Markets quiet with holidays in Japan and US

Asia Market Update: Markets quiet with holidays in Japan and US, HK holds about 30,000; PBOC sets CNY stronger

Headlines/Economic Data

- General Themes: Asian equity markets trade mixed amid thin trading conditions on US and Japan holidays

-Energy and Materials sectors add on to Wednesday’s gains

- Looking ahead: US markets closed for Thanksgiving holiday

Japan

-Tokyo Stock Exchange closed in observance of Labour Thanksgiving Day

- Nikkei 225 Futures -0.2%

-USD/JPY consolidates losses seen following FOMC minutes

-(JP) Japan metalworkers to push for a ¥3,000 ($26.90) minimum increase in monthly base pay for the 5th straight year – Nikkei

- (JP) Japan said to be ready to start debate on Constitution reform - financial press

- Looking Ahead: Japan prelim Nov Man PMI due to be released on Friday

Korea

-Kospi opened flat and has since moved lower: LG Electronics -1.4%, Samsung Electronics -1.1%, Hynix -2% (tracks declines in US chipmakers)

-Korean Won (KRW) opened at over 2 year highs versus US dollar; has since pared gains

- South Korea FX Official: Some offshore speculators are failing to notice government's willingness to stabilize financial markets

-South Korea Q3 Short Term External Debt: $119.8B v $117.3B prior; Debt/FX reserves ratio 31.1% v 30.8% prior
Geopolitics: North Korea Foreign Ministry: US designation deemed a severe provocation (responds to move by US to name the country a state sponsor of terrorism)

-South Korea and China to cooperate on stopping North Korea provocation – South Korea Press

China/Hong Kong

-Hang Seng opened +0.1%; Materials Index +3% (Chalco +7%)

-Shanghai Composite opened -0.2% and has extended losses led by appliance makers and wine cos; while banks outperform even with continued talk on tighter regulations; Small-cap Chinext index -1.5%

-Automakers trade mixed: China may reduce EV subsidies by 20% in 2018 versus originally plan for 2019 – Chinese Press

- Nexgo [300130.CN] cancels planned micro loan unit following suspension of approval by China government – US financial press

- (CN) China Banking Regulatory Commission (CBRC) official calling for stricter monetary management - Chinese press

-(CN) S&P: China's wealth product rules are game changing and could be a break to credit

-(CN) China planning to set up a more than CNY100B fund for support to mixed-ownership reform of State Owned Enterprises (SOE) - Chinese press

- (CN) PBOC Deputy Gov Fan Yife; Financing difficulties remain for some small technology companies - China press

-Shorter-term Offshore yuan money market rates ease after Wednesday’s rise: (HK) Offshore yuan Overnight HIBOR rate -3.22ppts to 2.75967%; 1-week HIBOR -47bps to 4.52286

- (CN) PBoC OMO: Injects CNY270B v CNY190B injected in 7,14 and 63-day reverse repos prior; Net injects CNY100B v CNY0B prior

-Offshore Yuan (CNH) +0.1%

-(CN) PBoC sets yuan reference rate at 6.6021 v 6.6290 prior (strongest level since Oct 18th)

Australia/New Zealand

-S&P ASX 200 opened -0.1%, closed flat; Utilities index -0.9% (follow-through selling) Consumer Discretionary Index -0.6%; Resources Index +0.8%

- TAP.AU Issues letter to shareholder regarding Risco – filing; -20%

- ASX 200 Financials Index -0.4%: Australia Treasurer Morrison summoned the chairs of the big banks to a series of urgent meetings; banks have said they will hold their opposition to in inquiry - Australian press

-NZX 50 closes flat

- Aussie and Kiwi slightly lower during session

-(NZ) NEW ZEALAND Q3 RETAIL SALES (EX-INFLATION) Q/Q: 0.2% V 0.1%E (smallest gain since Q2 2015); Y/Y: 5.4% V 5.1%E

