Hawkish CBs, more rate decisions ahead [including BoE and Taiwan]

General trend

- Hawkish dissent seen at the BOJ, US Fed also viewed as hawkish.

- China PBOC-backed Financial News: Reiterates monetary policy to remain accommodative; accommodative policy is flexible, which can be 'loose or tight' when appropriate.

- China banks raise mortgage rates for the first time since 2021 amid narrowing interest margins – US financial press.

- China PBOC to set loan prime rates on Fri [**Reminder Dec 9th, China changed monetary policy stance from ‘prudent’ to ‘moderately loose’].

- USD/JPY rose above ¥155 post BOJ decision.

- USD traded generally higher after the Fed.

- JGB yields remain higher, but pare rise.

- No forward guidance seen in the BOJ statement; Ueda to hold press conference at 630 GMT.

- Terrible NZ GDP figures seen, economy fell into recession.

- Asian equities track losses on Wall St.

- Bitcoin declines below $100K.

- FedEx due to report Q2 earnings on Dec 19th; Micron declined amid guidance.

- Upcoming Nike results also in focus.

- Japan Nov CPI figures are due on Fri [reminder from Nov 29th: JAPAN NOV TOKYO CPI Y/Y: 2.6% V 2.2%E; CPI (EX-FRESH FOOD) Y/Y: 2.2% V 2.0%E (highest core since Aug at 2.4%) ].

Headlines/economic data

Australia/New Zealand

-ASX 200 opens -0.3% at 8,282.

- Australia Dec Consumer Inflation Expectation: 4.2% v 3.8% prior [highest since Sept].

-Australia Debt Agency Issuance Program Update: issuance of Treasury Bonds in 2024-25 has been revised to around A$95B; to issue a new March 2036 Treasury Bond by 31 March 2025 (by syndication and subject to market conditions) [reminder: May 15th Australia debt management agency (AOFM) saw FY24-25 Treasury bond issuance ~A$90B].

-Syrah Resources [SYR.AU]: Files petition to investigate Chinese anode export prices; Syrah, together with several North American graphite companies, submitted a petition to US Department of Commerce and International Trade Commission to investigate "dumping" of certain graphite products from China in the United States at unsustainable and unfair prices.

-NEW ZEALAND Q3 GDP Q/Q: -1.0% V -0.2%E; Y/Y: -1.5% V -0.4%E (NZ officially falls into recession).

-New Zealand Dec ANZ Business Confidence: 62.3 v 64.9 prior.

- Westpac: Now expects the RBNZ to cut the cash rate to 3.25% trough in May [follows weaker NZ GDP figures].

China/Hong Kong

-Hang Seng opens -1.3% at 19,610.

-Shanghai Composite opens -0.8% at 3,355.

- China PBOC-backed Financial News: Reiterates monetary policy to remain accommodative; accommodative policy is flexible, which can be 'loose or tight' when appropriate.

-China PBOC sets Yuan reference rate: 7.1911 v 7.1880 prior.

-China PBOC Open Market Operation (OMO): Injects CNY80.6B in 7-day reverse repos; Net injects CNY14.5B v injects CNY309B prior.

- China Nov Swift Global Payments (CNY): 3.9% v 2.9% prior.

-Hong Kong Monetary Authority (HKMA) cuts base rate 25bps to 4.75% from 5% [**Note:The HKD is pegged to the US dollar with the current trading band between HK$7.75-7.85].

-China Securities Journal: >3,900 companies listed in China have announced CNY2.35T ($323B) in dividends this year [record high].

-CATL [300750.CN]: Said to consider IPO in Hong Kong to raise at least $5.0B; the IPO could occur by as early as 2025 - US financial press.

-Ant Group says it currently has no listing plans [comments on online rumor].

Japan

-BANK OF JAPAN (BOJ) LEAVES TARGET RATE UNCHANGED AT 0.25%; AS EXPECTED; Tamura (sole dissenter) proposed raising rates to 0.5%.

- BOJ releases results of broad policy review: The Bank should not exclude at this point any specific measures when considering the future conduct of monetary policy. Looking ahead, in considering the implementation of each measure, it will be necessary for the Bank to design policy measures that can exert positive effects while minimizing side effects as much as possible, taking account of the findings of the Review.

-Nikkei 225 opens -1.4% at 38,522.

