NZ Announced Stimulus Plan And Lower GDP Growth Forecast

General Trend:

• Hang Seng trades flat during the morning session; Utilities rise while property and financial companies trade mixed, gaming shares decline
• Shanghai shares were also range bound in early trading; Financials rise after better than expected Nov bank lending data, healthcare index drops amid more speculated drug price cuts
• Japanese equities weighed down by the trade-sensitive Marine/Transportation sector; banks and brokerage firms also drop
• Australian equities outperform as energy and telecom firms rise
• Japan’s Q4 BSI Large Manufacturing index worsens; BoJ quarterly Tankan survey due on Friday (Dec 13th)
• South Korea’s exports rise in early Dec amid strength in demand for wireless equipment and passenger cars, chip exports extend decline [In Nov, South Korea’s exports declined for the 12th straight month]
• Asian Development Bank (ADB) cut China’s 2020 GDP growth forecast to below 6.0%; There has been prior press speculation that China might set its 2020 growth target at around 6.0% at the Central Economic Work Conference
• China’s Central Economic Work Conference is expected to end on Thursday (Dec 12th)
• US Fed rate decision due later today (Dec 11th)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened 0.1%
• AU) Australia Dec Westpac Consumer Confidence Index: 95.1 v 97.0 prior; M/M: -1.9% v 4.5% prior; Current conditions 98.4, -2.8% m/m; Expectations 93.0, -1.3% m/m
• (NZ) New Zealand Nov Total Card Spending M/M: 1.0% v -0.2% prior; Retail Card Spending M/M: 2.6% v 0.5%e
• (AU) Australia sells A$500M v A$500M indicated in 2.75% April 2024 bonds, avg yield 0.7492%, bid to cover 3.54x
• (NZ) New Zealand Treasury issues Half-Year Economic and Fiscal Update: Cuts 2020 GDP to 2.3% v 3.2% prior; announces NZ$12B extra spending on mostly infrastructure
• (AU) Australia Prudential Regulation Authority: No evidence to suggest that lending standards are declining as the property market gets hotter, if things change will not hesitate to increase restrictions

Japan

• Nikkei 225 opened +0.1%
• (JP) JAPAN Q4 BSI LARGE ALL INDUSTRY Q/Q: -6.2 V 1.1 PRIOR; LARGE MANUFACTURING Q/Q: -7.8 V -0.2 PRIOR
• (JP) Japan FY19/20 tax rev will come in lower that initial estimates by ¥2.3-2.5T, govt expected to issue additional deficit covering bonds with ¥2.0T to fill budget shortfall – Nikkei
• (JP) Japan Nov PPI (CGPI) M/M: 0.2% v 0.1%e Y/Y: 0.1% v 0.0%e
• (JP) Moody’s: 2020 outlook for Japan banks and brokerage firms is negative; notes ultralow Japanese interest rates and demographics
• (JP) Japan Chief Cabinet Sec Suga: Reiterates that PM Abe will meet with China Pres Xi during his visit to China; the government is paying close attention to the economy after the sales tax hike
• (JP) Bank of Japan (BOJ) expect sizable impact from PM Abe economic package, expected to raise the chance of a higher BOJ GDP forecast in January

Korea

• Kospi opened 0.0%
• (KR) South Korea Nov Unemployment Rate: 3.6% v 3.5%e
• (KR) South Korea approves KRW512.3T 2020 budget v the proposed KRW513.5T made in Aug by the Finance Ministry – Korean press
• (KR) South Korea Govt may cut GDP forecast to 2.3% (prior 2.6%) – Korean press
• (KR) South Korea will increase surveillance on North Korea preparations for the possible launch of an intercontinental ballistic missile – Korean press

China/Hong Kong

• Hang Seng opened -0.1%; Shanghai Composite opened +0.2%
• (CN) US White House Trade Advisor Navarro: No indication that Dec tariffs won’t be put into place; China is trying to shape the narrative on the trade talks; it is up to China as to whether or not we get a deal – speaking on Fox News
• (CN) China PBoC Open Market Operation (OMO): Skips for 16th consecutive session; Net drains CNY0B v CNY0B prior
• (CN) China PBOC sets Yuan Reference Rate: 7.0385 v 7.0400 prior
• (CN) Asia Development Bank (ADB) now sees China 2019 GDP at 6.1% (prior 6.2); 2020 at 5.8% (prior 6.0%)
• (CN) Undisclosed foreign sovereign fund to invest $3.0B into China stock market – China press

Other Asia

• (PH) Philippine DBCC adjusts targets in light of recent developments: 2019 CPI 2.4% (prior 2.5%); cuts 2019 GDP 6.0-6.5% (prior 6-7%)

North America

• (US) Weekly API Oil Inventories: Crude: +1.4M v -3.7M v prior
• (MX) Mexico deputy foreign minister for North America Seade: Mexico senate may need until January to get USMCA changes passed
• (US) Sen Maj Leader McConnell (R-KY): Senate will not be finishing USMCA deal this year; USMCA will have to follow any impeachment trial
• (US) White House insists it will ‘push hard’ for passage of USMCA deal by end of the year – press
• T COO Stankey: Enters $4B accelerated share buyback; to retire 100M shares in Q1 2020 (as speculated on Dec 3rd); Affirms targeting additional 4% in cost reductions in 2020 or about $1.5B

Europe

• (UK) YOUGOV/TIMES MRP GENERAL ELECTION POLL: TORIES ON TRACK FOR 339 SEATS, LABOUR PARTY ON TRACK FOR 231 SEATS (PRIOR TORIES 359 SEATS, LABOUR PARTY 211 SEATS); Would give Tories a majority of 28 seats in the House of Commons

Levels as of 12:15ET

• Hang Seng +0.3%; Shanghai Composite +0.2%; Kospi +0.3%; Nikkei225 -0.2%; ASX 200 +0.7%
• Equity Futures: S&P500 -0.1%; Nasdaq100 -0.0%, Dax -0.1%; FTSE100 +0.1%
• EUR 1.1097-1.1088; JPY 108.84-108.67; AUD 0.6818-0.6804; NZD 0.6556-0.6522
• Commodity Futures: Gold -0.0% at $1,467/oz; Crude Oil -0.5% at $58.95/brl; Copper -0.1% at $2.76/lb