- (AU) JPMorgan: In 2018, the Australia/US 10-year bond yield spread may turn negative

- (AU) Moody’s: Sees stable outlook for corporates in Australia in 2018; Sees moderate levels of debt maturities over the next 18 months

- (AU) Australia sells A$500M in Feb 2018 notes, avg yield 1.7244%, bid to cover 4.46x

- (AU) Australia sells A$394.5M in RMBS at auction (resumed as of today)

-(NZ) New Zealand sells NZ$150M in 3.5% 2033 bonds, avg yield 3.1338%, implied bid to cover 2.48x

-(NZ) New Zealand Former Labour Finance Minister will head group to consider changes that would improve the structure, fairness and balance of the tax system

- (NZ) New Zealand immigration minister wants to tighten work visa rules - NZ press

-Looking ahead: New Zealand Oct Trade Balance due for release on Friday.

- Australia to sell A$500M in 2.00% Dec 2021 bonds

 

Other Asia

Singapore

-Straits Times Index opened +0.3%; has since pared gains

- Q3 GDP revised higher: SINGAPORE Q3 FINAL GDP Q/Q: 8.8% V 7.8%E; Y/Y: 5.2% V 5.0%E

- Singapore sees 2018 GDP growth slowing to 1.5-3.5%, while 3.0-3.5% is expected for 2017

- Singapore Central Bank (MAS) official: 2017 monetary policy remains appropriate

- SINGAPORE OCT CPI M/M: -0.3% V -0.1%E; Y/Y: 0.4% V 0.5%E; Core CPI Y/Y: 1.5% v 1.5%e

North America

- US equities closed mostly lower: Dow -0.3%, SP500 -0.1%, Nasdaq +0.1%, Russell2000 -0.1%

-S&P500 Financial Sector -0.5%

- (US) FOMC MINUTES FROM NOV 1 MEETING: MANY FED POLICYMAKERS SAW NEAR-TERM RATE HIKE AS WARRANTED; SOME OPPOSED NEAR-TERM HIKE DUE TO WEAK INFLATION; A few Fed officials concerned hikes would undermine credibility; Several on Fed concerned about low inflation expectations

- US Treasury yields ended lower amid release of FOMC minutes

-(US) DOE CRUDE: -1.9M V -1.5ME

-M&A: 21st Century Fox (FOXA) said to remain engaged in prelim talks with suitors including Comcast and Disney; Broadcom (BRCM) reportedly considering higher offer for Qualcomm (QCOM) by offering more shares (press); Davita (DVA) said to consider sale of medical group unit which might be valued at ~$4B (press);

-Looking Ahead: NYSE is closed on Thursday in observance of Thanksgiving holiday. An early close (at 13:00 GMT) is seen for Friday;

-Canada Sept Retail Sales to be released later today

Europe

-(DE) Germany Oct Tax Rev +0.5% y/y, suggesting continued economic expansion – Ministry

-(EU) EU's Tusk: EU needs to discuss how to move forward with a banking union; Euro summit on Euro zone future will go ahead as planned

- (DK) Denmark PM Rasmussen’s Liberal Party suffered losses in local elections – financial press

- Looking ahead: Second readings of Q3 GDP expected out of Germany and the UK; European Nov prelim PMI data; ECB Account of Monetary Policy Meeting

 

Levels as of 01:00ET

- Nikkei closed, Hang Seng +0.1%; Shanghai Composite -1.1%; ASX200 +0.6%, Kospi +0.0%

- Equity Futures: S&P500 +0.0%; Nasdaq100 +0.0%, Dax -1.5%; FTSE100 +0.0%

- EUR 1.1838-1.1813; JPY 111.38-111.07; AUD 0.7623-0.7604;NZD 0.6884-0.6867

- Dec Gold -0.2% at $1,289/oz; Jan Crude Oil -0.2% at $57.88/brl; Dec Copper +0.0% at $3.14/lb