General Trend:
- China has ordered all foreign computer equipment and software to be removed from government offices within 3 years (FT)
- Gainers in Hong Kong include energy and property shares, gaming companies decline
- Shanghai Composite trades flat; financials decline, while property and IT shares gain
- Gainers in Australia include Energy and Resources firms, consumer companies decline
- Nikkei opened higher as Iron/Steel and Marine/Transportation companies rise; Banks also rise in Japan
- Japan Q3 GDP revised upwards on better than expected domestic demand
- Dec 15th is the deadline related to the US’ new round of tariffs on China; it remains unclear if Trump will actually impose these tariffs
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.7%
- AHZ.AU Received contract from LeMaitre for 12.5K units of CardioCel and VascuCel patches for 2020
- MMS.AU Cuts FY20 underlying Net A$83-87M (prior 87-89M); Experiencing more challenging market conditions in Australia, New Zealand and UK than expected
- A2M.AU CEO Jayne Hrdlicka agrees to step down; Appoints Managing Director Geoffrey Babidge Interim CEO; Affirms FY19 rev NZ$780-800M; FY20 EBITDA margin 29-30%
- (AU) Australia sells A$1.2B v A$1.2B indicated in 1.50% June 2031 bonds, avg yield 1.1992% v 1.1042% prior, bid to cover 2.0x v 2.42x prior
Japan
- Nikkei 225 opened +0.8%
- (JP) JAPAN FINAL Q3 GDP Q/Q: 0.4% V 0.2%E; ANNUALIZED Q/Q: 1.8% V 0.6%E
- 7201.JP Japan regulator recommends fine of ~¥2.4B for false reporting – Japan press
- 9984.JP Second Vision Fund may be 30% smaller than the original Vision Fund – UK press
- (JP) Japan antitrust regulator started investigation into fees charged by interbank funds transfer system are a barrier to entry for newcomers like fintech companies – Nikkei
- (JP) Japan Nov Current Account Balance (BoP): ¥1.82T v ¥1.81Te; Adj Current Account: ¥1.73T v ¥1.73Te
- (JP) Bank of Japan (BOJ) said to consider a less optimistic assessment for industrial production vs view in Oct – financial press
Korea
- Kospi opened +0.4%
- (KR) South Korea President Moon and US President Trump held phone conversation on how to maintain diplomacy with North Korea on Saturday
- (KR) US President Trump: North Korea leader Kim could lose everything if he acts in a hostile manner, but I think he is too smart to do that – Korean press
- (KR) North Korea: Have conducted a “very important test” at its western satellite launching site; successful testing will play a key role in changing the country’s “strategic position” in the near future
- (KR) South Korea think tank KDI: South Korean economy shows a continued sluggishness due to slowing exports and weak investment
China/Hong Kong
- Hang Seng opened +0.1%; Shanghai Composite opened +0.1%
- (CN) CHINA NOV TRADE BALANCE (CNY-DENOMINATED): +274.2B V 294.0BE
- (CN) CHINA NOV TRADE BALANCE $38.7B V $44.3BE; China Nov Trade Surplus with the US: $24.6B v $26.4B m/m; YTD $272.5B; Nov exports to the US $35.6B, -23% y/y (4th consecutive decline); China imports from the US $11.0B, -2.8% y/y; Soybean Imports: 8.3Mt v 6.2Mt m/m
- (CN) CHINA NOV FOREIGN RESERVES: $3.096T V $3.100TE; Gold reserves: $9147B v $94.65B m/m; Gold reserves in Troy oz: 62.64M troy oz v 62.64M prior (2nd time in 13 month is did not rise)
- (CN) China Top Diplomat Yang Jiechi spoke with US Sec of State Pompeo Saturday morning saying the US has seriously violated international relations by passing Hong Kong and Uighur bills, and urged the US to “correct its mistakes” and “immediately stop interfering in China’s internal affairs”
- (HK) American Chamber of Commerce (AmCham) in Hong Kong President Tara Joseph (US citizen) was denied entry into Macau Saturday after being detained for 2 hours, no reason given by authorities
- (CN) China has ordered all foreign computer equipment and software to be removed from government offices within 3 years – FT
- (CN) China PBOC sets Yuan Reference Rate: 7.0405 v 7.0383 prior
- (CN) China PBoC Open Market Operation (OMO): Skips for 14th consecutive session; Net drains CNY0B v CNY0B prior
- (CN) The world’s 1st central bank digital currency is on the horizon, China expected to trial launch its official ‘crypto token’, DCEP, in places like Suzhou and Shenzhen – Global Times citing media reports
- (HK) Hong Kong protest march organizers claim turnout of 800K; Police estimate 183K; march was largely peaceful but fires were started at the entrances to the High Court and Court of Final Appeal – Hong Kong Press
North America
- (MX) Mexico deputy foreign minister for North America Seade: Negotiators are making progress on revisions to the United States-Mexico-Canada Agreement (USMCA) trade deal
- (US) House Democrats and USTR Lighthizer are nearing a deal to pass a modified agreement with Canada and Mexico – US Financial Press
Europe
- (DE) According to the Forsa poll, Germany’s Social Democrats (SPD) approval rating is not at 11%, -3ppt w/w and the lowest level since June after prior leader Nahles quit; Merkel’s conservatives were at 28%, +1ppt w/w
- (UK) General election poll: Conservatives 45%, +2ppt, Labour 31%, -2ppt – Survation poll
- (FR) France PM Philippe held special meeting Sunday about the redesign of the retirement system which is behind the massive strikes that started Thursday and look to continue in the coming days
- (EU) ECB’s Holzmann (Austria) noted he hopes to see the end of negative interest rates by the time his 6-year term ends – local press
Levels as of 12:15ET
- Hang Seng -0.1%; Shanghai Composite -0.1%; Kospi +0.3%; Nikkei225 +0.4%; ASX 200 +0.3%
- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 -0.2%
- EUR 1.1061-1.1053; JPY 108.67-108.55; AUD 0.6840-0.6829; NZD 0.6564-0.6549
- Commodity Futures: Gold -0.0% at $1,464/oz; Crude Oil -0.6% at $58.87/brl; Copper -0.5% at $2.73/lb
