USD trades broadly weaker

Asia Market Update: Asia rises at the start of the new month; USD trades broadly weaker; China manufacturing PMI hits 10-yr high.

General Trend

- Topix Securities, Real Estate, Marine Transportation, Electric Appliances and Insurance indices are among the gainers in Japan; Banks and Air Transportation firms lag

- Australian Consumer and Financial firms rebound from the declines seen on Mon; Energy index lags

- Australian lithium firms announce merger (Pilbara Minerals and Altura)

- Financials and Consumer firms were among the early gainers in Shanghai

- Chinese Corp Debt: Yongcheng Coal said to repay interest on certain bonds; Tianqi Lithium receives payment extension; FT commented on Huachen Auto; Wintime Energy was also in the headlines

- Financials rise in HK, Tech firms trade generally weaker; Shares of Alibaba have remained heavy; CNOOC extends decline amid regulatory uncertainty; Sino Biopharmaceutical weighed down by financial results

- PBOC Gov warned against the monetization of gov’t debt

- FOMC member Kaplan commented on the Dec Fed meeting

- Little news seen in the RBA’s statement

- Australia Q3 GDP data due on Wed (Dec 2nd)

- RBA Gov Lowe is due to appear before the Australian House of Representatives Standing Committee on Economics on Dec 2nd [at 11 pm GMT]

- RBNZ Gov also due to speak on Wed

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened +0.2%

- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%, AS EXPECTED; MAINTAINS A$100B BOND BUYING PROGRAM

- (AU) Australia Nov Final PMI Manufacturing: 55.8 v 56.1 prelim (highest since Dec 2017, 6th consecutive month of expansion)

- (AU) AUSTRALIA OCT BUILDING APPROVALS M/M: +3.8% V -3.0%E

- (AU) Australia total payroll jobs change between Oct 31st and Nov 14th: +0.1% v +0.5% prior; Weekly total wages +0.8% v +0.1% prior

Japan

- Nikkei 225 opened +0.7%

- (JP) JAPAN OCT JOBLESS RATE: 3.1% V 3.1%E; Job-To-Applicant Ratio: 1.04 v 1.03 prior (1st increase since Apr 2019)

- (JP) Japan Chief Cabinet Sec Kato: PM Suga has instructed Japan Ministers to map out a 5-year infrastructure plan for Japan for total ~¥5.0T

- (JP) JAPAN Q3 CAPITAL SPENDING (CAPEX) Y/Y: -10.6% V -11.3% PRIOR; CAPITAL SPENDING EX-SOFTWARE: -11.6% V -10.4% PRIOR

- (JP) Japan Nov Final PMI Manufacturing: 49.0 v 48.3 prelim (highest reading since Aug 2019)

- 9437.JP Reportedly plans to overhaul pricing structure of mainstream service and cut prices – Nikkei

- (JP) Japan Econ Min Nishimura: Will urge business lobby to cooperate on telework; Number of furloughed workers are closer to in an average year

- (JP) Japan Fin Min Aso: Japan Financial System overall is stable, Retaining sense of caution on unclear economic outlook

- (JP) Japan MoF sells ¥2.6T v ¥2.6T indicated in 0.1% 10-year JGBs; avg yield 0.019% v 0.046% prior; bid to cover: 3.42x v 4.13x prior

Korea

- Kospi opened +0.9%

- (KR) SOUTH KOREA Q3 FINAL GDP Q/Q: 2.1% V 1.9% PRELIM (fastest expansion since Q3 2009, 1st expansion in 3 quarters) ; Y/Y: -1.1% V -1.3% PRELIM (confirms end of technical recession); Exports q/q: +16.0% v -16.1% prior (highest since 1986)

- (KR) South Korea President Moon: Revised GDP Growth show economic recovery; record run for the Kospi index shows confidence in the domestic economy

- South Korea Ruling and Opposition parties said to agree to 2021 budget; KRW2.0T in bond sales - Yonhap

- (KR) South Korea to appeal World Trade Organization's ruling that Korea partially violated anti-dumping rules when imposing tariffs on Japanese stainless steel bars

- (KR) South Korea Foreign Min Kang calls for active efforts to develop an alliance with Biden administration and advance the Korean Peninsula peace process in cooperation with the new US president – Yonhap

- (KR) South Korea Nov PMI Manufacturing: 52.9 v 51.2 prior (highest level since Feb 2011)

China/Hong Kong

- Hang Seng opened +0.3%; Shanghai Composite opened -0.1%

- (CN) CHINA NOV CAIXIN PMI MANUFACTURING: 54.9 V 53.5E (10 year high, 7th consecutive month of expansion)

- (CN) China PBoC Gov Yi Gang Article: Regulators and local governments should be held responsible and punished for failing to prevent major financial risks - Shanghai Securities News

- (CN) China export control law that manages sensitive technology, military goods, dual use items that have both civil and military uses, and a licence requirement for anyone who intends to export or re-export these goods goes into effect today - China press

- China PBoC Open Market Operation (OMO): Injects CNY20B in 7-day reverse repos v Injects CNY150B in 7-day reverse repos prior; Net drain CNY50B v Net inject CNY110B prior

- China PBOC sets Yuan reference rate: 6.5921 v 6.5782 prior

- (HK) Macau Nov Casino Rev (MOP): 6.8B v 7.3B prior; Y/Y: -70.5% v -69.8%e

Other

- OPEC+ meeting reportedly rescheduled until Dec 3rd as more talks are said to be needed (had been planned for tomorrow)

North America

- TSLA S&P announced details on addition of TSLA to the S&P500 index before the open on Dec 21st at full float adjusted market cap weight (will not break it into 2 tranches)

- XOM Affirms FY21 capex $16-19B; guides $20-25B capex annually through 2025; to prioritize capital investments on high-value assets; cutting global workforce 15% by end of 2021; sees doubling earnings by 2027

- (US) Fed's Kaplan (FOMC voter): Expects strong economic growth in the second half of next year once newly developed COVID vaccines get rolled out widely, with cases surging now see "very difficult" next 3-6 months

- (US) According to Adobe Analytics Cyber Monday sales forecast to $10.8-11.4B (prior $10.8B)

Europe

- (UK) UK Govt expected to publish law that will repeal the Fixed-term Parliaments Act, which would give PM Johnson the power to decide timing of future elections - UK press

- (IE) Ireland PM Martin: We are now really in endgame if a Brexit deal is to be arrived at this week, there is a landing zone for an agreement and there are option to conclude the deal - Press

Levels as of 12:15ET (05:15GMT)

- Hang Seng +1.0%; Shanghai Composite +1.3%; Kospi +1.7%; Nikkei225 +1.5%; ASX 200 +1.1%

- Equity Futures: S&P500 +0.9%; Nasdaq100 +0.8%, Dax +0.7%; FTSE100 +0.6%

- EUR 1.1961-1.1925; JPY 104.47-104.25; AUD 0.7371-0.7341; NZD 0.7043-0.7010

- Commodity Futures: Gold +0.4% at $1,787/oz; Crude Oil -0.7% at $45.04/brl; Copper +0.6% at $3.47/lb