US Tech Selloff Extends To Asia

Nov 20 18, 07:55 GMT

General Trend:

Hong Kong’s Hang Seng underperforms amid lingering trade concerns, Tencent declines over 3%
Apple said to cut orders from certain suppliers in China, AAC Technologies declines over 3%
Large caps and property shares weigh on the Shanghai market
Nissan drops over 5% following arrest of Chairman, alliance partner Mitsubishi Motors declines over 6%
Arrest of Ghosn putting the future of Renault/Nissan/Mitsubishi alliance in question; respective boards all meeting this week to discuss the developments
US equity Futures extend declines from Monday
Energy and telecom shares decline in Australia
Australia bond yields remained higher following RBA minutes, Q3 GDP growth seen ‘solid’
NZD supported by declines in AUD/NZD
BoJ Gov defends negative interest rate policy, little market reaction seen
China investigators find “massive evidence” that Samsung, Hynix and Micron engaged in anti-competitive behavior

Headlines/Economic Data

Japan

Nikkei 225 opened -1.1%
7201.JP CEO: affirms Nissan found serious, unacceptable misconduct; confirms both Chairman Ghosn and Director Kelly been arrested – press conference comments
(JP) Japan Fin Min Aso: PM Abe has ordered compilation of second extra budget for FY18/19, will have disaster relief and sales tax measures
(JP) Japan Trade Min Seko: Expect Renault/Nissan alliance members to keep talking; Japan credit card fees are higher than abroad
(JP) Bank of Japan Gov Kuroda: In 2013 there was a need for bold monetary policy, now we need to persistently continue policy, there is no need to take additional measures now
(JP) Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.70% (prior 0.70%) 20-yr bonds; avg yield 0.6120% v 0.6830% prior; bid to cover 3.91x v 4.23x prior

Korea

Kospi opened -1.2%
(KR) South Korea Oct PPI Y/Y: 2.2% v 2.7% prior (1st decline in almost a year)
(KR) South Korea and China hold talks over how to ease trade disputes and expand investments between the two countries – Yonhap
(KR) South Korea and US launch working group on how to aid North Korea on getting rid of its nuclear weapons this week – Yonhap
KEP Moody’s: Company faces increased credit challenges from heightened safety controls on nuclear power

China/Hong Kong

Hang Seng opened -1.3%, Shanghai Composite -0.7%
(CN) Yuan is less likely to fall past 7 level against USD – China Securities Journal
(CN) According to China Banking and Insurance Regulatory Commission (CBIRC) Q3 NPL ratio for commercial banks 1.87% v 1.86% prior
(CN) China PBoC Research Head Xu Zhong: Cannot mix up short-term macro policies with reform goals; downward pressure on China’s economy has significantly increased, caused partially by prior policy adjustments
(CN) China PBoC Open Market Operation (OMO): v skipped prior (18th straight skip)
(CN) China PBoC sets yuan reference rate: 6.9280 v 6.9245 prior
(CN) China PBOC Adviser Liu Shijin: China market economy is at a low level and imperfect; China cannot go backward on market reform
(CN) China Foreign Ministry: APEC failure to agree on a communique was caused by certain countries “excusing” protectionism and trying to force their views on others – press

Australia/New Zealand

ASX 200 opened slightly lower
(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 117.8 v 119.8 prior
WES.AU De-merger of Coles effective, Coles to start trading on ASX Wednesday
(AU) Reserve Bank of Australia (RBA) November Meeting Minutes: Reiterates next move in interest rate more likely to be up than down
(AU) IMF recommends Australia not to withdraw macroeconomic policy support – IMF annual review

Other Asia

(TW) Taiwan expected to ease certain restrictions on cross-border remittances – Local Press
(IN) Reserve Bank of India gives to Govt pressure and will re-assess management of its reserves and treatment of troubled banks

North America

AAPL Said to cut orders by 30% from 2 China component supplies due to slow demand for iPhone XR – SCMP
PCG Lawmakers in California might introduce bill related to the utility by as early as Dec 3rd – US financial press (+5% after hours)
(MX) Mexico said to expect for steel and aluminum tariffs to be lifted as part of the signing of the previously announced trade deal between US/Mexico and Canada – US Press
Bitcoin falls below $5,000 for the first time since Oct 2017 (overnight)

Europe

(EU) EU Budget Commissioner Oettinger: plans to deliver new EU budget proposal in a few days
(UK) Reportedly PM May has provisional agreement with EU to scrap Ireland backstop in order to win support from Brexiteers – Sun
(UK) France Foreign Min Le Drian: EU has made its final offer regarding Brexit; now it’s up to the UK to decide

Levels as of 12:50ET

Hang Seng -2.1%; Shanghai Composite -1.7%; Kospi -1.0%; Nikkei225 -1.1%; ASX 200 -0.4%
Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.3%; FTSE100 -0.3%
EUR 1.1394-1.1464; JPY 112.40-112.66; AUD 0.7268-0.7301;NZD 0.6835-0.6855
Dec Gold -0.2% at $1,223/oz; Jan Crude Oil -0.3% at $57.02/brl; Dec Copper -0.6% at $2.78/lb