General Trend:
- Some Asian chip-related shares rise after results from Micron
- Hang Seng underperforms in early trading, decliners include tech firms and financials
- IT and Telecom Services firms are among the decliners in Shanghai
- Japanese markets drop as brokerage firms decline after gains seen on Wed, Marine/Transportation sector extends losses
- The energy sector weighs on Australian equity market
- Little impact seen on Kiwi from New Zealand’s Q3 GDP data, some analysts continue to expect 2020 rate cut from the RBNZ
- NZ swap market is pricing in a less than 10% chance of RBNZ rate cut in Feb following the GDP data (US financial press)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened flat
- (AU) AUSTRALIA NOV EMPLOYMENT CHANGE: +39.9K V +15.0KE; UNEMPLOYMENT RATE: 5.2% V 5.3%E; Part Time Employment Change: +35.7K v -14.3K prior
- (NZ) NEW ZEALAND Q3 GDP Q/Q: 0.7% V 0.5%E; Y/Y: 2.3% V 2.3%E
- (NZ) New Zealand Nov Trade Balance (NZ$): -0.75B v -0.70Be
- (NZ) New Zealand Fin Min Robertson: Economy is entering 2020 in good shape
- WBC.AU Fined A$9.15M by Federal Court for poor financial advice given by a planner
- (NZ) New Zealand Gov’t: Reappoints Neil Quigley as RBNZ Chair for 2-year term; appoints Fiona Mules to RBNZ board
- (AU) South Australia government plans to end moratorium on genetically modified crops in 2020 – US financial press
Japan
- Nikkei 225 opened -0.1%
- (JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; Adjusts wording on overseas risks
- (JP) Bank of Japan (BOJ) introduces ETF lending facility, to improve liquidity in ETF market; ETF lending duration will not exceed 1-year
- 4503.JP FDA granted accelerated approval to Padcev (enfortumab vedotin-ejfv)
- 3938.JP Line, Mercari and KDDI planning to end mobile payment alliance, due to Line’s merger with Yahoo Japan – Nikkei
- 4217.JP Showa Denko to launch ¥4,630/shr bid to acquire Hitachi Chemical; deal valued at ¥964B
- (JP) Japan PM Abe Adviser Hamada: BOJ must avoid a situation where interest rates become too low and do more harm then good to the economy, negative rates hurt financial institutions, BOJ and Govt must coordinate
- (JP) Japan PM Abe: 2020/21 will be the 8th consecutive year of reducing bond issuance
- (JP) Japan FY20 budget expected to be more than ¥100T for the 2nd consecutive year – financial press
Korea
- Kospi opened +0.2%
- (KR) South Korea National Pension and SK have formed KRW1.0T Vietnam fund – Korean press
- (KR) US negotiator DeHart: Not focused on the initial requested $5.0B defense cost sharing in talks with South Korea right now; South Korea’s weapons purchases from the US are an “important consideration for us in the burden-sharing context” – Yonhap
- (KR) China Vice Foreign Min Luo: Tensions have risen somewhat in relation to North Korea, overall issue has not deviated from track of dialogue and consultation
- (KR) South Korea Finance Ministry cuts 2019 and 2020 GDP growth forecasts (as expected): Cuts 2019 GDP growth forecast from 2.4-2.5% to 2.0%; Cut 2020 GDP growth forecast from 2.6% to 2.4%
China/Hong Kong
- Hang Seng opened +0.1%; Shanghai Composite opened flat
- (CN) According to Economic Information Daily it is expected that China PBOC will fine tune measures and use targeted stimulus to support the real economy in 2020 – Xinhua
- (CN) Former PBOC official Sheng Songcheng said whether China will maintain 6% growth is no longer a valid question, China to have at least 6% GDP growth in 2020 – Chinese press
- (CN) China planning local Govt special bond offering in early January – China press
- (CN) China Nov Swift Global Payments (CNY): 1.93% v 1.65% prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY280B in 7-day and 14-day reverse repos v injects CNY200B in 7-day and 14-day prior; Net injection CNY280B v CNY200B injected prior (largest injection since Jan 17th)
- (HK) Hong Kong government expected to reduce 10-year housing supply target to 430K flats [down from prior target of 450K units], notes slowing growth in the number of households – SCMP
- (CN) China PBOC sets Yuan Reference Rate: 7.0025 v 6.9969 prior
- (CN) China Foreign Ministry Vice Min Luo Zhaohui confirms President Xi will meet South Korea Moon and Japan PM Abe in Beijing
North America
- (US) House of Representatives votes to impeach Pres Trump: Article 1 Abuse of Power, passes ; Article 2 Obstruction passes
- (US) Weekly API Oil Inventories: Crude: +4.7M +1.4M prior
- MU Reports Q1 $0.48 v $0.49e, Rev $5.14B v $5.03Be; Optimism for FQ2-20 Bottom with Continued Recovery in 2HCY20 – earnings presentation
- (CN) US President Trump: We made a great deal with China, gives us a lot og currency to do the phase 2 deal – speaking at rally
Europe
- (UK) Bank of England (BOE): Recently identified that an audio feed of certain bank press conferences has been misused by third party supplier since earlier in 2019 – financial press
Levels as of 12:15ET
- Hang Seng -0.6%; Shanghai Composite -0.2%; Kospi -0.2%; Nikkei225 -0.3%; ASX 200 -0.3%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.2%; FTSE100 0.0%
- EUR 1.1133-1.1113; JPY 109.69-109.53; AUD 0.6882-0.6848; NZD 0.6596-0.6577
- Commodity Futures: Gold +0.2% at $1,481/oz; Crude Oil -0.1% at $60.80/brl; Copper -0.3% at $2.80/lb
