Positive risk appetite generally seen in Asia, commodity currencies rise

Asia market update: Positive risk appetite generally seen in Asia, Commodity currencies rise; UST yields dropped on JOLTS data; US ADP data in focus.

General trend

- Shanghai Composite lagged during early trading.

- S&P and Fitch affirm China.

- China trade balance is due on Thurs.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.2% at 7,075.

- Australia Q3 GDP Q/Q: 0.2% V 0.5%E; Y/Y: 2.1% V 1.9%E.

- Australia sells A$700M vs. A$700M indicated in 3.75% Apr 2037 bonds; Avg Yield: 4.3981% v 3.3974% prior; bid-to-cover: 2.91x v 2.22x prior.

- (NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: +1.6%.

China/Hong Kong

- Hang Seng opens flat at 16,311.

- Shanghai Composite opens -0.2% at 2,966.

- China Finance Ministry (MOF) issues guidelines on pension fund investment rules, issues draft rules on the management of domestic investments by social security fund; The maximum investment ratio of the social security fund in stocks and equity assets can reach 40%.

- China state-owned banks said to again sell US dollars in order to support the Yuan - Chinese press.

- Moody's affirms China sovereign rating at 'a1' rating; changes outlook to negative [from Dec 5th].

- S&P affirms China sovereign rating and outlook.

- Fitch affirms China a+ sovereign rating and stable outlook.

- China Ministry of Finance (MOF): Expects Q4 domestic economy to keep positive trend; Local debt scale gradually declines, risks mitigated.

- China Finance Ministry (MOF) to issue CNY10.0B in yuan-denominated bonds in Hong Kong on Tues (Dec 12th).

- NDRC [China State Planner]: Issues draft rules to set up coal production reserve system by 2027; Has scope for macro-policy adjustments.

Japan

-Nikkei 225 opens +0.5% at 32,928.

- Bank of Japan (BOJ) Himino: Reiterates will continue with easing patiently.

- In Nov, Japan regional banks asked the BOJ Gov to end negative interest rate; the regional banks requested a review of the negative rate policy - US financial press.

-Japan considers ¥50K per child handout to low-income families - Japanese press.

Korea

- Kospi opens +0.4% at 2,503.

- South Korea said to detect activity at North Korea submarine shipyard - South Korea press.
Amazon: Twitch plans to shut down in South Korea; notes high network costs - Press.

Other Asia

- Foxconn: Reports Nov (NT$) Rev 650.0B +18.0% y/y, -12.3% m/m; Sees Q4 Rev to be better than expected [from Dec 5th].

-Taiwan tightens protection on chip and other core technologies; Defines its defense, semiconductor and space industries as those requiring urgent protection - Nikkei.

- Malaysia 3-month interbank rate hits the highest since 2016.

North America

- (US) Oct JOLTS job openings: 8.733M V 9.300ME (lowest since May 2021).

- (US) Nov ISM services index: 52.7 V 52.3E.

- US Treasury Sec Yellen: US growth will come down; Not seeing weakness on the spending side of the economy.

- Amazon: Plans to cut seller fees for certain clothing to 5% from 17%; relates to clothing <$15 - US financial press.

Europe

- (EU) ECB's Schnabel (hawk, Germany): Can take hikes off the table; Policymakers should not guide for rates to remain steady through mid-2024 [from Dec 5th].

- EU finance ministers said to be discussing debt reduction targets as part of fiscal overhaul which would include fiscal buffer of 1.5%/GDP - press.

- (UK) Reportedly EU will propose a 3-year delay to tariffs on EV trade with UK - press.

Levels as of 00:20 ET

- Nikkei 225, +1.9%, ASX 200 +1.7% , Hang Seng +1.1%; Shanghai Composite flat ; Kospi +0.4%.

- Equity S&P500 Futures: +0.3%; Nasdaq100 +0.5%, Dax +0.4%; FTSE100 +0.5%.

- EUR 1.0799-1.0787 ; JPY 147.39-147.04 ; AUD 0.6597-0.6549 ;NZD 0.6172-0.6126.

- Gold +0.2% at $2,039/oz; Crude Oil flat at $72.30/brl; Copper +0.5% at $3.8053/lb.