South Korean Yields Decline After BoK Rate Decision

General Trend:

• Financials weigh on Hang Seng, drug companies decline after China’s recently disclosed price cuts
• Healthcare companies also drop in Shanghai
• Aussie equities continue to outperform after Tuesday’s speech from RBA Gov Lowe, ASX 200 hits record high amid gains in Telecom and Energy companies
• One BoK member called for rate cut at today’s policy decision, central bank statement removed the reference to watching the effects of recent rate cuts for the time being
• Japan Oct prelim industrial production declined more than expected, government noted ‘weakness’ in industrial production
• US markets to close early on Friday after Thursday’s Thanksgiving Day holiday
• Bank of Japan (BOJ) may release its Dec bond purchase schedule after today’s market close
• Reserve Bank of Australia (RBA) due to meet on Tuesday (Dec 3rd)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.1%
• (AU) Australia Oct Private Sector Credit M/M 0.1% v 0.3%e; Y/Y: 2.5% v 2.7%e (slowest growth pace since 2010)
• (NZ) New Zealand Nov Consumer Confidence Index: 120.7 v 118.4 prior; M/M: 1.9% v 4.0% prior
• (NZ) New Zealand Oct Building Permits m/m: -1.1% v 7.4% prior
• (NZ) New Zealand 4-month Financial Statements through end of Oct 2019: Operating balance before gains and losses (OBEGAL): -NZ$1.1B v +NZ$843M forecast [Core Crown tax revenue for the four months to October 2019 was $1.4 billion (4.9%) below the BEFU 2019 forecast, mainly owing to below-forecast corporate tax revenue ($1.5 billion below forecast)]
• (NZ) New Zealand Finance Min Robertson said there is space for infrastructure investment, strong debt position gives us space to invest – US financial press

China/Hong Kong

• Shanghai Composite opened -0.1%, Hang Seng -0.7%
• (CN) China PBoC Dep Research Head: China still has room in monetary policy; monetary policy room cannot be squandered
• (CN) China Global Times Editor-in-chief Hu Xijin: Based what I know, out of respect for President Trump, the US and its people, China is considering to put the drafters of the Hong Kong Human Rights and Democracy Act on the no-entry list, barring them from entering Chinese mainland, Hong Kong and Macao.
• (US) USTR lists products eligible for Chinese tariff exclusion for tariffs imposed on Chinese products in September 2018 – press
• (CN) China State Council: Will probably resolve trade frictions; To step up punishment for intellectual property infringement (from Nov 28th)
• (CN) China PBOC sets Yuan Reference Rate: 7.0298 v 7.0271 prior
• (CN) China PBoC Open Market Operation (OMO): Skips for 8th consecutive session; Net drains CNY0B v CNY0B prior
• (CN) China plans nationwide 3-month safety inspections of coal mines – press

Japan

• Nikkei 225 opened +0.4%
• (JP) Japan Oct Preliminary Industrial Production M/M: -4.2% v -2.0%e (matches weakest figure since Jan 2018); Y/Y: -7.4% v -5.2%e
• (JP) Japan Nov Tokyo CPI Y/Y: 0.6% v 0.6%e; CPI Ex-Fresh Food Y/Y: 0.6% v 0.6%e
• (JP) JAPAN OCT JOBLESS RATE: 2.4% V 2.4%E
• (JP) Japan BOJ Gov Kuroda: Reiterates economy is expanding moderately as a trend, currently appropriate to carry out policy with easing in mind – speaking in Parliament
• (JP) Bank of Japan Exec Maeda: BOJ would have unrealized loss with Topix at 1,350 – speaking to Diet
• (JP) Senior Bank of Japan (BOJ) Official: BOJ is guiding easy monetary policy with eye on risk that excessive decline in super-long bond yields could hurt public sentiment
• (JP) JAPAN NOV CONSUMER CONFIDENCE INDEX: 38.7 V 36.8E
• (JP) JAPAN OCT ANNUALIZED HOUSING STARTS: 879K V 880KE; Y/Y: -5.6% V -7.0%E

Korea

• Kospi opened +0.3%
• (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.25%; AS EXPECTED
• (NK) North Korea said to have launch two projectiles but likely fell outside the EEZ (exclusive economic zone) of Japan- financial press (from Nov 28th)
• (KR) South Korea Trade Min: Has agreed to hold senior level talks with Japan during the third week of Dec
• (KR) South Korea Oct Industrial Production M/M: -1.7% v -0.3%e ; Y/Y: -2.5% v -2.5%e

Other Asia

• (VN) Vietnam Nov Trade Balance: $0.1B v $0.5Be; Exports Y/Y: 3.8% v 7.3%e
• (VN) Vietnam Nov CPI Y/Y: 3.5% v 2.9%e
• (VN) Vietnam Nov Industrial Production Y/Y: 5.4% v 9.2% prior
• (TH) Thailand Dep Premier Samkid and Hong Kong Chief Exec Lam have signed MOUs at first meeting of the Hong Kong-Thailand High-Level Joint Committee; hopes to see two-way trade volume increase to $20B in 2020 v $15B in 2019

Europe

• (EU) ECB’s Lane (Ireland, chief economist) said rate normalization can be accelerated by fiscal policy
• (EU) ECB’s Coeure (France) said climate change will impact conduct of monetary policy
• (UK) Nov GfK Consumer Confidence: -14 v -14e

Levels as of 12:15ET

• Hang Seng -2.2%; Shanghai Composite -0.8%; Kospi -1.4%; Nikkei225 -0.5%; ASX 200 -0.3%
• Equity Futures: S&P500 -0.3%; Nasdaq100 -0.4%, Dax -0.3%; FTSE100 -0.3%
• EUR 1.1024-1.1007; JPY 109.59-109.45; AUD 0.6777-0.6764; NZD 0.6429-0.6416
• Commodity Futures: Gold +0.2% at $1,464/oz; Crude Oil -0.3% at $57.96/brl; Copper -0.2% at $2.67/lb