Asia Market Update: Equity indices trade lower after US declines on Monday amid weaker US manufacturing data and various trade-related headlines; Nikkei Futures rise after prior session’s losses; Aussie yields rise as RBA affirmed prior policy measures are working way through the economy [no near term rate cut signal seen]


General Trend:

- Australian equity markets underperformed amid RBA decision, decliners include consumer staples and financials

- Hang Seng Futures erase losses as government plans 4th round of stimulus measures

- Decliners in Japan include Marine/Transportation and Iron/Steel companies, banks also drop

- Nintendo rises as Tencent is expected to give a Switch update on Dec 4th

- Fast Retailing is due to report its Nov sales after the Tokyo close

- Japan’s economic stimulus package may now total ¥25T, above the previously speculated ¥10T figure; government may decide on stimulus package later this week (Japanese press)

- Japan sells 10-year JGBs at lowest bid to cover since 2016

- Australia Q3 GDP data due for release on Wed (Dec 4th)

- US Treasury Sec Mnuchin to appear at US House committee hearing on Dec 5th (Thursday)


Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened -0.6%



- CTX.AU Rejects bid from Couche Tard, saying it undervalues the company

- ORE.AU Gives Q2 lithium carbonate pricing guidance: Expect lithium chemical pricing to recover in the mid-term, will meet current pricing in order to maintain market share


- Nikkei 225 opened -1.3%

- (JP) Japan Econ Min Nishimura: Economy is picking up but still at low level; To compile econ measures looking at consumption

- (JP) Bank of Japan (BOJ) Gov Kuroda: Losing trust in Japan's finances could spike yields; important to find balance between growth and fiscal discipline - speaking in Parliament

- (JP) Japan govt reportedly to select stimulus package worth ¥25T – Nikkei

- (JP) Japan Cabinet Sec Suga: Economic measures will not be based on a certain scale and will likely be compiled soon

- 4502.JP Files lawsuit against Mylan over breaching a license agreement stemming from the settlement of a patent-infringement case over Colcrys

- 4503.JP Astellas Pharma to acquire Audentes Therapeutics at $60/shr cash for $3.0B

- 7956.JP Reports 9M Net ¥9.6B v ¥12.2B y/y, Op ¥13.9B v 16.9B y/y, Rev ¥77.5B v ¥79.4B y/y; Cuts FY19/20 Net ¥11.8B v ¥15.77Be, Op ¥16.8B v ¥22.09Be (prior Net ¥14.3B, Op ¥20.0B)

- (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.042% v -0.099% prior, bid to cover 3.28x v 3.62x prior (lowest btc since Aug 2016)


- Kospi opened -0.8%

- (KR) SOUTH KOREA Q3 FINAL GDP Q/Q: 0.4% V 0.4%E; Y/Y:2.0% V 2.0%E

- (KR) South Korea to appoint new Premier Kim Jin-Pyo - South Korea Press

- (KR) North Korea Foreign Min: Dialog with the US has been nothing but a trick; will not continue talks with US, it is using talks for its upcoming elections

- 005930.KR US Sec of State Pompeo: Samsung is a legitimate substitute to China companies for building 5G networks across the EU - op-ed in Politico

China/Hong Kong

- Hang Seng opened -0.5%; Shanghai Composite opened -0.2%

- (CN) China has banned US military visits to Hong Kong due to human rights bill

- (HK) Hong Kong Chief Exec Lam: Will soon announce fourth round of relief measures; foresees fiscal deficit in Hong Kong over next 1-2 years

- (CN) China President Xi: Will work with Russia to counter 'western interference;' will ramp up coordination with Russia to deal with criticism of treatment of Muslim Chinese in western Xinjiang - speaking to Russian Security Council Sec Patrushev

- China Global Times releases list of possible counter measures China is considering taking against the US in response to Hong Kong Bill

- (CN) China soybean revitalization plan calling on farmers in Heilongjiang Province to increase soybean production in 2020 in order to reduce reliance on US amid the trade war - Chinese press

- (CN) China PBoC Open Market Operation (OMO): Skips for 10th consecutive session; Net drains CNY0B v CNY0B prior

- (CN) China PBOC sets Yuan Reference Rate: 7.0223 v 7.0262 prior

North America

- BOLD To be acquired by Astellas Pharma at $60/shr cash for $3.0B

- (CN) Bipartisan group of US Senators want Pres Trump to probe China social credit system as applied to foreign companies – SCMP

- (US) US State Dept Official: China has made false accusations of foreign interference in its sanctioning of US NGOs in Hong Kong


- (FR) US issues decision in response to France digital tax: USTR will take action against digital tax regimes that discriminate against US companies; proposes $2.4B tariffs on French goods; also considering probe on Austria, Turkey and Italy over digital tax

- (IE) Ireland Nov Consumer Confidence: 77.1 v 69.5 prior (fastest rise since 2015)


Levels as of 12:15ET

- Hang Seng -0.3%; Shanghai Composite 0.0%; Kospi -0.4%; Nikkei225 -0.7%; ASX 200 -2.2%

- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax +0.3%; FTSE100 +0.1%

- EUR 1.1083-1.1071; JPY 109.20-108.95; AUD 0.6844-0.6815; NZD 0.6513-0.6493

- Commodity Futures: Gold -0.2% at $1,466/oz; Crude Oil +0.4% at $56.16/brl; Copper +0.1% at $2.65/lb


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