General Trend:
- Trump: we have a deal, we are potentially very close to deal with China – Fox News interview (comments from Nov 22nd)
- Financial and property shares trade generally higher in Hong Kong and Shanghai after HK elections; China should lower capital replenishment barriers for small banks (People’s Daily)
- Shanghai IT index drops over 3%; China issued guidance for increased penalties related to Intellectual property (IP) theft (Chinese press)
- Nikkei trades higher as Softbank rises, Japanese trade-sensitive Iron/Steel and Marine/Transportation sectors also gain along with financials
- Resources and Energy sectors rise in Australia, Westpac continues to lag amid regulatory scrutiny
- China government bond yields rise ahead of expected US dollar denominated supply
- There continues to be press speculation about possible increase in longer-dated JGB issuance by Japan
- AUD/JPY rises with equities, RBA speak on the agenda for Tuesday
- RBA Gov Lowe due to speak on ‘unconventional monetary policy: some lessons from overseas’ on Nov 26th (Tuesday); RBA Deputy Gov Debelle also due to speak on employment and wages
- Alibaba’s HK shares are expected to begin trading on Tuesday (Nov 26th)
- The changes related to the rebalancing of the MSCI indexes are expected to be implemented as of the close on Tuesday (Nov 26th)
- Bank of Korea (BoK) expected to reduce 2019 and 2020 growth forecasts at Friday’s policy meeting (local press)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- CTX.AU Planning to IPO 49% of 250 core Convenience Retail freehold sites, expected in H1 of FY20
- (AU) Australia PM Morrison: Find allegations that China tried to get an MP into parliament deeply disturbing
- (AU) Australia Treasurer Frydenberg: Disturbed by the reported efforts of China to infiltrate politics in Australia, Hong Kong and Taiwan (comments after information given by an asylum seeker) – The Age
Japan
- Nikkei 225 opened +0.8%
- 2503.JP Confirms to sell Lion Dairy in Australia to China’s Mengniu Dairy for ¥45.6B
- JGB Japan said to be considering increasing 40-year bonds for FY20, Japan’s MOF may discuss raising 40-yr issuance by up to several hundred billion yen y/y; MOF said to also plan to discuss whether to lower issuance of 5 and 10-yr JGBs – Japanese Press
- (JP) IMF Chief Georgiev: Japan’s economy is resilient – speaking from Japan ahead of IMF’s article IV economic report on Japan
- (JP) Japan Econ Min Nishimura: Will pursue mid-term to long-germ structural reforms
- (JP) Japan Chief Cabinet Sec Suga: Not true that the Govt has apologized to South Korea, implementing export controls is not linked to Gsomia
Korea
- Kospi opened +0.7%
- (KR) South Korea Vice Fin Min Kim: Will take steps to stabilize financial and FX markets if needed
- (KR) North Korea leader Kim visit military site urges the army to be prepared for regular mobilization and will increase “war like” drills
- (KR) Bank of Korea (BOK) expected to cut its 2019 and 2020 GDP outlook Friday after rate decision – Yonhap
China/Hong Kong
- Hang Seng opened +1.1%; Shanghai Composite opened 0.0%
- (HK) Hong Kong District Council election results: Pro-democracy opposition candidates parties expected win ‘overwhelming majority’ in record turnout of 71.2% of registered voters (prior 47% in 2015)
- (HK) Hong Kong Chief Exec Lam: Respect district election results; will listen to public and reflect on feedback
- (CN) China Govt raises penalties for violations of IP theft; the threshold for criminal punishments for violations will be lowered
- (CN) An ambitious ‘phase 2’ trade deal with China seen as less likely amid complications related to prelim phase one agreement – financial press
- (CN) China Ministry of Finance (MOF) said to hire banks for the issuance of $6.0B in US dollar denominated bonds, the offering might be launched by as early as Tuesday (Nov 26th); the offering is seen as a record for USD issuance by China’s MOF
- (CN) China PBOC sets Yuan Reference Rate: 7.0397 v 7.0306 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for 4th consecutive session; Net drains CNY180B v CNY0.0B prior
- (CN) China PBOC Shanghai headquarters said it would deal with growing cases of illegality involving virtual currencies – financial press
- (CN) China People’s Daily: No need to ‘manipulate’ China’s GDP figures, China’s revision to its 2018 GDP figures are part of routine practice which occurs every 5 years based on the national economic census
- (CN) According to Global Times, China and US are very close to Phase 1 deal; China remains committed to continuing talks for a phase two or even phase three deal
Other Asia
- (TH) Thailand Cabinet to consider at least a THB50B new stimulus package at tomorrows meeting – Thai press
- (SG) Singapore Oct CPI M/M: -0.4% v -0.2%e; Y/Y: 0.4% v 0.5%e
North America
- MDCO Confirms to be acquired by Novartis for $9.7B, $85.00/share cash
- TIF “LVMH has reached a deal to acquire Tiffany for $135 a share in cash. Tiffany board meeting later today to approve” – tweet by David Fabe
- HPQ Sends Letter to Xerox, Expresses Confidence in Its Own Value-Creating Opportunities and Will Not Consider Combining with Xerox Without Due Diligence
- (US) US Pres Trump fires Secretary of Navy Richard Spencer; replaces him with US Ambassador to Norway Kenneth Braithwaite
Europe
- (CH) Switzerland SNB Chief Economist Lenz: interest rates wont remain below zero forever, SNB still has downward room to make adjustments; Interest rates will turn positive again but too early to say when – Swiss press
- SSE.UK SSE and National grid confirm they have created overseas holdings companies in case Corbyn’s threat of price nationalization becomes a reality – UK press
- (EU) ECB’s Lane (Ireland, chief economist): ECB policies are in good shape for the baseline scenario of improving conditions over the next 1-2 years, but additional rate cuts can’t be ruled out
- (UK) Poll by Opinium for the Observer newspaper shows British Conservative Party’s lead over the opposition Labour Party has grown to its widest since 2017, ahead of Dec 12th election
Levels as of 12:15ET
- Hang Seng 1.6%; Shanghai Composite +0.3%; Kospi +1.0%; Nikkei225 +0.6%; ASX 200 +0.3%
- Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.2%; FTSE100 +0.0%
- EUR 1.1026-1.1017; JPY 108.81-108.64; AUD 0.6800-0.6786; NZD 0.6429-0.6405
- Commodity Futures: Gold -0.2% at $1,468/oz; Crude Oil +0.1% at $57.83/brl; Copper +0.3% at $2.66/lb
