China Speculated To Be Open To Changes To Its 2025 Plan

Dec 13 18, 08:02 GMT

General Trend:

Property shares outperform in China and Hong Kong, add on to recent gains amid yuan strength
Chinese steel makers track strength in metals prices, trade developments eyed
Hong Kong listed UK-banks gain, PM May survived confidence vote
Trade sensitive Marine/Transportation and Iron/Steel sectors gain in Japan; Softbank declines
Australia’s telecom index drops over 3%; Competition regulator raised concerns about the TPG Telecom/Hutchison merger
Chipmakers in South Korea lag the overall market
NZ cuts growth and operating surplus forecasts, muted impact on the Kiwi
China bond yields track Treasuries, gains in equity markets
Diplomatic issues between China and Canada continue to linger with a second Canadian citizen being questioned and unreachable by authorities
China said to be open to revisions to its ‘Made in China 2025’ plan
China Commerce Ministry expected to hold weekly press conference later today
Looking Ahead: China Nov data due for release on Friday (including industrial production), BoJ to release quarterly Tankan survey
ECB and Philippines Central Bank expected to hold rate decisions on Thursday

Headlines/Economic Data

Japan

Nikkei 225 opened +0.7%
EU Parliament lawmakers approve start of Japan free trade agreement
(JP) Japan Chief Cabinet Sec Suga: To closely watch UK developments after PM May confidence vote; no plans to ask companies to avoid certain devices
(JP) Japan Nov Tokyo Avg office Vacancies y/y: 1.98% v 2.2% prior
6302.JP Silchester International raises stake to 8.15% (prior 7.08%)
7201.JP Said to be planning to repatriate $1.1B from China as it gathers cash amid tensions with Renault – press
(JP) Japan MOF sells ¥2.0T v ¥2.0T indicated in 0.10% 5-yr JGB: avg yield: -0.1120% v -0.0870% prior, bid to cover: 3.84x v 3.89x prior

Korea

Kospi opened +0.2%
(KR) South Korea Nov Import Price Index M/M: -4.6% v 1.5% prior (fastest decline in ~4-yrs); Y/Y: 6.0% v 10.7% prior
(KR) North Korea nuclear test site may not have been completely abandoned according to satellite images, buildings and roads remain intact – Yonhap citing report from US think tank 38 North

China/Hong Kong

Hang Seng opened +0.9%, Shanghai Composite +0.2%
(CN) China said to have purchased up to 2M tons of US soybeans – US financial press
(CN) China PBoC Open Market Operation (OMO): Skips operation for the 35th straight session
(CN) China PBoC sets yuan reference rate: 6.8769 v 6.9064 prior
(CN) China FX Regulator SAFE official: Yuan to keep basically stable
(CN) China Vice President Wang Qishan: Needs to be a stronger confidence and more concrete efforts to write a “new chapter” of reform and opening up in the new era – Xinhua
(CN) Peking University professor Yan Se: Although external uncertainties are abound and downside risks have emerged, China’s policy makers have many economic levers at hand to deal with challenges – Xinhua
(HK) The plan related to the HK/China ETF Connect said to be canceled amid certain technical issues – HK Press
(CN) China reportedly preparing to replace “Made in China 2025” plan; revised plan would downplay China’s efforts to expand its manufacturing dominance
(CN) China said now hold Central Economic Work Conference meeting Dec 19-21 (prior Dec 14th) – US financial press

Australia/New Zealand

ASX 200 opened flat
FMS.AU To delist from ASX, subject to shareholder approval
TPM.AU ACCC expresses preliminary competition concerns about proposed merger with Vodafone Hutchison Australia
(NZ) New Zealand Treasury issues Half-Year Economic and Fiscal Update: NZ$8.0B bond issuance unchanged until 2022, cut 2018/19 GDP growth forecast; lowers operating surplus forecasts
(AU) Australia Dec Consumer Inflation Expectation: 4.0% v 3.6% prior

North America

(CA) Canada Foreign Min Freeland: Another Canada citizen, Spavor, got in touch with Canadian authorities to say Chinese authorities were asking him questions and Canada has not been able to make contact with him since
(CA) Follow Up: Canada businessman Michael Spavor is being investigated in China for suspicion of harming China’s national security – Chinese Press
ZTS Authorizes $2B share repurchase program (5% of market cap); Raises Quarterly dividend 30.2% to $0.164 from $0.126 (indicated yield 0.72%)
UA Raises bottom end FY18 $0.21-0.22 v $0.22e (prior $0.19-0.22), gross margin flat (prior flat to down slightly); Initial FY19 $0.31-0.33 v $0.35e, rev +3-4%

Europe

(UK) PM May: pleased to receive backing of colleagues in confidence vote – statement after confidence vote
(UK) Brexiteers count 86 Tory members as voted that they have no confidence in PM May leadership (far short of number needed to oust May) – UK’s Telegraph
(UK) EU expected to reject UK PM May request at EU summit for legally binding assurances that the Irish backstop will only ever be temporary – UK press

Levels as of 12:50ET

Hang Seng +1.0%; Shanghai Composite +1.3%; Kospi +0.8%; Nikkei225 +1.0%; ASX 200 +0.2%
Equity Futures: S&P500 +0.3%; Nasdaq100 +0.5%, Dax +0.1%; FTSE100 +0.3%
EUR 1.1364-1.1378; JPY 113.20-113.50 ; AUD 0.7212-0.7231; NZD 0.6843-0.6865
Feb Gold -0.1% at $1,249/oz; Jan Crude Oil +0.1% at $51.27/brl; Feb Copper +0.9% at $2.79/lb