JGB yields rose on terrible bond auction – Equities track losses on Wall Street

Asia market update: JGB yields rose on terrible bond auction; Equities track losses on Wall St.; Yen rises; BOJ Gov commented on rates; CN trade data was mixed.

General trend

- Higher FX reserves seen in Japan and Indonesia.

- Oil FUTs rise after prior plunge.

- Taiwan Semi to report monthly sales on Fri.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 7,169.

- RBA: Sarah Hunter has been appointed as the Chief Economist and Assistant Governor (Economic) at the Reserve Bank of Australia; effective Jan 29th.

- Australia Oct Trade Balance (A$): 7.1B v 7.5Be; Exports to China +3% m/m.

- S&P: Expects 'soft landing' for the Australia economy, this supports the AAA sovereign rating.

- Woodside [WDS.AU]: Said to consider merger with Santos [STO.AU] - Australian press.

- New Zealand sells total NZ$500M vs. NZ$500M indicated in bonds.

- 5-year Kauri bond sale by International Finance Corp was supported by RBNZ liquidity announcement – Press.

- New Zealand Treasury said to signal 2035 and 2054 bond syndicates before Jun 30th.

China/Hong Kong

-.Hang Seng opens -0.5% at 16,376.

-.Shanghai Composite opens -0.1% at 2,965.

-.China Nov trade balance: $68.4B V $54.9BE; exports Y/Y: +0.5% v 0.0%e [first rise since Apr]; Imports Y/Y: -0.6% v 3.9%e.

-.China college students set to break graduation record at 11.8M in 2024, rekindling fears on job market pressures - HK press.

-.China investors 'step up' buying of ETFs - Shanghai Securities News.

-.Foreign investors said to have increased China bond holdings in Nov by CNY250B; cites data from the PBOC - Shanghai Securities News.

-.China PCA: Nov Retail Passenger Vehicle Sales Y/Y: 25.0% v 10.2% prior; M/M +1.0%.

-.Hong Kong Monetary Authority (HKMA): lent HK$3.5B through the discount window on Wed [Dec 6th].

Japan

- Nikkei 225 opens -0.8% at 33,165.

- Bank of Japan (BOJ) Gov Ueda: Challenging situation remains; Options include raising rate applied to financial institutions' reserves at the BOJ, or revert to policy rate targeting overnight call rate; Whether to keep interest rate at zero or move it up to 0.1% will depend on economic and financial developments.

- Japan sells ¥900B in 30-year JGB bnds; AVG yield: 1.6230% V 1.7410% prior, bid-to-cover: 2.62x V 3.60X prior (lowest BTC since 2015).

- Japan MOF: Meeting with primary dealers suggested that 20-year JGB sales should be reduced.

- Japan Nov FX Reserves: $1.27T v $1.24T prior [highest since Aug 2022].

- Japan releases weekly flows data [period ended Dec 1st]: Foreign buying of Japan equities: -¥358.3B v +¥4.2B prior; Japan buying of foreign bonds: +¥64.5B v -¥84.5B prior; Foreign buying of Japan bonds: -¥710.4B v +¥864.1B prior.

- Japan Nov Tokyo Avg Office Vacancies: 6.0% v 6.1% prior.

Korea

- Kospi opens flat at 2,493.

Other Asia

- Indonesia Nov Foreign Reserves: $138.1B v $133.1B prior [multi-month high].

-Thailand considers tightening rules related to Baht-denominated bond sales by foreigners - Press.

North America

-(US) Nov ADP employment change: +103K V +130KE; Job-stayers pay growth lowest since Sept 2021; Sees more moderate hiring and wage growth in 2024.

-WTI crude futures dip below $70/bbl for first time since early July [from Dec 6th].

Europe

- (EU) Generative AI deal brings EU closer to passing landmark AI bill - EU press.

- China President Xi: China and EU should jointly tackle global challenges - China press.

- Iran Foreign Min: Coming days will be 'terrible' for Israel.

Levels as of 00:20 ET

- Nikkei 225, -1.9%, ASX 200 -0.1% , Hang Seng -1%; Shanghai Composite flat ; Kospi -0.1%.

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

- EUR 1.0772-1.0758 ; JPY 147.38-146.64 ; AUD 0.6558-0.6525 ;NZD 0.6178-0.6112.

- Gold -0.3% at $2,042/oz; Crude Oil +0.6% at $/brl; Copper +0.7% at $3.7572/lb.