Asian Equity Markets Trade Generally Higher

General Trend:

• Lower oil prices support Asian airlines
• Shanghai Composite opened higher by less than 0.1%, declined 2.5% on Friday; Property index outperforms
• Tencent gains over 2%; China speculated to soon issue policies related to e-commerce imports (Local press)
• S&P: China is on track to register the first annual decline in automotive sales since at least 2000
• Nissan and Mitsubishi Motors outperform, Mitsubishi to hold board meeting later today
• Japanese equities upside capped by declines in the financial sector
• South Korea’s Kopsi supported by chipmakers
• Declines in the Resources and Energy sectors weigh on Australian share market financials outperform
• New Zealand glass firm Metro Performance declined over 29%, cut outlook and suspended dividend
• WTI and Brent Crude rise in Asian trading, oil prices dropped over 6% on Friday
• China Dalian Iron Ore declines over 6% (lowest in 5-months) amid drop in steel prices
• Natural Gas Futures drop over 4%, rolled to the Jan 2019 contract
• Japan Manufacturing PMI hits 2-year low as new orders decline; in line with Euro Zone PMI data
• New Zealand Q3 retail sales comes in flat after an expected increase (weakest reading since 2013), kiwi dollar falls 0.25%
• Kiwi later erases decline, tracks gains in Chinese equities and oil prices
• Korean Won (KRW) gains over 0.2%; Bank of Korea (BoK) expected to hike rates at Friday’s meeting
• Russia seizes Ukraine ships near annexed Crimea after firing on them. Ukraine President Poroshenko: Has asked Parliament to meet Monday to discuss martial law Monday after Russia attacked Navy ships on the Black Sea
• Looking Ahead: G20 meeting to be held in Argentina from Nov 30th to Dec 1st.

Headlines/Economic Data

Japan

• Nikkei 225 opened flat
• (JP) Japan considering increasing defense spending to 1.3% of GDP by FY23 – Japan press
• (JP) JAPAN NOV PRELIM PMI MANUFACTURING: 51.8 V 52.9 PRIOR (lowest level since Nov 2016); New orders fall to contraction for the first time since Sept 2016
• (JP) On Nov 24th, BoJ, PBoC and BoK held the 10th tripartite governors’ meeting: Governors exchanged views on recent economic and financial developments in the 3 countries
• 9983.JP Uniqlo unit’s Greater China sales said to have slowed in the face of trade war – HK Press
• 7201.JP Former France Ministers support Ghosn, noting there is a clear attempt to destabilize the tie up with Renault (of which Ghosn is the biggest supporter) – press

Korea

• Kospi opened +0.1%
• (KR) Hyundai Research Institute (HRI): South Korea 4th industrial revolution may be compelled to push forward restructuring if there is a slowdown in growth going forward
• (KR) North Korea not responding to US offer for talks – Korean press
• (KR) Korea Economic Research Institute (KERI): top major export industries are expected to face a tumble in terms of global competitiveness within three years as Chinese rivals steadily catch up with local companies
• (KR) Bank of Korea (BOK) sells KRW900B in 1-yr Monetary Stabilization Bonds (MSBs) at 1.92% v 1.87% prior
• (KR) South Korea sells KRW600B v KRW600B indicated in in 3-yr bonds; yield 1.895% v 1.915% prior

China/Hong Kong

• Hang Seng opened +0.7%, Shanghai Composite +0.1%
• (CN) China State Council issues more than 50 measures to support pilot free trade zones (FTZs) to deepen reform and innovation
• (CN) China PBoC may have conducted repos with certain banks – China Securities Journal
• (CN) According to economists from the Beijing Renmin University China 2019 GDP growth is expected to slow to 6.3% from 6.6% in 2018 – financial press
• (HK) New home sales in Hong Kong said to decline to the lowest level in close to 3 years – Local Press
• BABA Babytree Group (backed by Alibaba) prices Hong Kong IPO at HK$6.80/share and raises HK$217M (bottom of expected pricing range)
• (CN) Former PBOC Adviser calls for flexibility in yuan – China Securities Journal
• (CN) China PBoC Open Market Operation (OMO): Skips open market operation v skipped prior (22nd straight skip)
• (CN) China PBoC sets yuan reference rate: 6.9453 v 6.9306 prior
• (CN) China luxury homes are still changing hands, but at lower prices and for a smaller pool of buyers as China’s capital controls take effect – SCMP
• (CN) More than 60% of public China companies have issued upbeat FY18 guidance – Chinese press
• (HK) Hong Kong SFC planning to increase security of backdoor listings; target the use of nominees to mask ownership
• (CN) China National Grain and Info Center (CNGOIC): Expect soybean imports to fall (1st time in 7-yrs) amid trade war

Australia/New Zealand

• ASX 200 opened -0.2%
• (NZ) New Zealand Q3 Retail Sales ex-inflation q/q: 0.0% v 1.0%e
• (NZ) New Zealand National Party (opposition) Leader Bridges: Would repeal capital gains tax
• (AU) Australia sells A$600M v A$600M indicated in Nov 2028 bonds, avg yield 2.6418% v 2.7698% prior, bid to cover 4.66x v 4.94x prior
• MPG.NZ Reports H1 (NZ$) Net 9.1M v 9Me; EBIT 15.5M v 15Me; Rev 140.5M v 143Me; suspends dividend [-30%]
• (AU) RBA Assist Gov Kent: Slower credit growth is due to tighter supply and weaker demand

Other Asia

• (TW) Taiwan Local Election Results: among the 22 county and city chief posts, the Kuomintang Party won 15 seats, the Democratic Progressive Party 6; remainder went to independent candidate; Taiwan President Tasi Ing-wen resigned as chairwoman of the ruling DPP party amid the election results

North America

• (US) Mastercard projected Black Friday sales total $23B, +9% y/y; Sees Nov 1st to Dec 24th sales +5% y/y – US press
• (US) ShopperTrak data finds 1.7% decline in shopper visits to US retail stores on Black Friday; 1% decline over Thursday-Friday two day period
• (SA) Saudi Arabia said to be leaning towards lower cut to production; OPEC considering plan to retain current output targets that were first set in 2016 (implies 1M bpd cut) – US financial press
• GM Said to plan the closure of its Oshawa (Canada) operations, may impact 2,200 jobs – US financial press

Europe

• (UK) PM May reiterated next weeks are crucial for country’s future, will be one of the most significant votes in Parliament for many year; the best Brexit deal was achieved and in the national interest, there will be no other deal negotiated or second referendum
• (UK) According to Telegraph UK Cabinet ministers and EU diplomats are secretly drawing up a “Plan B” proposal for Brexit based on looming assumption that PM May deal will be blocked by Parliament
• (UK) European Council releases statement endorsing UK PM May Brexit deal (as expected)
• (IT) Italy to work closely with EU this week to find agreement on Italy 2019 budget

Levels as of 12:50ET

• Hang Seng +1.7%; Shanghai Composite 0.0%; Kospi +1.1%; Nikkei225 +0.8%; ASX 200 -0.8%
• Equity Futures: S&P500 +0.5%; Nasdaq100 +0.7%, Dax +0.5%; FTSE100 +0.4%
• EUR 1.1326-1.1421; JPY 112.88-113.29 ; AUD 0.7225-0.7250;NZD 0.6755-0.6794
• Feb Gold +0.2% at $1,231/oz; Jan Crude Oil +1.0% at $50.94/brl; Feb Copper -0.2% at $2.78/lb