Equities Opened Generally Higher After US Gains

General Trend:

• Asian chipmakers trade generally higher after US gains; Samsung and Hynix each rise over 2% in South Korea, Taiwan Semi trades at an all-time high
• Hang Seng outperforms as tech and financial firms gain
• Financials weigh on Shanghai Composite in early trading
• Gainers in Japan include Real Estate and Electric Appliances companies, financials trade generally lower
• Australian equities underperform amid weakness in telecoms and financials; Westpac declines as board holds shareholders’ meeting
• Asian currencies trade generally higher after Fed decision and comments, track equity market gains
• Japan government cut assessment of machinery orders after weaker than expected Oct data
• China’s Central Economic Work Conference is expected to end later today, government official confirmed 2020 GDP growth might be targeted at 6.0%
• China generally issues a briefing after the conclusion of the economic work conference
• China government researcher suggested that iron ore demand may decline in 2020
• China auto association CAAM expects vehicle sales decline to accelerate in 2019 (2nd straight annual decline)
• US and China discussions said to now be focused on reducing rates on existing tariffs as part of a phase 1 agreement (HK press) [Reminder: On Dec 5th, China Commerce Ministry (MOFCOM) Spokesperson Gao Feng then said if the two sides reach a phase 1 agreement then tariffs should be reduced]
• China Commerce Ministry (MOFCOM) sometimes holds weekly press conference on Thursdays (comments generally seen during early European morning)
• Lagarde’s first ECB rate decision and post-rate decision press conference seen later today

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.1%
• WBC.AU Board says ‘deeply distressed’ about issues raised by Austrac in its statement of claim from Nov 20th; operating conditions to continue to be soft, with growth remaining low, interest rates expected to fall further, and ongoing regulatory intensity – AGM statement
• (NZ) Reserve Bank of New Zealand (RBNZ): Yuan weighting in trade weighted index rose to 22.9% v 21.1% prior

Japan

• Nikkei 225 opened +0.3%
• (JP) JAPAN OCT CORE MACHINE ORDERS M/M: -6.0% V 0.5%E (4th consecutive decline, longest streak since Oct 2008-Jan 2009); Y/Y: -6.1% V -1.9%E
• (JP) Japan Government to cut machinery orders assessment after Japan Oct Machine Orders significantly missed expectations; machinery orders showing signs of stalling
• 6502.JP CFO: Net profit next year is ‘not impossible’ – Japan Press
• 6740.JP Considering new sources of funding including talks with Ichigo Asset Management for ¥90B investment at today’s board meeting
• (JP) Bank of Japan (BOJ) Dep Gov Amamiya: Will continue to conduct appropriate policy; most important issue for BOJ that warrants attention is downside risks to domestic economy; reiterates will not hesitate to ease if risks rise
• (JP) Japan said to be planning to adjust JGB auction to curb unintended surplus

Korea

• Kospi opened +0.%
• (KR) Bank of Korea (BOK) Deputy Chief Yoon: Global uncertainty is seen decreasing; Fed decision was in line with market expectations
• (KR) South Korea and Germany will open a joint R&D center to further promote bilateral cooperation and penetrate deeper into new lucrative industries such as material and part industries – Yonhap
• (KR) South Korea, Japan, and China Foreign Min to meet Dec 13th
• (KR) Bank of Korea (BOK) Statement: Sees rate cut from July and Oct feeding through in capital markets, reiterates to maintain accommodative policy as growth is forecast to be slow and inflationary pressures are to stay low

China/Hong Kong

• Hang Seng opened +0.7%; Shanghai Composite opened +0.1%
• (US) Pres Trump likely to meet with his advisors on Thursday to discuss the scheduled levying of additional tariffs on China goods on Dec 15; Officials also said to have been arguing that the previous tariffs had had a muted impact on the US economy – US Financial Press
• (CN) China PBoC Open Market Operation (OMO): Skips for 17th consecutive session; Net drains CNY0B v CNY0B prior
• (CN) China PBOC sets Yuan Reference Rate: 7.0253 v 7.0385 prior
• (CN) China Govt Research Body: Sees 2019 China steel demand 886Mt, +7.3% y/y; 2020 demand 881Mt, -0.6% y/y
• (CN) China Industry Ministry Official: Sees 2019 GDP at 6.1-6.2%; 2020 at 6.0%; 2019 industrial production 5.5-5.6%
• (CN) China expects US to delay planned Dec 15th tariffs and they are in communication daily on Phase 1 trade deal, focus thought to be on reducing the rate of existing tariffs – HK press
• (CN) China NDRC Researcher Li Shigang: China deficit to GDP ratio may exceed 3% in 2020 [a ratio of 3% has been speculated vs 2.8% in 2019]

Other Asia

• 2330.TW Reports Nov Sales NT$107.9B, +9.7% y/y

North America

• (US) Fed Chair Powell: US economic outlook remains favorable in the 11th year of the expansion – post rate decision press conference
• (US) Fed Chair Powell: repos are important operational matters but unlikely to have any macroeconomic implications – post rate decision Q&A
• (US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 1.50-1.75%; AS EXPECTED; DOT PLOT SIGNALS RATE HOLD THROUGH 2020

Europe

• (UK) NOV RICS HOUSE PRICE BALANCE: -12% V -5%E
• (UK) General Election Poll: Conservatives 44.5%, -0.5ppt; Labour: 33.7%, +2.7ppt – Survation poll
• Looking ahead: UK elections to take place today, Dec 12th , polls close at 22:00 local time

Levels as of 00:20 ET

• Nikkei 225, +0.2%, ASX 200 -0.7%, Hang Seng +1.3%; Shanghai Composite -0.1%; Kospi +1.3%
• Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax flat; FTSE100 +0.1%
• EUR 1.1145-1.1127 ; JPY 108.59-108.45 ; AUD 0.6890-0.6866 ;NZD 0.6593-0.6578
• Gold +0.3% at $1,479/oz; Crude Oil +0.2% at $58.89/brl; Copper +0.2% at $2.797/lb