General Trend:
- Markets generally opened higher led by the tech sector, markets gained further when China reported trade talks with US took place earlier that morning, Hang Seng paired back its opening gains after HK Lam comments did not give any indication on a path forward with protesters even with pro-democracy candidates securing overwhelming majority in district council elections
- Alibaba Hong Kong IPO opens for trade today at HK$187/she v pricing of HK$176/shr
- China and US officials spoke on the phone today and reached an agreement on moving forward with phase 1 trade deal according to Xinhua
- Australian companies continue to hold their AGMs with most affirming their guidance and noting a challenging environment
- China issued its financial stability report
- NZD took a pop after Q3 retail sales came in at the highest level since Q4 2018 and much higher than expected
- Fed Chair Powell spoke from Rhode Island dinner saying that the economy is in good shape with policy well positioned to support a strong labor market and inflation returning to 2%, reiterates if the outlook changes then Fed will adjust policy
- RBA Assistant Gov Debelle noted that higher wage growth is needed to reach inflation target
- Looking ahead: Waiting for comments from RBA Gov Lowe at 20:05 AEDT called “Unconventional Monetary Policy: Some Lessons from Overseas – at Annual ABE Dinner, Sydney”
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- (AU) Reserve Bank of Australia (RBA) Asst Gov Debelle: Higher wages growth needed to reach inflation target; supply driven by rise in participation rates of females and older workers – Employment and Wages – at the 2019 ACOSS National Conference
- WBC.AU CEO Brian Hartzer stepping down, appoints CFO Peter King acting CEO, effective Dec 2nd; Chairman to retire in H1 2020
- (NZ) NEW ZEALAND Q3 RETAIL SALES Q/Q: 1.6% V 0.5%E (largest gain since Q4 2018)
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 106.8 v 109.9 prior
- CTX.AU Couche-Tard raises non-binding indicative conditional offer to A$34.50/shr cash (prior A$32.00/shr cash)
- QAN.AU To cut ‘hundreds’ of jobs before year end, expected to be mostly head office roles – Australia Press
- (AU) Australia Treasurer Frydenberg: Important financial industry upholds high standards; Westpac remains vital part of economy, but there needs to be accountable
Japan
- Nikkei 225 opened +0.7%
- 7201.JP Incoming CEO Uchida to brief press Dec 2nd
- (JP) Japan Fin Min Aso: Japan needs to keep market trust in government finances; wants to achieve economic growth and fiscal health; market trust is key reason why JGB yields haven’t spiked; no decisions on extra budget yet
- (JP) Japan Oct PPI Services y/y: 2.1% v 1.6%e
- 4217.JP Said to have granted Showa Denko right of first refusal to acquire Hitachi Chemical unit in a potential $8.7B deal – Nikkei; Follow Up: 4217.JP Showa Denko confirms considering purchasing stake in Hitachi Chemical
- 4217.JP Showa Denko expected to begin tender for Hitachi Chem in mid-Dec – Japan Press
- (JP) Japan MoF sells ¥399.6B v ¥400B indicated in 0.50% 40-year JGBs, highest accepted yield 0.460% v 0.435% prior, bid to cover: 3.50x v 2.69x prior
- (JP) Japan Iron and Steel Federation Chairman: Coking coal market may get tighter starting in January, as China may increase imports due to environmental regulations on local coal production
Korea
- Kospi opened +0.2%
- (KR) North Korea conducted firing drills on Nov 23; S. Korea to send a complaint about the drills – Yonhap
- (KR) South Korea sells 30-year Govt bonds; avg yield 1.635% v 1.750% prior
- (KR) South Korea and the Association of Southeast Asian Nations (ASEAN) agreed to upgrade their bilateral strategic partnerships on regional and global issues – joint response
China/Hong Kong
- Hang Seng opened +0.7%; Shanghai Composite opened +0.2%
- (CN) China Vice Premier Liu He and USTR Lighthizer have reached consensus on solving issues and agree to keep in contact regarding Phase 1 trade deal via phone call on Nov 26 – Xinhua; US officials also later confirmed the call but did not gives specifics
- (CN) China Global Times: US and China may have discussed tariff removal, agricultural purchase and possible face-to-face meeting in today’s earlier call
- (CN) China PBOC financial stability report: China needs to resolve outstanding financial risks, and must counter risks from abnormal market fluctuations that stem from external shocks; reiterates will maintain a proactive fiscal policy and a prudent monetary policy (after the close yesterday)
- (CN) China PBOC Party Chief Guo Shuqing: Will further curb property bubbles and stabilize house prices
- (HK) China said to be considering replacing the official liaison to Hong Kong Wang Zhimin – China press
- (CN) China 3-year USD bond offering pricing seen +60bps area, 5-year at +65bps area, 10-year +70bps area and 20-year at +80bps area
- (CN) China Fin Min: Will launch overseas USD sovereign bond issuance later today, Tues Nov 26; size to exceed that of previous years
- (CN) China PBOC sets Yuan Reference Rate: 7.0344 v 7.0397 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for 5th consecutive session; Net drains CNY120B v CNY180B prior
Other Asia
- (TW) Taiwan Stock Exchange chairman Hsu Jan-yau: Targeting to IPO 24 companies in 2020 v 31 who have IPOd since Oct of 2019 – Taiwan press
North America
- (US) House Speaker Pelosi: We are within range of a ‘substantially improved’ trade agreement with Mexico; need written report from USTR Lighthizer regarding USMCA deal for final review
- (US) Fed Chair Powell: Policy appropriately provided; supporting decisive return to 2% inflation and Fed goals; If outlook changes materially, policy will change as well
- (US) Supreme Court issues fast briefing to keep President Trump’s financial documents private for now, gives Trump until Dec 5 to file appeal
- DIS Disney+ app has been downloaded 15.5M times and had over $5.0M in-app purchases in the first 13-days, and is adding 1.0M+ subscribers easy day – NY Post
- (MX) Mexico Central Bank (Banxico) Deputy Gov Heath:Technical recession isn’t significant; sees economy improving in 2020; indicators show household consumption slump won’t last
Europe
- (UK) ICM UK General election poll: Conservative Party 41% (-1), Labour 34% (+2), Lib Dems 13% (unch), Brexit Party 4% (-1)
Levels as of 12:15ET
- Hang Seng +0.1%; Shanghai Composite +0.1%; Kospi +0.8%; Nikkei225 +0.6%; ASX 200 +0.8%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.2%; FTSE100 +0.2%
- EUR 1.1017-1.1007; JPY 109.19-108.91; AUD 0.6786-0.6772; NZD 0.6424-0.6405
- Commodity Futures: Gold -0.2% at $1,461/oz; Crude Oil 0.0% at $58.00/brl; Copper -0.1% at $2.66/lb
