USD continues to drop

Asia market update: USD continues to drop; CNH again supported by another stronger yuan fix; JGB yields declined ahead of bond auction results.

General trend

- Equity markets trade mixed.

- Chinese equities see modest gains after property news [China drafts white list of 50 developers for financing boost; Vanke, Seazen, and Longfor said to be on the list – press].

- USD/JPY extends drop.

- Precious metals rise.

- Aussie bond yields continued to move lower following RBA minutes.

- Japanese equities lag amid Yen strength.

- FOMC Minutes due later on Tues.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.3% at 7,077.

-Reserve Bank of Australia (RBA) Nov minutes: Noted cash rate remained below that in many other countries; Given these uncertainties, and the acknowledgement that inflation expectations remained broadly anchored, there was a credible case that a somewhat slower return of inflation to target did not warrant a policy response at this meeting.

-RBA Gov Bullock: Increasingly optimistic about the labor market - panel comments.

-Appen [APX.AU]: Confirms equity raise; the challenging external operating and macroeconomic conditions that were noted at the announcement of its 1H FY23 results have persisted into 2H FY23.

-Bluescope Steel [BSL.AU]: Guides 1H EBIT to to-end of $620-670M range given recent significant increase in US benchmark spreads.

-New Zealand Oct Trade Balance (NZD): -1.7B v -2.3B prior.

-New Zealand Oct Credit Card Spending Y/Y: -2.9% v +2.8% prior [first decline since 2021].

China/Hong Kong

-Hang Seng opens +0.9% at 17,932.

-Shanghai Composite opens +0.2% at 3,074.

-China PBOC sets Yuan reference rate: 7.1406 V 7.1612 PRIOR [strongest CNY fix since Aug 7th] (was expected to set yuan mid-point at 7.1677).

-China drafts white list of 50 developers for financing boost; Vanke, Seazen, and Longfor said to be on the list - press.

- China Premier Li Qiang: China asks govt officials to boost financial support to the economy; Financial regulation will be strengthened.

-(US) Treasury Sec Yellen: President made it clear to Xi that Taiwan policy has not changed - CNBC.

-(US) White House Kirby: Presidents Biden and Xi agreed to meet again, but no date has been specified.

-China PBOC Open Market Operation (OMO): Sells CNY319B in 7-day reverse repos.

-China's PBOC signs 3-year bilateral currency swap agreement with Saudi Arabia valued at CNY50B - press.

Japan

- Nikkei 225 opens +0.2% at 33,453.

- Japan sells ¥1.2T IN 20-year JGB bonds; AVG yield: 1.423% V 1.5530% prior; bid-to-cover: 3.54X V 2.97X prior.

- Japan's first digital securities trading said to start on Dec 25th - press.

Korea

- Kospi opens +0.5%.

-South Korea Nov 1-20th Exports Y/Y: +2.2% v 4.6% prior; Imports Y/Y: -6.2% v 0.6% prior.

- South Korea Oct PPI Y/Y: 0.8% v 1.4% prior.

-South Korea issues sail warning, follows North Korea notice of satellite launch - South Korea press.

Other Asia

-Taiwan Oct Export Orders Y/Y: -4.6% v -7.6%e (14th straight decline, 1st single-digits decline since Oct 2022); Sees November orders between +1.7-5.7% y/y (would be 1st Y/Y growth since Aug 2022); December outlook uncertain.

-Taiwan Semi: Considers 3rd chip plant in Japan - US press.

North America

-(US) Fed’s Barkin (2024 voter): Not a big time for offering forward guidance, will respond to data - Fox Business interview.

-*(US) Treasury $16b 20-year bond auction draws 4.780% V 4.499% prior, bid-to-cover 2.58 V 2.56 prior and 2.58 over last 8 auctions.

-OpenAI: Said to have approached Anthropic about a merger - US press.

-The Blackstone Group: To close multi-strategy fund - FT.

Europe

-(FR) Reportedly EU draft fiscal assessment places France on a fiscal watch list - press.

-(UK) BOE Gov Bailey: It is far too early to be thinking about rate cuts; Service inflation remains much too high.

-(IL) Hamas Chief: Has delivered response to Qatar officials, approaching reaching a truce agreement [**Reminder Nov 20th (IL) US and Qatar reportedly closer towards a deal over civilian hostages held by Hamas - press].

Levels as of 00:20 ET

- Nikkei 225, flat, ASX 200 +0.3% , Hang Seng +1.2%; Shanghai Composite +0.6% ; Kospi +1%.

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

- EUR 1.0965-1.0938 ; JPY 148.45-147.24 ; AUD 0.6586-0.6553 ;NZD 0.6076-0.6029.

- Gold +0.7% at $1,994/oz; Crude Oil -0.4% at $77.56/brl; Copper +0.2% at $3.8157/lb.