General Trend:
- Property shares outperform in China and Hong Kong, add on to recent gains amid yuan strength
- Chinese steel makers track strength in metals prices, trade developments eyed
- Hong Kong listed UK-banks gain, PM May survived confidence vote
- Trade sensitive Marine/Transportation and Iron/Steel sectors gain in Japan; Softbank declines
- Australia’s telecom index drops over 3%; Competition regulator raised concerns about the TPG Telecom/Hutchison merger
- Chipmakers in South Korea lag the overall market
- NZ cuts growth and operating surplus forecasts, muted impact on the Kiwi
- China bond yields track Treasuries, gains in equity markets
- Diplomatic issues between China and Canada continue to linger with a second Canadian citizen being questioned and unreachable by authorities
- China said to be open to revisions to its ‘Made in China 2025’ plan
- China Commerce Ministry expected to hold weekly press conference later today
- Looking Ahead: China Nov data due for release on Friday (including industrial production), BoJ to release quarterly Tankan survey
- ECB and Philippines Central Bank expected to hold rate decisions on Thursday
Headlines/Economic Data
Japan
- Nikkei 225 opened +0.7%
- EU Parliament lawmakers approve start of Japan free trade agreement
- (JP) Japan Chief Cabinet Sec Suga: To closely watch UK developments after PM May confidence vote; no plans to ask companies to avoid certain devices
- (JP) Japan Nov Tokyo Avg office Vacancies y/y: 1.98% v 2.2% prior
- 6302.JP Silchester International raises stake to 8.15% (prior 7.08%)
- 7201.JP Said to be planning to repatriate $1.1B from China as it gathers cash amid tensions with Renault – press
- (JP) Japan MOF sells ¥2.0T v ¥2.0T indicated in 0.10% 5-yr JGB: avg yield: -0.1120% v -0.0870% prior, bid to cover: 3.84x v 3.89x prior
Korea
- Kospi opened +0.2%
- (KR) South Korea Nov Import Price Index M/M: -4.6% v 1.5% prior (fastest decline in ~4-yrs); Y/Y: 6.0% v 10.7% prior
- (KR) North Korea nuclear test site may not have been completely abandoned according to satellite images, buildings and roads remain intact – Yonhap citing report from US think tank 38 North
China/Hong Kong
- Hang Seng opened +0.9%, Shanghai Composite +0.2%
- (CN) China said to have purchased up to 2M tons of US soybeans – US financial press
- (CN) China PBoC Open Market Operation (OMO): Skips operation for the 35th straight session
- (CN) China PBoC sets yuan reference rate: 6.8769 v 6.9064 prior
- (CN) China FX Regulator SAFE official: Yuan to keep basically stable
- (CN) China Vice President Wang Qishan: Needs to be a stronger confidence and more concrete efforts to write a “new chapter” of reform and opening up in the new era – Xinhua
- (CN) Peking University professor Yan Se: Although external uncertainties are abound and downside risks have emerged, China’s policy makers have many economic levers at hand to deal with challenges – Xinhua
- (HK) The plan related to the HK/China ETF Connect said to be canceled amid certain technical issues – HK Press
- (CN) China reportedly preparing to replace “Made in China 2025” plan; revised plan would downplay China’s efforts to expand its manufacturing dominance
- (CN) China said now hold Central Economic Work Conference meeting Dec 19-21 (prior Dec 14th) – US financial press
Australia/New Zealand
- ASX 200 opened flat
- FMS.AU To delist from ASX, subject to shareholder approval
- TPM.AU ACCC expresses preliminary competition concerns about proposed merger with Vodafone Hutchison Australia
- (NZ) New Zealand Treasury issues Half-Year Economic and Fiscal Update: NZ$8.0B bond issuance unchanged until 2022, cut 2018/19 GDP growth forecast; lowers operating surplus forecasts
- (AU) Australia Dec Consumer Inflation Expectation: 4.0% v 3.6% prior
North America
- (CA) Canada Foreign Min Freeland: Another Canada citizen, Spavor, got in touch with Canadian authorities to say Chinese authorities were asking him questions and Canada has not been able to make contact with him since
- (CA) Follow Up: Canada businessman Michael Spavor is being investigated in China for suspicion of harming China’s national security – Chinese Press
- ZTS Authorizes $2B share repurchase program (5% of market cap); Raises Quarterly dividend 30.2% to $0.164 from $0.126 (indicated yield 0.72%)
- UA Raises bottom end FY18 $0.21-0.22 v $0.22e (prior $0.19-0.22), gross margin flat (prior flat to down slightly); Initial FY19 $0.31-0.33 v $0.35e, rev +3-4%
Europe
- (UK) PM May: pleased to receive backing of colleagues in confidence vote – statement after confidence vote
- (UK) Brexiteers count 86 Tory members as voted that they have no confidence in PM May leadership (far short of number needed to oust May) – UK’s Telegraph
- (UK) EU expected to reject UK PM May request at EU summit for legally binding assurances that the Irish backstop will only ever be temporary – UK press
Levels as of 12:50ET
- Hang Seng +1.0%; Shanghai Composite +1.3%; Kospi +0.8%; Nikkei225 +1.0%; ASX 200 +0.2%
- Equity Futures: S&P500 +0.3%; Nasdaq100 +0.5%, Dax +0.1%; FTSE100 +0.3%
- EUR 1.1364-1.1378; JPY 113.20-113.50 ; AUD 0.7212-0.7231; NZD 0.6843-0.6865
- Feb Gold -0.1% at $1,249/oz; Jan Crude Oil +0.1% at $51.27/brl; Feb Copper +0.9% at $2.79/lb