General Trend:
- Equity Futures rise following US/China trade ‘truce’: Nasdaq Futures +1.8%, S&P500 +1.4%, Nikkei 225 Futures +1.1%; WTI Crude +2.8%, Copper +2.1%
- Equity markets in China and Hong Kong rise over 2%; Technology names and automakers gain
- Trump said China has agreed to remove tariffs on car imports
- Macau gaming shares rise after monthly casino revenues data
- Trade sensitive Marine Transportation and Iron/Steel companies gain in Japan
- Australian equities supported by the Resources and Energy Sectors
- Graincorp [GNC.AU] rises over 26%, received takeover bid
- Bluescope Steel [BSL.AU] supported by stock buyback
- Commodity currencies rise following ‘truce’ between the US and China regarding trade: AUD/USD +0.8%, NZD/USD +0.5%
- Chinese Yuan and other Asian currencies gain on trade truce
- Various Chinese companies plan to sell USD bonds
- Japan Q3 Capex misses ests
- Australia home prices decline for 14th straight month (Corelogic)
- US President Trump: China has agreed to remove tariffs on Car imports – tweet
- Looking Ahead: RBA expected to hold policy meeting on Tuesday; US equity markets to close on Dec 5th in honor of former President George H. W. Bush
Headlines/Economic Data
Japan
- Nikkei 225 opened +1.3%
- (JP) JAPAN Q3 CAPITAL SPENDING (CAPEX) EX SOFTWARE: 2.5% V 10.7%E; CAPITAL SPENDING Y/Y: 4.5% V 8.5%E; Company profits: 2.2% v 14.0%e; Company Sales: 6.0% v 5.1% prior
- (JP) Japan Nov Final PMI Manufacturing: 52.2 v 51.8 prelim (slowest pace since Aug 2017)
- (JP) US President Trump acknowledges Japan PM Abe work to reduce trade imbalance, but needs to be more progress – Nikkei
Korea
- Kospi opened +1.5%
- (KR) South Korea President Moon and President Trump agreed to revive the momentum on negotiations for the denuclearization of North Korea – Korean press
- (KR) South Korea President Moon starts state visit to New Zealand – Korean press
- (KR) South Korea banks non-performing loans ratio (NPL) falls below 1% for the first time in 10-yrs – Korean press
- (KR) South Korea Nov PMI Manufacturing: 48.6 v 51.0 prior
- (KR) South Korea sells KRW600B v KRW600B indicated in 5-yr bonds; avg yield 1.98%
China/Hong Kong
- Hang Seng opened +2.6%, Shanghai Composite +2.3%
- (CN) SENIOR CHINA DIPLOMAT: PRESIDENT XI AND PRESIDENT TRUMP AGREED THAT US WILL NOT IMPLEMENT 25% TARIFF ON JAN 1ST, 2019; TO BE RETAINED AT 10% LEVEL FOR 90 DAYS; China agrees to purchase more from the US to work on imbalance, will work to reach an agreement on trade in the next 90-days; China agrees to purchase US agricultural products immediately; If the two countries are unable to reach agreement over the next 90 days, the 10% tariff will rise to 25%
- (HK) Macau Nov Gaming Rev (MOP): 25.0B v 27.3B prior; Y/Y: 8.5% v 2.6% prior
- (CN) China General Administration of Customs (GAC) says Jan to mid-Nov total imports and exports (total trade volume) surpassed the entire trade volume for 2017; said the volume was nearly 15% higher than same period in 2017 – Xinhua
- (CN) China Financial Futures Exchange (CFFEX) eases restrictions on domestic stock index futures trading in a sound and orderly way in a bid to facilitate market functions – Xinhua
- (CN) China PBoC sets yuan reference rate: 6.9431 v 6.9357 prior
- (CN) China PBoC Open Market Operation (OMO): Skips open market operation v skipped prior (27th straight skip)
- (CN) CHINA NOV CAIXIN PMI MANUFACTURING: 50.2 V 50.1E
- (CN) SCMP Op Ed: Look out for another PBOC move to support the economy as growth momentum fades; the next move will be the 5th time in 13-months
Australia/New Zealand
- ASX 200 opened +0.4%
- (NZ) New Zealand Q3 Terms of Trade q/q: -0.3% v 0.0%e
- (AU) Australia Nov Corelogic House Price m/m: -0.9% v -0.6% prior (14th consecutive monthly decline)
- (AU) AUSTRALIA OCT BUILDING APPROVALS M/M: -1.5% V -1.5%E; Y/Y: -13.4% V -14.0%E
- (AU) AUSTRALIA Q3 COMPANY OPERATING PROFIT Q/Q: 1.9% V 2.8%E; INVENTORIES SA Q/Q: 0.0% V 0.4%E
- GNC.AU Receives non-binding A$10.42/shr cash offer from Long Term Asset Partners Pty (+26%)
- (AU) Australia Nov Commodity Index: 122.1 v 123.7 prior; Y/Y: 14.9% v 14.9% prior
Other Asia
- TSM Said to provide certain product price incentives – Local Press
North America
- QCOM China President Xi has indicated he is “open to approving” the prior unapproved deal between Qualcomm and NXP, should it again be presented to him
- QCOM Considers prospect of NXP deal closed, deadline is past deal terminated – email statement
- TRCO Reportedly Nexstar has reached deal to acquire Tribune Media for $46.50/shr in cash – press
- (SA) Saudi Oil Min Khalid Al Falih: OPEC+ agreement has stabilized the oil market, providing benefit to consumers, producers, and the global economy
- (CA) Alberta (Canada): Mandates 325K bpd cut in oil output to ease supply glut and deal with low crude prices (~9% of total output), effective from Jan 2019; relates to oil-sands and conventional oil
Europe
- DBK.DE CEO Sewing: Not at risk of a takeover, despite ongoing speculation about a possible tie-up with UBS or Commerzban – press
- (ES) Spain region of Andalusia holds elections: Far right Vox party wins 12 of 109 seats; Socialists winning party but will need to form coalition
- (EU) EU Finance Ministers expected to agree to give bailout fund new responsibilities but delay decision on EU budget and deposit guarantee – financial press
Levels as of 12:50ET
- Hang Seng +2.5%; Shanghai Composite +2.7%; Kospi +1.7%; Nikkei225 +1.0%; ASX 200 +1.8%
- Equity Futures: S&P500 +1.7%; Nasdaq100 +2.1%, Dax +1.1%; FTSE100 +0.8%
- EUR 1.1328-1.1357; JPY 113.44-113.82 ; AUD 0.7349-0.7381;NZD 0.6889-0.6919
- Feb Gold +0.4% at $1,231/oz; Jan Crude Oil +5.2% at $53.60/brl; Feb Copper +1.8% at $2.84/lb
