Headlines/Economic Data
General Trend: Asian equity markets are generally lower. Shanghai Large-caps decline, while downgrade of Samsung weighs on chip-related names; Copper down over 0.7%
Sony and Fast Retailing rise ahead of Cyber Monday
Japan
Nikkei225 opened +0.5%, later pared gains; Closed -0.2%
Chip-related companies trade lower as Samsung declines: SUMCO Corp -3%, Tokyo Electron -1.7%
Fast Retailing +1% amid reports of record online sales on Black Friday
Sony +1.3% (PlayStation4 seen among the top sellers on Black Friday, according to analysts and consultants)
Mitsubishi Materials -1.3% (follow-through selling amid recent data falsification disclosure)
Olympus -1.2% (Japanese banks to place shares in the firm in secondary offering)
Japan Govt will compile FY17/18 extra budget of €2.7-2.9T; with construction bond issuance of ~¥1T, this is up from the prior speculated ¥2.0-2.5T
Japan may lower taxes for smaller companies in M&A deals – Japanese Press
Morgan Stanley expects BoJ to raise its yield-curve control target in Q3 2018 (Note: JPMorgan made similar comments last week)
JAPAN OCT SERVICES PPI Y/Y: 0.8% V 0.9%E
Japan PM Abe Cabinet approval rating declines by 2 pct points to 52% – Nikkei Poll
Japan LDP official Nikai said to plan to visit China in December – Japanese Press
Korea
Kospi opened flat, has moved lower as the session progressed
Chip-related companies trade generally lower amid Morgan Stanley’s downgrade of Samsung Electronics, sees chip boom peaking: Korea: Samsung -4%; Hynix -2.9%; Japan: SUMCO Corp -3%, Tokyo Electron -1.7%; Taiwan: Taiwan Semi -1.8%, UMC -0.6%
Korean Won (KRW) -0.3%
(KR) South Korea Fin Min: Currency moves should be market oriented; sees GDP at 3% this year
Bank of Korea sells 3-month monetary stabilization bonds at 1.55%
Bank of Korea (BOK) sells KRW600B in 1-yr monetary stabilization bonds; avg yield 1.91% v 1.87% prior
South Korea sells KRW1.0T in 3-yr govt bonds at 2.16%
(KR) Bank of Korea (BOK) sells KRW600B in 1-yr monetary stabilization bonds; avg yield 1.91% v 1.87% prior
China/Hong Kong
Shanghai Composite opened -0.2%, Hang Seng opened flat
Both indices have weakened as the session has progressed
Large-cap CSI 300 Index -1% (extends volatility seen in prior week)
Hang Seng Conglomerates Index -0.8%, Consumer Goods -0.5%, Property/Construction Index -0.6%Information Technology Index -0.5%; Materials +0.9%
(CN) CHINA OCT INDUSTRIAL PROFITS Y/Y: 25.1% V 27.7% PRIOR
(CN) China Banking Regulatory Commission (CBRC) reports Oct banking sector total assets CNY241.6T, +10% y/y
(HK) Hong Kong SFC planning a consultation on active EFTs – SCMP
(CN) PBoC OMO: Injects CNY140B v CNY50B injected in 7,14 and 63-day reverse repos prior, injects match maturities
(CN) Lower China M2 growth is good for preventing financial risks – Chinese press
(HK) 1-month HK$ HIBOR 0.9225% (highest since 2008)
China 10-year bond yield -1bp
(CN) China MOF sells Special 5-year Treasury Bond: avg yield 3.8837%
Alibaba proposed to issue an indeterminate amount of US dollar denominated bonds
(CN) PBoC sets yuan reference rate at 6.5874 v 6.5810 prior
(CN) China MOF sells Special 5-year Treasury Bond: avg yield 3.8837%
Australia/New Zealand
ASX 200 opened flat, Closed +0.2%
ASX 200 Energy Index -0.6%, Resources -0.5%; Utilities +1%
Gas producer Santos -0.6%; Said to have hired adviser for takeover defense (Australian press)
Gold miner Newcrest Mining -1.3% (cautious broker commentary)
New Zealand NZX-50 closes +0.6% (record high)
Aussie and Kiwi underperform amid declines in Chinese equities and Copper prices
Other Asia
(PH) Philippines sells PHP0B (nil) for 3-month, 6-month and 1-year bills (rejects all bids)
North America
Retail: (US) According to ShopperTrak, shopper visits to brick-and-mortar retail stores on Thanksgiving Day and Black Friday -1.6% y/y (combined)
(US) According to Adobe Analytics, Black Friday and Thanksgiving online sales totaled $7.9B (record), +17.9% y/y; In terms of Cyber Monday, Adobe sees $6.6B in online sales (up ~17% y/y), which would be a new record day for US online shopping.
The US National Retail Federation (NRF) to release its Black Friday and Cyber Monday sales data on Tuesday, Nov 28th.
M&A: Meredith confirms to acquire Time for $18.50/share cash for $2.8B
Roark speculated to raise bid for Buffalo Wild Wings to ~$155/share (versus >$150 speculated on Nov 13th) – US financial press
Tax Reform: (US) US President Trump: ‘Big week’ for tax cuts; bill getting ‘better and better’; – Senate GOP will hopefully come through on measures
(US) White House: US President Trump to meet with members of the Senate Finance Committee on Monday
Politics: (US) White House says budget director Mick Mulvaney will be acting director of the Consumer Financial Protection Bureau (CFPB); Officials say the President has the power to name an acting chief under a 1998 law regarding federal vacancies, despite outgoing CFPB director Cordray naming his deputy as his interim replacement this week
(MX) Mexico Fin Min Meade said to step down soon – Mexico press
(CA) Canada PM Trudeau to visit China from Dec 3-7
Europe
(DE) German Chancellor Merkel: Europe needs a strong Germany, so it needs a new govt in place as soon as possible; The caretaker govt will be able to carry out the day to day business of the govt; Still ready to talk with the Social Democrats party (SPD) about a grand coalition (comments from Nov 25th)
ECB’s Constancio (Portugal): Expects Basel III agreement by year’s end; no decision on buying more corp bonds from January – speaking in Rome; Recent economic data are encouraging
(UK) Qiagen and MSD are expected to announce investments in the UK on Monday – financial press
Shell: Expected to restore cash dividend this week – UK press
Looking Ahead this week:
Later today comments from Fed’s Yellen; Tuesday RBNZ financial stability report, API, Japan retail sales; Wednesday South Korea industrial production, Japan industrial production, China Manufacturing and non-manufacturing PMI, Australia building permits, BOK rate decision
Levels as of 01:00ET
Nikkei225 -0.3%, Hang Seng -0.6%; Shanghai Composite -0.9%; ASX200 +0.1%, Kospi -1.3%
Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 -0.2%
EUR 1.1941-1.1912; JPY 111.69-111.32; AUD 0.7623-0.7593;NZD 0.6889-0.6854
Dec Gold +0.2% at $1,289/oz; Jan Crude Oil -0.4% at $58.73/brl; Dec Copper -1.8% at $3.14/lb
