Modest Equity Losses Generally Seen Ahead Of US CPI Data

Dec 10 21, 06:34 GMT

General trend

Will China announce additional FX measures?
USD index trades slightly lower.
South Korea 3-yr yields continued to decline amid recent BOK comments on omicron.
Japan’s PPI remained at 1981 highs.
US equity FUTS have remained slightly higher in Asia.
Oracle rose >10% after results/guidance; Musk continues to sell Tesla shares.
Japan Ruling Parties expected to complete tax plan by Dec 10th (Fri).
Japan Q4 Tankan survey is due on Dec 13th (Mon).
China is due to hold its Central Economic Work Conference later in mid-December.

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.4%.
(NZ) New Zealand Nov Total Card Spending M/M: 9.1% v 9.5% prior; Retail Card Spending M/M: 9.6% v 10.1% prior.
(NZ) New Zealand Nov Manufacturing PMI: 50.6 v 54.3 prior (3rd month of expansion.

Japan

Nikkei 225 opened -0.6%.
(JP) Bank of Japan (BOJ) announced review of the benchmark ratio used to calculate the macro add-on balance in current account balances at the BOJ to which a zero interest rate is applied: set the ratio at 10.0% (prior 9.0%) for the Dec reserve maintenance period.
(JP) Japan Nov PPI (CGPI) M/M: 0.6% v 0.4%e; Y/Y: 9.0% v 8.5%e [Highest since comparable data began in Jan 1981].
(JP) Bank of Japan (BOJ) Official: Steelmakers voicing optimism that production will rebound during Dec, but still concerned on uncertainty of omicron.
(JP) Japan PM Kishida: Restart of travel subsidies dependent on coronavirus situation.

Korea

Kospi opened -0.6%.
(KR) South Korea to shorten the interval related to 3rd COVID shots to 3 months – South Korea press.
(KR) South Korea sells KRW350B in 50-year bonds: Avg Yield: 2.220% v 2.320% prior.

China/Hong Kong

Hang Seng Opened -0.8%; Shanghai Composite Opened -0.5%.
(CN) China PBOC raises Forex RRR by 200bps to 9.00%; Effective from Dec 15th – press.
(CN) State of China CNY appreciation will gradually recede, Will stabilize around equilibrium level – State Media Front Page.
(CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior; Net CNY0B v Net CNY0B prior.
(CN) China PBOC sets Yuan reference rate: 6.3702 v 6.3498 prior (Expected at 6.3499).
(CN) Nicaragua Foreign Min statement: There is ‘only one China’; We break diplomatic relations with Taiwan as of today to recognize China.
(CN) China Banking and Insurance Regulator (CBIRC): Releases draft rules on Insurance Asset management aimed at improving management and prevention of financial risks.
(CN) CICC: China PBOC may launch additional FX intervention measures, may reintroduce the counter-cyclical factor in setting the daily reference rate for the yuan (CNY), might also seek to slow capital inflows – US financial press.
(CN) China Sensetime discussing options of $767M Hong Kong IPO due to blacklist in US.
981.HK [SMIC] Said that the US is considering banning key exports to China chipmaker SMIC – Press.
(CN) China NAFMII (Interbank Bond Regulator) has held meeting with real estate developers – China media.

North America

(US) US Senator Wyden (D-OR) said the billionaires tax has not been included in the Finance Committee’s text; Separate report said Democrats will remove the vaping tax from the Senate plan amid negotiations related to the details of the bill.
(US) Senate has votes to pass fast track plan on raising the debt ceiling; the final vote was 59 to 35; President Biden is now expected to sign the measure.
(US) Senate Majority Leader Schumer (D-NY): Debt limit increase will be passed before Dec 15th.
(US) INITIAL JOBLESS CLAIMS: 184K V 220KE (lowest since 1969); CONTINUING CLAIMS: 1.99M V 1.91ME.
(US) Q3 FINANCIAL ACCOUNT HOUSEHOLD CHANGE IN NET WORTH: $2.362T V $5.849T PRIOR.

Europe

(EU) Reportedly EU countries expecting to agree on 9-month COVID-19 travel pass – press.
(PH) Philippines bans incoming travelers from Portugal to prevent spread of omicron variant.
(RU) Russia Central Bank (CBR) Gov Nabiullina: It is unlikely the bank will hold the key rate or raise it by just 25bps on Dec 17th.

Levels as of 00:20 ET

Nikkei 225, -0.7%, ASX 200 -0.4% , Hang Seng -0.7%; Shanghai Composite -0.2% ; Kospi -0.8%.
Equity S&P500 Futures: flat; Nasdaq100 +0.1%, Dax -0.1%; FTSE100 -0.3%.
EUR 1.1301-1.1287 ; JPY 113.57-113.33 ; AUD 0.7163-0.7131 ;NZD 0.6808-0.6781.
Gold +0.1% at $1,778/oz; Crude Oil -0.3% at $70.75/brl; Copper -0.1% at $4.3117/lb.