Focus on US Nov ISM Manufacturing PMI

Asia market update: Equities volatile, Metals higher, BTC -6% & JPY rises amid Ueda signaling Dec hike still possible; Focus on US Nov ISM Mfg PMI.

General trend and developments

- Asian equities started with a positive bias, but quickly fell to the downside, with both the Nikkei and Kospi falling >1% in the morning session. US equity FUTs also weak, down as much as -1.1%. Nikkei kept sliding -1.9% amid Gov Ueda’s comments (below), while the Kospi pared losses to head back into positive territory in volatile trading.

- JPY/USD rose back to levels not seen since the Yen’s rapid decline the other way well over a week ago as Japan BOJ Gov Ueda signaled a hike at the Dec 19th meeting appears to still be on the table. Japanese yield curve higher across the board, with 5-year and 10-year yields (1.865%, +6.5bps) hitting levels not seen since Jun, 2008. [Note that on Friday OIS chances of a December hike rose slightly to 56.5%, vs 54% Thursday and chances by January stayed flat at around 85%.].

- Spot Silver +2.0% to hit a fresh record high close to $58/oz as Gold also continued to creep towards its all time highs of October. Palladium +3%.

- Bitcoin dropped sharply -6% once Asian trading started, back to $85K handle, in tandem with falling US equity FUTs.

- Japanese Capex only half what was expected in the third-quarter, however, Company Profits rose 19.7%, multiple times what was expected.

- South Korea exports continued to rebound over the poor figures in October, up over 8% in November, driving South Korea’s trade surplus for the month nearly 20% higher than expected as US exports recovered to near flat on a y/y basis.

- Chinese official Manufacturing PMI stayed mired in an 8th month of contraction as comparisons with Japan’s lost decade(s) continue to mount. Non-Manufacturing PMI also fell back into contraction. RatingDog today finally followed the National PMI into contraction, after 3 months expansion. RatingDog noted a deterioration in manufacturing conditions.

- Asia PMI data saw the key three economies, Japan, Korea and Taiwan stay in contraction while the other economies other than Philippines all expanded.

- US consumers by early accounts were in a mood to spend over Thanksgiving / Black Friday, with Adobe reporting a record Back Friday spend and projecting a health y/y increase for Cyber Monday (online shopping). Retailer’s Dick’s, Kohl’s, Urban Outfitters and Abercrombie & Fitch earnings last week also buttressed Walmart’s comments from the prior week on a rosier view of the US consumer.

- WTI Crude held onto last week’s gain as OPEC+ confirmed to hold oil output policy steady for Q1 2026 while also agreeing capacity mechanism for members max output assessment.

- Global airline industry braces for scheduling and operational disruptions from an immediate software change announced by Airbus on Friday for a significant number of A320 aircraft following an incident that showed intense solar radiation may corrupt data that's key to flight controls. Some affected aircraft may need to be manually recalled above and beyond craft that can be updated via a software fix only.

- US Special Envoy Steve Witkoff visits Moscow this week in an attempt to finalize the US 28-Point Peace Plan as Rubio said Ukraine discussions in Florida on Sunday were “very productive”.

- Watching out for potential US ops expanding to some of land presence or force projection within Venezuela. Trump has already declared airspace above Venezuela ‘to be closed’.

- US equity FUTs -0.8% to -1.0% during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Mon Dec 1st (Mon night US Nov ISM Manufacturing PMI)- Tue Dec 2nd KR Nov CPI, JP Nov Consumer Confidence, (Tue eve EU Nov CPI).

- Wed Dec 3rd AU Q3 GDP, (Wed eve US Nov ISM Services PMI).

- Thu Dec 4th AU Oct Trade Balance.

- Fri Dec 5th JP Oct Household Spending, (Fri night US Sept Core PCE, Michigan Dec prelim Consumer Sent.

Holidays in Asia this week

- Fri Dec 5th Thailand.

Headlines/economic data

Australia/New Zealand

- ASX200 opens +0.1% at 8,623.

