Chinese Industrial Profits Slow For The 6th Straight Month

Nov 27 18, 07:11 GMT

General Trend:

Asian large-cap tech shares track Monday’s gains in the US; Softbank gains over 3%
Limited impact seen on Apple’s suppliers from Trump’s comments, upcoming G20 meeting remains in focus
Shanghai Composite rises less than 1% in early trading, Property index gains
Japan megabanks rise, S&P500 Financials index rose on Monday
Australia’s banking index rises amid regulatory delay
Energy prices decline in Asian trading, oil prices closed higher on Monday
Japan’s Line Corp gains over 15%, speculated to enter into partnership with Tencent
Genting Malaysia declines over 14%, filed legal proceedings against Fox and Disney
China Iron Ore prices add to Monday’s losses
New Zealand Oct trade deficit wider than expected, imports at a record high

Headlines/Economic Data

Japan

Nikkei 225 opened +0.7%
RNO.FR Top executives from Nissan, Renault and Mitsubishi to meet as soon as Thursday – Japan press
(JP) Japan PM Abe said to cancel trip to Europe – Japanese press
(JP) JAPAN OCT PPI SERVICES Y/Y: 1.3% V 1.2%E
3938.JP Reportedly Line partners with Tencent on mobile payments in Japan – Nikkei [+17%]
(JP) Moody’s: Japan corporate earnings growth to slow down in 2019
(JP) Japan MoF sells ¥399.3B v ¥400B indicated in 0.80% (prior 0.8%) 40-yr JGBs, highest accepted yield 0.9400% v 1.0250% prior, bid to cover: 3.85x v 3.24x prior
(JP) Oil Refining companies in Japan expected to seek continued waiver from US sanctions on Iran oil imports after 180-day exemption ends – financial press
(JP) Japan PM Abe: Next initial budget to have measures to address sales tax, include tax cuts for car owners and rebates on some cashless purchases; to account for ¥2.0T of general budget (after the close yesterday)

Korea

Kospi opened +0.4%
(KR) South Korea Nov Consumer Confidence: 96.0 v 99.5 prior (21-month low)
(KR) China military airplane entered South Korea’s air defense identification zone (KADIZ) without notice three times on Monday, less than a month after the last such reported intrusion – Korean press
(KR) South Korea sells KRW801B v KRW800B indicated in 30-yr bonds; avg yield 2.005% v 2.11% prior; bid to cover 2.72x v 2.79x prior

China/Hong Kong

Hang Seng opened -0.1%, Shanghai Composite +0.4%
(CN) Pres Trump: expect to move ahead with plan to increase China tariffs to 25% on $200B worth of goods; iPhones made in China could be included in new round of tariffs – press interview
(CN) As bitcoin prices fall, China bitcoin miners (one of the largest in the world) have started to turn off machines and stop some of their mining – Caixing
2007.HK Notes Altissimo project in Hong Kong only sold 18 of the 110 units available by end of day Monday; priced apartments 5% lower than others in the neighborhood
(CN) China PBoC Open Market Operation (OMO): Skips open market operation v skipped prior (23rd straight skip)
(CN) China PBoC sets yuan reference rate: 6.9463 v 6.9453 prior
(CN) China Oct Industrial Profits y/y: 3.6% v 4.1% prior (6th consecutive month of slowing); YTD y/y: 13.6% v 14.7% prior
(CN) China National Development and Reform Commission (NDRC):will allow foreign banks in China to apply for government approval for a quota increase in their medium to long-term foreign debt for 2019 – Chinese press
322.HK Reports Q3 (CNY) Net 1.55B v 1.24B y/y, Rev 18.9B v 19.7B y/y [-17%]
(CN) S&P Asia Pacific Economist: Expects China GDP growth to remain above 6% in 2019, notes policy space to guide gradual slowdown; sees risks as mostly on the downside

Australia/New Zealand

ASX 200 opened +0.2%
(NZ) New Zealand Oct Trade Balance (NZD): -1.3B v -0.9Be; Exports: 4.9B v 4.9Be; Imports: 6.2B v 5.7Be
LYC.AU Plans to briefly shut down Malaysia production in Dec; as a results NDPR production to be cut by 400t in Q2
QIP.AU Enters into a merger agreement of equals with Xenith IP Group worth A$1.80/QANTM share [+5%]
(AU) Australia sells A$150M v A$150M indicated in Nov 2027 Indexed Bonds, avg yield 0.8033% v 0.8078% prior, bid to cover 3.45x v 4.97x prior
MIL.AU Receives consultant’s Preliminary Report: taking corrective measures; will not meet prior guidance given [-39%]
(AU) Australia PM Morrison: Will announce budget surplus before election; mid-year economic and fiscal outlook (MYEFO) to be released on Dec 17th; Budget to be released earlier than normal on April 2nd

North America

UTX Confirms to Separate Into Three Independent Companies; Completes Acquisition of Rockwell Collins; affirms dividend of $0.735 post split; Cuts FY18 $7.10-7.20 v $7.27e (prior $7.20-7.30); Raises Rev $64.5-65.0B v $64.8Be (prior $64.0-64.5B); Affirms organic Rev ~+6%
(MX) Mexico incoming Fin Min Urzua: To propose Gerardo Esquivel as deputy Central Bank Gov; to meet with rating agencies and investors in Dec to discuss the 2019 economic package
ADBE Reports Cyber Monday online sales $4.3B, +18% y/y; sees total cyber Monday sales of $7.9B by the end of the day
LMT (JP) Japan Govt considering buying up to 100 F35 fighter jets from the US in a deal worth ¥1.0T – Nikkei

Europe

(UK) Brexiteers to back PM May plan if she says when she is quitting – Times
(UK) PM May spokesperson (responding to Pres Trump): Brexit agreement means the UK can do a US trade deal (reminder President Trump: Brexit deal sounds like a good deal for the EU; Brexit deal as it stands means UK may not be able to trade with the US; We don’t like what is happening, hopefully it will get worked out)
ALO.FR EU may ask Alstom and Siemens for larger concessions and disposals including high speed train tech, before it clears the deal – FT

Levels as of 12:50ET

Hang Seng -0.1%; Shanghai Composite +0.1%; Kospi +0.8%; Nikkei225 +0.9%; ASX 200 +0.9%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 +0.0%
EUR 1.1326-1.1343; JPY 113.41-113.60; AUD 0.7214-0.7238;NZD 0.6754-0.6816
Feb Gold -0.1% at $1,228/oz; Jan Crude Oil -0.4% at $51.39/brl; Feb Copper -0.3% at $2.76/lb