Equity Futures Rise As US President Trump Breaks Silence On Huawei

Dec 12 18, 07:49 GMT

General Trend

Hang Seng supported by gains in the property, tech and telecom sectors
Automakers outside of China trade broadly higher amid renewed speculation that China could lower US auto tariffs
Japanese Marine/Transportation, Iron/Steel and Securities companies rise
Aussie tracks gains in the equity futures
After 2 full days of hearings, Huawei CFO Meng granted bail for C$10M with some conditions, next hearing set for Feb 6th, 2019
China detained a former Canadian diplomat Kovrig in Beijing in apparent, though unconfirmed, retaliation for the arrest of Huawei CFO Meng Wanzhou
SEMI: Expects 2019 global sales of new semiconductor manufacturing equipment to decline
China Commerce Ministry expected to hold weekly press conference on Thursday
President Trump: Release of Huawei CFO could be part of broader trade deal with China, could intervene in the Huawei case if it aids China trade deal; Think China is looking to cut tariffs on US cars to 15% immediately, very quickly, Will not raise tariffs on China until we see if they make a deal

Headlines/Economic Data

Japan

Nikkei 225 opened +1.0%
(JP) Japan will not ask junior companies to beat additional shinkansen cost – Japan press
(JP) Bank of Japan (BOJ) has met its FY ETF purchase target of ¥6.0T – Nikkei
(JP) JAPAN OCT CORE MACHINE ORDERS M/M: 7.6% V 9.7%E; Y/Y: 4.5% V 5.0%E
(JP) JAPAN NOV PPI (CGPI) M/M: -0.3% V -0.1%E; Y/Y: 2.3% V 2.4%E
(JP) Japan to spend ¥3.0T in second extra budget – press
(JP) Bank of Japan (BOJ) has met its FY ETF purchase target of ¥6.0T – financial press
(JP) Japan Trade Min Motegi: Japan will find common ground with US in trade talks; Japan will take more action for sales tax than before

Korea

Kospi opened +0.5%
(KR) South Korea Nov Unemployment Rate: 3.8% v 3.9%e
(KR) South Korea Financial Supervisory Service (FSS): To provide more information to help local financial firms make inroads into overseas markets – Yonhap
005380.KR Hyundai Motor Group Reveals ‘FCEV Vision 2030’: To increase fuel cell system production capacity 13x to 40K units/yr by 2022 and 700K by 2030; Names Albert Biermann as the new R&D chief; Vice Chairman Kim Yong-Hwan named as Vice Chairman of Hyundai Steel
(KR) South Korea Oct Money Supply L m/m: 0.7% v 0.1% prior; M2 m/m: 0.9% v -0.1% prior

China/Hong Kong

Hang Seng opened +1.1%, Shanghai Composite +0.5%
(CN) Central Economic Work Conference (starting Dec 14th) expected to focus on policies that will boost domestic economy in order to avoid hard landing and support employment in the face of trade uncertainties and slowdown – SCMP
(CN) ~30 institutions could be on China’s first D-SIFI list, including banks, insurance and securities companies – China press
HUAWEI.CN (CN) Canada judge rules CFO Wanzhou Meng granted bail for C$10M (C$7M to comes in cash) with 5 sureties
HUAWEI.CN Issues statement on bail hearing of CFO: “We have every confidence that the Canadian and US legal systems will reach a just conclusion … Huawei complies with all applicable laws and regulations in the countries and regions where we operate”
521.HK Said to have sold properties in Hong Kong at a HK$70M loss – Local Press
600500.CN (CN) China said to be near merger agreement between Chemchina and Sinochem as prepertory work and deal issues largely settled – press
(CN) China PBoC Open Market Operation (OMO): Skips operation for the 34th straight session
(CN) China PBoC sets yuan reference rate: 6.9064 v 6.8996 prior
(CN) CHINA NOV NEW YUAN LOANS (CNY): 1.250T V 1.150TE
(CN) CHINA NOV M2 MONEY SUPPLY: 8.0% V 8.0%E (matches record low)
1044.HK Short-selller Bonitas has questioned the company’s financial statements dating back to 2005

Australia/New Zealand

ASX 200 opened +0.4%
(NZ) RBNC Orr: RBNZ is under resourced for regulatory role; NZD exchange rate is remarkably well behaved – speaking to parliament
SHL.AU To acquire Aurora Diagnostics for US$540M; Planning A$600M placement at A$19.50/shr; Affirms FY19 (ex-impact of acquiring Aurora) EBITDA +3-5% y/y; earnings weighted to H2
(AU) Australia Dec Westpac Consumer Confidence: 104.4 v 104.3 prior; m/m: 0.1% v 2.8% prior
(AU) Australia sells A$1.0B v A$1.0B indicated in 2.50% May 2030 bonds, avg yield 2.4958% v 2.7486% prior, bid to cover: 2.83x v 3.31x prior \

Other Asia

(TW) Nikkei notes that 7 of the 9 Taiwan Apple suppliers reported m/m Rev declines in Nov, suggesting iPhone sales may have peaked in Oct v Dec in 2017
(SG) Monetary Authority of Singapore (MAS) releases Dec professional forecasters survey: 2018 GDP growth is forecast at 3.3% v 3.2% in Sept; 2019 GDP growth forecast at 2.6% v 2.7% prior
(SG) Singapore Oct Retail Sales M/M: -0.4% v -0.4% prior; Y/Y: 0.1% v 1.5%e; Retail Sales (Ex Auto) Y/Y: 0.5% v 1.8% prior

North America

(US) Pres Trump: Will shut down govt if we don’t have border security; would be proud to shut down govt if there’s no border wall funding
(US) Weekly API Oil Inventories: Crude: -10.2M v +5.4M prior; Gasoline: -2.5M v +3.6M prior
(CA) Canada Foreign Min Freeland: confirms Canadian detained in China; says there is no political inference with respect to Huawei CFO Meng case; Won’t comment whether Meng and Kovrig cases are related – comments in Toronto
SEMI: Sees 2018 global sales of new semiconductor manufacturing equipment at $62.1B, +9.7% y/y (record high) (AU) Australia Dec Westpac Consumer Confidence: 104.4 v 104.3 prior; m/m: 0.1% v 2.8% prior (AU) Australia Dec Westpac Consumer Confidence: 104.4 v 104.3 prior; m/m: 0.1% v 2.8% prior
TME Prices 82M ADS IPO at $13/ADS, the low end of the $13-15 initial range
(US) President Trump: Fed would be foolish to raise rates; still fighting some trade battles and needs accommodation

Europe

(UK) Senior govt source: expect confidence vote on PM May imminently; threshold of 48 letters has been reached to trigger a vote – Buzzfeed
(UK) UK 1922 Committee Chairman Brady is not planning to see PM May after PMQs on Wed
(DE) China President Xi and German President Steinmeier agreed on further cooperation between China and Germany to generate outcomes that could benefit peoples from both countries and the rest of the world – Chinese press

Levels as of 12:50ET

Hang Seng +1.6%; Shanghai Composite +0.2%; Kospi +1.4%; Nikkei225 +2.2%; ASX 200 +1.1%
Equity Futures: S&P500 +0.9%; Nasdaq100 +1.3%, Dax +1.0%; FTSE100 +0.7%
EUR 1.1307-1.1400; JPY 113.33-113.52 ; AUD 0.7196-0.7230; NZD 0.6872-0.6901
Feb Gold +0.1% at $1,249/oz; Jan Crude Oil +0.6% at $52.27/brl; Feb Copper +0.2% at $2.77/lb