Equities Stop Their Landslide As US And China Talk On Trade

General Trend:

• Equities markets open cautiously higher as China confirms talks with US on trade and China expected to make announcement on resumption of soybean buying. Bond yields generally higher.
• China expected to announce details of their resumed purchases of US soybeans, all purchases expected to go into reserves
• Shares of Samsung Biologics in South Korea rise over 20% after Korea Exchange says it can remain listed despite accounting fraud investigation
• Chinese press speculates that the PBoC will resume OMO operations soon, possibly this week
• Brexit vote cancelled, UK PM May to make rounds in Europe to drum up support for next steps
• Japan winter bonuses to rise 3.28% y/y to 834,391, 6th consecutive year of increases and larger increase than 2017’s 2.18%
• Aussie dollar rose 0.2% on the news that China Vice Premier Liu: Spoke with US Treasury Sec Mnuchin and Trade Rep Lighthizer on how to implement consensus reached by two leaders, pushing forward timetable, roadmap for next stages of trade talks
• Gambling names stronger in Hong Kong on the report that gaming Rev is up 6% in the first week of December

Headlines/Economic Data

Japan

• Nikkei 225 opened +0.3%
• (JP) Japan Cabinet approval rating -5 ppts to 41% – NHK poll
• (JP) Reportedly Japan’s 3 carriers are to ban Huawei, ZTE from infrastructure – Japanese Press
• 7201.JP Tokyo Stock Exchange (TSE) considering putting co on alert list – Nikkei
• (JP) JAPAN Q4 BUSINESS SURVEY INDEX (BSI) LARGE ALL INDUSTRY Q/Q: 4.3 V 3.8 PRIOR; BSI LARGE MANUFACTURING Q/Q: 5.5 V 6.5 PRIOR
• (JP) Japan Nov Money Supply M2 y/y: 2.3% v 2.6%e; M3 y/y: 2.1% v 2.3%e
• (JP) Japan winter bonuses expected to be at record high of ¥834,391 ($7,400) according to recent poll; marking the 6th consecutive year of growth and +3.28% growth y/y v 2.18% last year – Nikkei
• (JP) Japan Fin Min Aso: Q3 GDP reflects natural disasters; don’t believe the economy is getting worse; do not remember Trump talking about FX with PM Abe
• (JP) Japan MoF sells ¥700B v ¥700B indicated in 0.90% 30-yr JGBs, avg yield: 0.7940% v 0.8740% prior, bid to cover 3.78x v 3.99x prior
• 7201.JP Tokyo court approves detention of Ghosn and Kelly until Dec 20th

Korea

• Kospi opened +0.1%
• (KR) US Treasury announces North Korea-related sanctions on three people, including one close adviser to Leader Kim Jong Un
• (KR) South Korea Oct delinquency rate for bank loans more than 30 days overdue 0.58% v 0.55% prior – SK FSS
• 207940.KR Korea exchange rules that the co. is still qualified to remain listed on the market despite being cited for accounting fraud
• 660.KR CEO Lee Seok-hee: global market for memory chips is anticipated to continue to grow despite short-term tumbles, need to devise strategies based on long-term visions – Yonhap
• (KR) South Korea new Fin Min Hong: Need to create more jobs; should try to boost economic vitality – inaugural speech

China/Hong Kong

• Hang Seng opened -0.5%, Shanghai Composite +0.1%
• (HK) Hong Kong Chief Exec Lam: Will not use public funds to bailout housing market – SCMP
• 941.HK China Govt grants 5G licenses to China Mobile, China Unicom and China Telecom – SCMP
• (CN) Abacus, 500 Startups and SCMP partner to create China Internet report: internet penetration just above 50%; smartphone users 3x and mobile payments 11x more users than the US
• (CN) China to announce detail of its first purchase of US soybeans, most soybeans purchased from US farmers expected to be added to state reserves – SCMP
• (HK) HSBC analyst: Hong Kong not fully ready to raise rates – HK press
• HUAWEI.CN CFO Wanzhou Meng bail hearing ends without decision, has been a request for house arrest
• (CN) China PBoC Open Market Operation (OMO): Skips v skipped prior (33rd straight skip)
• (CN) China PBoC sets yuan reference rate: 6.8996 v 6.6893 prior
• (CN) China Vice Premier Liu: Spoke with US Treasury Sec Mnuchin and Trade Rep Lighthizer; discussed how to implement consensus reached by two leaders, pushing forward timetable, roadmap for next stages of trade talks
• HUAWEI.CN Some Chinese companies have announced policies requiring the exclusive use of Huawei products in a bid to support the company following the arrest of its CFO; some also to penalize employees who purchase iPhones – press
• (HK) Gaming Rev for the 1st 9-days of Dec said to be +6% y/y – local press
• (CN) China PBoC expected to resume open market operations (OMO) soon to fill short term liquidity gaps into the end of the year; Analysts expect the central bank to roll over CNY286B in medium-term lending facility (MLF) loans this Friday – China Securities Journal
• (CN) China Central Economic Work Conference to start Dec 14th – press

Australia/New Zealand

• ASX 200 opened +0.1%
• (NZ) New Zealand Nov Card Spending Retail m/m: -0.4% v 0.3%e; Total m/m: -0.2% v -0.1% prior
• (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 117.7 v 119.5 prior
• (AU) AUSTRALIA Q3 HOUSE PRICE INDEX Q/Q: -1.5% V -1.6%E; Y/Y: -1.9% V -2.0%E
• (AU) Australia Nov NAB Business Confidence: 3 v 5 prior; Conditions: 11 v 13 prior

Other Asia

• (PH) Philippines Oct Trade Balance: -$4.2B v -$3.73Be

North America

• (US) New York Fed Nov Survey of Consumer Expectations: Inflation outlook remains stable while home price expectations continue to decline
• (US) White House advisor Kushner: Congress is very close on a prison reform bill – Fox
• QCOM Confirms its been granted preliminary injunctions against Apple in China; Preliminary injunction order are effective now for iOS12; if Apple is violating the prelim injunction, will seek action by enforcement tribunals

Europe

• (FR) France Pres Macron: Has asked the govt to increase wages by €100/month starting in Jan; To cancel social security tax increase on pensioners who earning under €1,000/month
• (UK) PM May: confirms she will delay vote on Brexit; there is broad support for aspects of the deal, the Backstop is creating concerns
• (UK) EU’s Tusk: decided to call European Council on Brexit Art. 50 on Thurs; We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification
• (UK) House of Commons Speaker agrees to emergency debate tomorrow on PM May decision to delay Brexit vote – press
• (UK) PM May to meet with German Chancellor Merkel on Tues as part of effort to secure Brexit support; will be in The Hague tomorrow, then Berlin, followed by separate bilateral meetings with Juncker and Tusk in Brussels – press
• (IT) EU Finance Commissioner Moscovici: EU talks with Italy about budget will resume on Dec 12th, the clock is ticking

Levels as of 12:50ET

•  Hang Seng -0.1%; Shanghai Composite +0.2%; Kospi +0.1%; Nikkei225 -0.3%; ASX 200 +0.4%
• Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.2%; FTSE100 -0.0%
• EUR 1.1351-1.1370; JPY 113.01-113.36 ; AUD 0.7185-0.7215;NZD 0.6866-0.6887
• Feb Gold +0.2% at $1,252/oz; Jan Crude Oil +0.3% at $51.16/brl; Feb Copper +0.4% at $2.74/lb