- Australia Nov Final Manufacturing PMI: 51.6 v 51.6 prelim (confirms move back into expansion after one month contraction).

- Australia Q3 Inventories Q/Q: -0.9% v 0.0%e.

- Australia Nov ANZ-Indeed Job Advertisements M/M: -0.8% v -1.9% prior (5th straight decline).

- Australia Nov Melbourne Institute Inflation M/M: 0.3% v 0.3% prior; Y/Y: 3.2% v 3.1% prior.

- Australia Nov Cotality Home Value M/M: 1.0% v 1.1% prior [overnight update].

- New Zealand Oct Building Permits M/M: -0.9% v 7.3% prior.

- New Zealand: Reminder that Riksbank’s First Dep Gov Anna Breman takes over as RBNZ Gov today (Dec 1st).

China/Hong Kong

- Hang Seng opens +0.3% at 25,945; Shanghai Composite opens +0.1% at 3,894.

- (CN) China Nov Manufacturing PMI (govt official) 49.2 V: 49.2E (8th month of contraction).

- China Nov ratingdog Manufacturing PMI: 49.9 V 50.5E (falls into contraction after 3 months expansion).

- (HK) Macau Nov (MOP) Casino Rev at 21.1B; Y/Y 14.4% v 10.5%e.

- China PBOC underlines 'tough' stance on virtual currencies, including stablecoins; cites meeting held on Fri -SCMP [update].

- China's State Planner (NDRC): To actively respond to firm's concerns and challenges - following meeting with private service sector [late Fri update].

- China reportedly plans to start commercial real estate REITs trial – press [late Fri update].

- China PBOC sets Yuan reference rate: 7.0759 v 7.0789 prior.

- China PBOC Open Market Operation (OMO): Injects CNY108B in 7-day Reverse Repos; Net drains CNY231B v drains CNY74B prior.

Japan

- Nikkei 225 opens +0.1% at 50,318.

- Japan Q3 capital spending (CAPEX) Y/Y: 2.9% V 6.0%E; Company Profits Y/Y: 19.7% v 3.7%e.

- Japan Nov Final PMI Manufacturing: 48.7 v 48.8 prelim (confirms 5th month of contraction).

- Japan BOJ Gov Ueda: Reiterates to raise rate if economic outlook is realized; A hike would be adjustment of degree of easing - meeting with business leaders in Nagoya.

- Japan 5-year JGB yield rises by 3.5bps to 1.345%, highest since Jun 2008.

- Japan 10-year JGB yield rises 4bps to 1.840%, highest since Jun 2008.

- BOJ Exec Dir Nakamura: Must be vigilant about possible overvaluation of AI related stocks - financial press.

- Japan Fin Min Katayama: Affirms is considering revising corporate governance code - financial press.

- Japan Fin Min said yen rapid decline clearly not driven by fundamentals - financial press [update].

- Japan top Trade negotiator Akazawa: Rules-based trade system is showing 'instability' -press.

- Bank of Japan (BOJ) announcement related to outright bond buying operations: Plans to buy bonds in Dec at same pace as m/m [late Fri update].

Korea

- Kospi opens +1.1% at 3,967

- South Korea Nov Trade Balance: $9.7B v $8.1Be- South Korea Nov PMI Manufacturing: 49.4 v 49.4 prior [2nd month of contraction].

- South Korea to review exporters' FX transactions and overseas investment on a 'regular basis' - govt statement.

- Kospi falls -4.4% in month of Nov, most in a month since Jan 2024 [late Fri update].

Other Asia

- Taiwan Trade Rep: Reiterates confident US will lower tariffs - financial press.

- Taiwan Nov PMI Manufacturing: 48.8 v 47.7 prior (9th month of contraction).

- Indonesia Nov PMI Manufacturing: 53.3 v 51.2 prior (fourth month of expansion)- Malaysia Nov PMI Manufacturing: 50.1 v 49.5 prior (moves into

expansion after 17 months of contraction).

