General Trend:
- Gainers in Shanghai include property and telecom services companies
- Large banks rise in Shanghai as China 10-year gov’t bond yield rises
- Chinese brokerage firms trade broadly higher, China may release revised securities law by the end of 2019 (local press)
- Hang Seng supported by gains in tech companies and financials – Japanese advertising-related firm Dentsu declines over 5% after cutting outlook, noted challenges within the international business
- Japan Post Insurance drops over 3%; Japanese regulator said to consider requiring the company to suspend insurance sales [the firm previously said it mis-sold certain insurance policies]
- GBP/USD declines amid Brexit-related news
- China official said inflation may be ‘a bit high’ at start of 2020, reiterated pledge to release additional frozen pork supplies
- RBA Dec Minutes: Agreed that it would be important to reassess economic outlook in Feb 2020
- New Zealand business confidence rose to highest level since 2017 in Dec, manufacturing sector noted
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.1%
- WBC.AU APRA announces A$500M increase in Westpac capital requirements, effective immediately; to “reflect the heightened operational risk profile of the bank; also starts investigation for possible breaches of banking laws
- WBC.AU Responds to APRA capital requirement increase: Will cut Level 2 CET1 ratio by 16bps
- LYC.AU Guides FY19 NPDR production similar y/y; did not get approval from Malaysia to increase lanthanide concentrate processing limit
- (AU) Australia 2019/20 Treasury bond issuance to be ~A$55B (prior A$58B seen in April)
- NST.AU Confirms to acquire 50% stake in KCGM Super Pit for $800M; earnings accretive from first full financial year FY21; funded via A$480M in debt, A$765M institutional placement and a share purchase plan targeting up to A$50M
- (AU) RESERVE BANK OF AUSTRALIA (RBA) DEC MINUTES: Members agreed that it would be important to reassess the economic outlook in February 2020, when the Bank would prepare updated forecasts; Board had the ability to provide further stimulus to the economy, if required. Members also agreed that it was reasonable to expect that an extended period of low interest rates would be required in Australia
- (AU) AUSTRALIA OCT HOME LOANS M/M: 2.0% V 3.6% PRIOR; INVESTMENT LENDING: 1.4% V -4.0% PRIOR
Japan
- Nikkei 225 opened +0.6%
- 4324.JP Cuts Net income to ¥6.2B (prior ¥35.8B), Op ¥60.9B (prior ¥98.5B), To cut 1.4K jobs in UK, Singapore and 5 other places (reduce global headcount by 3%)
- (JP) Japan Trade & Industry (METI) Min Sugawara: Talks with South Korea on export controls have ended; both sides agreed to continue dialogue
- (JP) Japan Econ Min Kajiyama: Could wind back South Korea export controls through talks
- (JP) Japan Economy Min Nishimura: Hope Japan exports and industrial production to improve following US/China trade agreement
- (JP) Japan MoF sells ¥900B v ¥900B indicated in 0.30% 20-year bonds; avg yield 0.2860% v 0.266% prior; bid to cover 4.10x v 4.21x prior
Korea
- Kospi opened +0.5%
- (KR) China and Russia have proposed draft to UN Security Council to lift sanctions on North Korea; US has rejected the proposal
- (KR) South Korea President Moon to name Chung Sye-Kyun as PM – local press
China/Hong Kong
- Hang Seng opened +0.5%; Shanghai Composite opened flat
- (CN) China PBOC may implement 2 ‘targeted’ RRR cuts in 2020 – Chinese press
- (CN) China PBoC Open Market Operation (OMO): Skips for 20th consecutive session; Net drains CNY0B v CNY0B prior
- (CN) China PBOC sets Yuan Reference Rate: 6.9971 v 6.9915 prior
- (CN) China NDRC: China has the confidence and conditions to reach 2019 economic targets: 2019 CPI is within 3% range; CPI may be a bit high at the start of 2020
- (CN) China President Xi: Reiterates support for Hong Kong Chief Exec Lam
- (CN) Six privately owned companies in one of China’s wealthiest provinces, Shandong, have defaulted on their debt or come very close within the last 3-months – press
Other Asia
- (SG) SINGAPORE NOV NON-OIL DOMESTIC EXPORTS M/M: 5.8% V +5.8%E; Y/Y: -5.9% V -6.4%E; Electronic Exports Y/Y: -23.3% v -19.7%e
North America
- BA Confirms to suspend 737 MAX Production, will not layoff or furlough any employees; maintains dividend at $2.055/shr
- JNJ California jury dismissed claims talc powered caused cancer
- (US) Congress finalizes $1.3T package which will avoid a Govt shutdown – press
Europe
- (UK) PM Johnson looking to legally prevent Brexit from going past 2020 and said to make the promise to EU that UK will leave by the end of January with or without a trade deal – UK press
Levels as of 12:15E
- Hang Seng +1.1%; Shanghai Composite +1.4%; Kospi +1.1%; Nikkei225 +0.4%; ASX 200-0.0 %
- Equity Futures: S&P500 0.0%; Nasdaq100 +0.1%, Dax -0.1%; FTSE100 -0.1%
- EUR 1.1156-1.1134; JPY 109.63-109.50; AUD 0.6886-0.6862; NZD 0.6605-0.6588
- Commodity Futures: Gold +0.1% at $1,481/oz; Crude Oil 0.0% at $60.12/brl; Copper +0.1% at $2.81/lb
