General Trend
- Early gainers in Shanghai included Consumer, Industrial and IT firms; Property sector lagged
- Hang Seng TECH index rises over 2%
- Consumer, Energy and Financial firms rise in Australia; Iron ore producers declined as Dalian ore FUTs extended drop
- Sectors trade mixed in Japan; Topix Pharma and Retail indices rise; Decliners include Financial, Marine Transportation and Iron/Steel companies
- LG Electronics rises amid EV parts jv with Magna
- Australia’s iron ore exports declined in Nov
- China to focus on enterprise bond repayment risks in 2021
- Thailand Central Bank is expected to leave rates unchanged, currency-related comments in focus
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened +0.2%
- (AU) Australia prelim Nov Trade Balance (A$): 1.9B v 7.5B prior final; Exports M/M: 1% v 5% prior final; Imports M/M: 11% v +1% prior final
Japan
- Nikkei 225 opened +0.5%
- (JP) Japan Oct Final Leading Index: 94.3 v 93.8 prelim; Coincident Index: 89.4 v 89.7 prelim
- Bank of Japan (BOJ) Oct Monetary Policy Meeting Minutes (2 meetings ago): Members agreed that BOJ shouldn’t heditate to ease further if needed with an eye on pandemic impact on economy
Korea
- Kospi opened +0.2%
- (KR) South Korea to do targeted virus measures in place of going to lock down, starting today gatherings of more than 4 people will be banned at restaurants in the greater Seoul area – Yonhap
- (KR) 19 aircraft from China and Russia entered South Korea’s air defense identification zone (KADIZ) on Tuesday, prompting the Air Force to scramble fighter jets in response
- 066570.KR To form JV with Canada’s Magna to build electric car parts in factories in South Korea and China; The jv has been valued at $1.0B
- 066570.KR Follow Up confirms to split off some businesses related to EV parts (Canada’s Magna to hold 49% stake) in new unit for KRW501.6B
China/Hong Kong
- Hang Seng opened -0.1%; Shanghai Composite opened +0.2%
- China PBoC Open Market Operation (OMO): Injects CNY110B in 7-day and 14-day repos v Injects CNY130B prior; Net injection CNY100B v Net inject CNY120B prior
- China PBOC sets Yuan reference rate: 6.5558 v 6.5387 prior
- (CN) Policy sources said the China PBOC might reduce support for the economy in 2021 and slow credit growth; the central bank is not expected to tighten policy any time soon – financial press
- 135.HK To sell 60% stake in Beijing gas pipeline and 75% stake in Dalian LNG to PipeChina for CNY40.88B
- (CN) World Bank comments that China should not withdraw stimulus too rapidly in order to avoid a significant contraction and keep COVID recovery on tract, should maintain accommodative monetary policy; Sees 202 GDP at 2% and 2021 at 7.9%
- (CN) China PBOC sells CNY10B v CNY10.0B indicated in 6-month bills in Hong Kong, avg yield 2.7%
North America
- (US) President Trump: Coronavirus bill has unnecessary components, Asks congress to amend funding package and increase stimulus checks from $600 to $2,000
- (US) Speaker Pelosi: Democrats would support $2.0K coronavirus direct payment checks
- US Democrats said to offer a separate coronavirus relief bill to increase direct payments to $2.0K/person
- House Majority Leader Hoyer (D): Will seek unanimous consent in the house on a $2.0K direct aid payment for coronavirus stimulus this week
- (US) Weekly API Crude Oil Inventories: +2.7M v +2.0M prior
Europe
- (UK) EU’s Barnier reportedly rejected latest fisheries offer from UK but is willing to continue talks to the end of year or beyond – French press
- (UK) Agreement on an EU/UK Trade deal is possible on Wednesday (Dec 23rd) – ITV
- (UK) France has told EU officials that travel links to the UK will reopen by midnight ; UK and France agree on mass COVID testing for truck drivers
- (UK) Expected to place additional areas on Tier 4 lockdown (most strict) after Christmas, with a high chance for a national lockdown in the new year – Telegraph
- (US) President Trump has modified certain duties on some goods in the EU Tariff Pact – press (headline only)
Levels as of 12:15ET
- Hang Seng +0.6%; Shanghai Composite +1.0%; Kospi +0.8%; Nikkei225 +0.4%; ASX 200 +0.6%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 -0.2%
- EUR 1.2192-1.2154; JPY 103.65-103.44; AUD 0.7556-0.7518; NZD 0.7057-0.7030
- Commodity Futures: Gold +0.1% at $1,872/oz; Crude Oil -1.6% at $46.27/brl; Copper +0.4% at $3.53/lb
