General trend
- NZ bond yields declined after the NZ Treasury commented on bond issuance and GDP; RBNZ Gov also spoke.
- NZ Q3 GDP data is due on Dec 16th (Thurs.).
- AU bond yields rise, RBA Gov Lowe is due to speak on Thurs at 11:30 PM GMT [Keynote speech by Philip Lowe, Governor – The RBA and the Australian Economy – to CPA Australia Riverina Business Conference – Wagga Wagga].
- Aussie jobs data is also due tomorrow.
- Australia Dec Westpac Consumer Confidence: found a sharp increase in awareness of inflation; there appears to be a heightened sensitivity to virus developments in those states where there is likely more concern about the newly emerging Omicron strain.
- AUD/NZD rises.
- PBOC MLF operation was less than the maturing funds, previously announced RRR cut took effect today.
- China Nov New Home Prices had largest m/m drop since early 2015 [3rd straight decline].
- South Korea bond yields rise; Bank of Korea (BOK) Gov Lee to hold briefing on Thursday Dec 16th on H2 CPI.
- Little seen in terms of fresh omicron news.
- Japan press said the gov’t overstated construction orders data for ‘years’.
- WTI Crude Futs move below $70/bbl.
- US equity FUTs trade generally flat ahead of Fed.
- Shanghai and Hong Kong property indices rise after prior declines, more caution seen regarding property developers’ bonds.
- Aussie REITs decline amid higher bond yields.
- BeiGene declines 15% in Shanghai debut.
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened -0.2%.
- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Expect further reduction in stimulus over time; House prices are above sustainable level and vulnerable for a correction; reiterates will eventually raise cash rate above neutral level; Neutral rate for OCR is ~2% – speaking at Select Committee.
- (AU) Bain Capital said to be considering IPO for Virgin Australia by mid-2022 – Aussie press.
- (AU) Australia Dec Westpac Consumer Confidence: 104.3 v 105.3 prior; M/M: -1.0% v +0.6% prior.
- (NZ) New Zealand Treasury publishes Half Year Fiscal Update, cuts bond program by NZ$31B over 4 years, updates GDP and CPI outlook.
- (AU) Reserve Bank of Australia (RBA) offers to buy A$800M in Semi Govt Bonds v A$800M prior.
Japan
- Nikkei 225 opened -0.3%.
- (JP) Bank of Japan (BOJ) Gov Kuroda: Domestic corporate goods prices rising significantly; Economy not in state of stagflation.
- (JP) Japan reportedly sees FY22 tax revenue over ¥60T – Japanese press.
- (JP) Japan expected to hold the 2 + 2 meeting with the US in early Jan – press.
- (JP) Japan Land Min: Asahi report that overstates construction orders is true, extremely regrettable, will ensure it will never happen again.
- (JP) Bank of Japan (BOJ) to buy ¥2.0T in bonds via repurchase agreements (3rd consecutive operation, follows rise in Japanese repo rates).
- (JP) Japan LDP Official Amari: Do not want Japan’s involvement to stop at just 20NM chips; Wants 10NM chips developed in Japan.
- (JP) Japan PM Kishida: Japan’s use of overstated construction data has been used in GDP calculation.
Korea
- Kospi opened -0.3%.
- (KR) South Korea Nov Unemployment: 3.1% v 3.3%e.
- (KR) South Korea reports record 7,850 coronavirus cases, to return to restaurant and cafe hour restrictions under coronavirus containment procedures.
- (KR) Bank of Korea (BOK) issues report on introduction of robots in industries and the impact on employment from 2010-2019: The use of robots results in ‘meaningful’ decline in human labor demand in manufacturing.
China/Hong Kong
- Hang Seng opened +0.1%; Shanghai Composite opened -0.2%.
- (CN) CHINA NOV INDUSTRIAL PRODUCTION Y/Y: 3.8% V 3.7%E; YTD Y/Y: 10.1% V 10.4%E.
- (CN) CHINA NOV RETAIL SALES Y/Y: 3.9% V 4.7%E; YTD Y/Y: 13.7% V 13.9%E.
- (CN) China National Bureau of Stats (NBS): Economic recovery facing many constraints, main Nov indicators are in reasonable range.
- (CN) CHINA NOV PROPERTY INVESTMENT YTD Y/Y: 6.0% V 6.1%E.
- (CN) CHINA NOV NEW HOMES PRICES M/M: -0.3% V -0.3% PRIOR (3RD STRAIGHT DECLINE); Y/Y: 2.4% V 3.4% PRIOR.
- (CN) China Nov Surveyed Jobless Rate: 5.0% v 4.9%e.
- (CN) CHINA NOV FIXED URBAN ASSETS YTD Y/Y: 5.2% V 5.4%E.
- (CN) Certain banks have cut first-home mortgage rates in Shenzhen to 4.95% (prior 5.10%) – China media.
- (CN) China Sec Times cites analysts: China may cut the Loan Prime Rate (LPR) before holiday season.
- (CN) China PBOC sets Yuan reference rate: 6.3716 v 6.3675 prior.
- (CN) CHINA PBOC CONDUCTS CNY500B V CNY1.0T MATURING IN 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) AT 2.95% V 2.95% PRIOR (20th consecutive rate hold).
- (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 Nov Air Passenger Traffic 21.5M v 38.9M prior, -51.5% y/y.
- (CN) China CAAM sees 2021 vehicle sales 26.1M units, +3.1% y/y; 2022 vehicle sales at 27.5M units, +5.4% y/y.
North America
- (CA) Canada Govt Budget Update: Reports narrow budget deficits; To pare back bond issuance in FY21-22 by C$31B; cuts 2021 GDP, raises subsequent years.
- (US) House of Representatives has votes to raise debt ceiling by $2.5T to $31.4T cap avoiding default.
Europe
- (CH) Economist call for Swiss National Bank (SNB) to convert $1.0T foreign currency pile into sovereign wealth fund.
- (UK) Bank of England (BOE) said it does not favor major overhaul of cash system – financial press.
Levels as of 00:15ET
- Hang Seng -0.1%; Shanghai Composite -0.1%; Kospi -0.2%; Nikkei225 +0.0%; ASX 200 -0.7%.
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax -0.0%; FTSE100 -1.0%.
- EUR 1.1270-1.1254; JPY 113.80-113.67; AUD 0.7116-0.7099; NZD 0.6751-0.6726.
- Commodity Futures: Gold -0.1% at $1,769/oz; Crude Oil -1.3% at $69.81/brl; Copper -0.0% at $4.27/lb.
