to stay vigilant; Nov inflation confirms inflation is heading back to the 2-4% target range

North America

- (US) Weekly API Oil Inventories: Crude: +5.4M v +3.5M prior(build in all categories)

- F CEO Hackett says to make interim announcement related to workforce this week - US financial press

- (US) Special Counsel Mueller recommends no jail time for former national security advisor Michael Flynn, he provided "substantial assistance" with Russia and Trump campaign

Europe

- (UK) UK PM May Government defeated 321-299 in Vote on Parliament Brexit Power

- (UK) UK Parliament find Government in contempt over Brexit legal advice; UK Gov defeated in contempt motion 311-293; Orders Gov to publish full advice immediately; UK Parliament leader Andrea Leadsom says govt will publish its full Brexit legal advice tomorrow

- (UK) UK does not need to pass legislation through Parliament to revoke Article 50 - Sky News

- (IT) Dep PM Salvini tweets (translated): "Where it is written that I have to remove €4B from the pockets of Italians because a European commissioner told me to do so?"

- (US) White House spokesperson: Trump told German automakers he'd like to see more cars being made in the US; has no immediate plans to impose tariffs on their cars

 

Levels as of 12:50ET

- Hang Seng -1.8%; Shanghai Composite -0.8%; Kospi -0.8%; Nikkei225 -0.7%; ASX 200 -0.7%

- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.4%, Dax +0.2%; FTSE100 +0.3%

- EUR 1.1318-1.1418; JPY 112.65-113.09 ; AUD 0.7282-0.7356;NZD 0.6909-0.6945

- Feb Gold -0.5% at $1,240/oz; Jan Crude Oil -1.5% at $52.44/brl; Feb Copper +0.2% at $2.76/lb

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