- Philippines Nov PMI Manufacturing: 47.4 v 50.1 prior [Moves back into contraction after one month expansion].

- Thailand Nov PMI Manufacturing: 56.8 v 56.6 prior (7th month of expansion).

- Vietnam Nov PMI Manufacturing: 53.8 v 54.5 prior (5th month of expansion - update).

- Indonesia Oct Trade Balance: $2.4B v 3.7Be; Exports Y/Y: -2.3% v 3.4%e.

- Indonesia Nov CPI M/M: 0.2% v 0.2%e; Y/Y: 2.7% v 2.8%e- India Trade Sec Agrawal: Expect to have trade deal with US before end of year as most

issues are resolved [late Fri update].

- Taiwan revises economic forecasts: Raises 2025 GDP growth forecast from 4.5% to 7.4% [late Fri update].

North America

- (US) Follow up: National Economic Council's Hassett: 'Will be happy to serve" if Pres Trump picks him as US Fed Chairman - Fox News (update).

- (UR) US Sec of State Rubio: Had "very productive" session with Ukraine delegation in Florida (update).

- (US) President Trump said he knows who he will select as the next Fed Chair - press [update]- WorldACD Weekly Air Cargo Trends (week 46):

Spot prices edge higher in end-of-year build-up (update).

- (US) Adobe analytics: Consumers spent $6.4B online on Thanksgiving day; Expects record Black Friday spend $11.7B, +8.3% y/y; Forecasts spending on Cyber Monday at $14.2B, +6.3% y/y [weekend update].

- (VE) Trump: Declare the airspace above Venezuela to be closed - Truth. Social.

- (VE) Pres Trump: US will "very soon" start taking action to stop suspected Venezuelan drug traffickers on land [weekend update].

Europe

- (EU) ECB’s Nagel (Germany): ECB policy "broadly neutral" right now - financial press.

- EU said to tell Trump: You can’t pardon Putin for war crimes in Ukraine - Politico.

- (UK) Chancellor Reeves: Denies misleading public on latest budget - financial press (update).

- (IE) Ireland Nov PMI Manufacturing: 52.8 v 50.9 prior (11th month of expansion).

- (CH) Over 78% of Switzerland voters reject climate tax / inheritance tax on the wealthy in national Referendum (update).

- (UR) Ukraine Pres Zelenskiy: Names former Ukraine Ambassador to US Oksana Markarova as Reconstruction and Investment Adviser - post on X (update).

- (RU) India said to be pitching new arms deal with Russia during Pres Putin's visit to India - financial press (update).

- OPEC+ holds oil output policy steady for Q1 2026; Agrees capacity mechanism, as expected (update).

- Airbus: Will order immediate software change on significant number of A320 aircraft following incident that showed intense solar radiation may corrupt data that's key to flight controls of A320 family; This will lead to operational disruptions for passengers and customers.

- (DE) Germany passes 2026 budget; >€180B new debt to boost investment and defense [weekend update].

- (UR) Russia Pres Putin: Would be glad to choose Budapest as venue to hold Ukraine discussions with the US - comments at meeting with Hungary PM Orban [weekend update].

- (DE) German Chancellor Merz: Will ask EU for flexibility on combustion-engine ban; Should allow vehicles with dual propulsion and high efficiency combustion engines after 2035 [weekend update].

Levels as of 01:20 ET

- Nikkei 225 -1.9%, ASX 200 -0.6%; Hang Seng +0.4%; Shanghai Composite +0.3%; Kospi -0.3%.

- Equity S&P500 Futures -0.8%; Nasdaq100 -1.1%; DAX -0.6%; FTSE100 -0.3%.

- EUR 1.1590-1.116.16; JPY 155.40-156.15; AUD 0.6435-0.6558; NZD 0.5726--5745.

- Gold +0.5% at $4,276/oz; BTC -5.6% at $85,830; Crude Oil +0.9% at $59.64bbl; Copper +0.5% at $5.3225/lb.