-OIS market pricing in 16% chance of a 25bps rate increase by the BOJ today – financial press [update]; The Japan money market broker Ueda Yagi’s survey sees 9% chance of a rate hike.; For the Jan BOJ meeting, OIS is pricing in a 67% chance of a rate hike.

-Japan releases weekly flows data [period ended Dec 6th]: Foreign buying of Japan equities: +¥482.3B v -¥607.7B prior; Japan buying of foreign bonds: -¥640.8B v +¥922.4B prior; Foreign buying of Japan bonds [long-term debt securities]: ¥1.0T v ¥176.1B prior.

- Nissan: Follow Up: Hon Hai Jun Seki in talks with Nissan shareholder Renault – Press [**Reminder Dec 18th: Reportedly Honda Motor and Nissan Motor entered into merger talks in order to rule out the risk of an acquisition by Taiwan's Hon Hai Precision Industry; Hon Hai (Foxconn) had made a buyout proposal during the spring of 2024 – Nikkei].

- Japan Nov Tokyo Condo Sales Y/Y: -18.7% v +23.4% prior.

Korea

- Kospi opens -2.3% at 2,426.

-South Korea to delay adopting stress buffer capital rule; Will prepare FX stability and liquidity measures in 2025 policy plan.

- Bank of Korea (BOK) Gov Rhee: Not at stage to feel safe about market stability.

-South Korea National Pension to discuss FX hedging on Dec 19th [Thurs] - Local press.

- South Korea National Pension Service (NPS): Extends period for strategic FX hedging to 2025; confirms to extend FX swap line with the Bank of Korea (BOK); the amount of the FX swap line will be expanded.

-South Korea Fin Reg: Asks banks to flexibly adjust FX transaction and loan maturity for companies.

- South Korea Constitutional Court to hold first council on Thursday [Dec 19th] – Yonhap.

-South Korea acting President rejects 6 ‘contentious’ bills – Yonhap.

North America

-*(US) FOMC CUTS TARGET RANGE BY 25BPS TO 4.25-4.50%; AS EXPECTED; POLICY STATEMENT LITTLE CHANGED FROM NOVEMBER; NOW SEE INFLATION HITTING 2% IN 2027 VS 2026; Reverse repo rate cut from 4.55% to 4.25%; Vote to cut was 11-1; Hammack was dissenter (does not vote in 2025); Fed projections imply 50bps of rate cuts in 2025, another 50bps in 2026.

-Fed Chair Powell: Today was a closer call, but it was the right call; Slower pace of rate cuts reflects expectation of higher inflation - press conf Q&A; We're significantly closer to neutral.

-US Pres Elect Trump: Calls on Democrats to terminate or extend debt ceiling - Truth Social post in response to Stopgap bill.

- (US) Scalise [House Majority Leader (R-LA)]: GOP has still not come up with a ‘Plan B’, ‘lots’ of conversations but no new agreement; the current stopgap bill is 'officially dead', no new deal yet – CNN.

-Micron [MU]: Reports Q1 $1.79 v $1.75e, Rev $8.71B v $8.71Be; Guides well below consensus; Anticipate return to growth in H2.

- Interpublic [IPG]: Reportedly House Judiciary Committee launched probe into merger of Omnicom and Interpublic over ties to anti-conservative cartel - NY Post.

- Apple [AAPL]: Said to be in talks with Tencent and Bytedance to integrate their AI features into iPhones sold in China - financial press.

-(CA) Ontario MP: PM Trudeau is facing more calls to resign; ~50 elected Liberals now want Trudeau to leave.

-CAD declines to >4-year low amid general US dollar strength.

Europe

-Israel Military: Sirens sounded in multiple areas in Central Israel.

-Volkswagen: Follow Up: Said to be 'near' agreement with unions that would keep plants in Germany open - US financial press.

Levels as of 01:20 ET

- Nikkei 225, -0.5%, ASX 200 -1.8% , Hang Seng -0.8%; Shanghai Composite -0.4% ; Kospi -1.5%.

- S&P500 Futures: +0.1%; Nasdaq100 flat, Dax -0.1%; FTSE100 flat.

- EUR 1.0390-1.0347 ; JPY 155.44-154.43 ; AUD 0.6234-0.6199 ;NZD 0.5663-0.5607.

- Gold -1.2% at $2,622/oz; Crude Oil -1.5% at $69.51/brl; Copper -0.1% at $4.0873/lb.