Asia Market Update: Asian indices trade generally lower; China announced plan to cut import tariffs on hundreds of goods [no specific mention of US goods]; Trump commented on conversation with Xi; Aussie credit growth hit new multi-year low
General Trend:
- Shanghai listed IT names decline; China plans to cut tariffs on IT products
- China National Integrated Circuit Investment Fund (state-backed) said it plans to lower its stakes in various Chinese semiconductor companies (comments from post market close on Dec 20th)
- Shanghai property index drops over 1.2%; China reiterated that it will not use property as short-term stimulus
- Jiugui Liquor trades limit down in Shanghai, denied that it added cyclamate (artificial sweetener) to its liquor product
- Hang Seng trades flat during the early part of the session; Property firms trade generally lower, financials are mixed
- Decliners in Japan include financials and iron/steel companies
- Australian equities weighed down by Resources, Energy and Financial companies
- South Korean semiconductor related chemical firms decline (Foosung, Soulbrain); Japan eased its export controls related to photoresist shipments to South Korea
- China downwardly revised Nov trade surplus and exports
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- CTX.AU Reports intention to transition to Ampol brand, sees transition cost of A$165M over 3-years, terminates license agreement with Chevron
- (AU) Some Australia retailers said to be reducing Christmas shifts, cutting casual staff and moving up Boxing day sales on weaker than expected December sales – AFR
- PAN.AU Independent expert assessed Independence Group’s offer as fair and reasonable
- (AU) Analysts continue to suggest that QE is possible in Australia during H2 2020: JPMorgan said RBA might implement quantitative easing by Q4 2020 – US financial press
- (AU) Australia Energy Min Taylor: Govt will underwrite APA’s 220MW gas generator in Melbourne and 143Mw gas generator in Southeast Queensland
- (AU) Australia Nov Private Sector Credit m/m: 0.1% v 0.2%e; y/y: 2.3% v 2.4%e (annual pace is a new multi year low)
Japan
- Nikkei 225 opened +0.4%
- (JP) China to partially lift ban on Japan beef imports (has been in place since 2001 after mad cow outbreak)
- (JP) Japan Chief Cabinet Sec Suga: Has not eased export controls on South Korea; changes to controls are just procedural
- (JP) Japan PM Abe: Ties with South Korea continue to be difficult, ties with South Korea important in current security situation
Korea
- Kospi opened +0.2%
- 096770.KR Awarded contract to supply 500K electric vehicle batteries to Hyundai, Kia; expected to start late 2020; contract valued up to KRW10T – Korean press
- (KR) South Korea Dec 1-20th Exports y/y: -2.0% v -9.6% prior; Chip Exports y/y: -16.7% v -23.6% prior; Imports y/y: -0.5% v -11.2% prior; Exports to China y/y: +5.3% v -8.1% prior
- (KR) South Korea Financial Services Commission Chairman Eun Sung-soo calls on banks to extend more loans to small and mid-sized companies with new technologies and growth potential – Yonhap
- (KR) Bank of Korea (BOK) report notes that number of South Koreans overqualified for their current jobs has reached a record high of >30% in 2019 – Yonhap
China/Hong Kong
- Hang Seng opened +0.6%; Shanghai Composite opened -0.2%
- (CN) Another Chinese think tank said to forecast China 2020 GDP growth at 6% – Chinese press
- (CN) China to adjust import tariffs for some products starting on Jan 1 2020: Will allow 859 items to have preferential tariffs – Xinhua
- (CN) China PBOC sets Yuan Reference Rate: 7.0117 v 7.0020 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY50B in 14-day reverse repos v CNY150B prior; net injection CNY50B v injects CNY150B prior
- (CN) China Ministry of Commerce (MoFCom) to release 40.0Kt of pork reserves – Xinhua
- (CN) China MIIT sees 2019 Industrial production 5.6%
- (CN) China Housing Min: Reiterates position that it will not use property as a short-term stimulus; will develop rental housing
Other Asia
- (SG) Singapore Central Bank (MAS) consulting on scope of e-money and digital payment tokens
- (SG) Singapore Nov CPI M/M: 0.3% v 0.3%e; Y/Y: 0.6% v 0.6%e; Core CPI y/y: 0.6% v 0.7%e
North America
- BA Starliner completes first orbital flight test, failed to reach space, but had successful landing
- (CN) US President Trump: US China phase 1 trade deal will be signed “very shortly” – US financial press
Europe
- (EU) ECB’s Knot (Netherlands): In time need to reassess our monetary policy; cannot rule out worrying prospect of current low interest rates lasting another
- TSCO.UK Reportedly suspends Chinese supplier after prisoner labor report, where it has Christmas cards made – press
Levels as of 12:15ET
- Hang Seng +0.1%; Shanghai Composite -0.7%; Kospi -0.1%; Nikkei225 0.0%; ASX 200 -0.5%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 -0.0%
- EUR 1.1083-1.1073; JPY 109.53-109.38; AUD 0.6913-0.6892; NZD 0.6613-0.6597
- Commodity Futures: Gold +0.2% at $1,484/oz; Crude Oil -0.4% at $60.18/brl; Copper -0.2% at $2.79/lb
