HomeContributorsFundamental AnalysisMarket Update - Asian Session: Asian Equities Open Generally Higher

Market Update – Asian Session: Asian Equities Open Generally Higher

Hang Seng Technology index trades lower by over 1%; Tencent -2.5%

China/Hong Kong

Markets opened mixed: Shanghai -0.1%, Hang Seng +0.3%

Hang Seng Information Technology Index -1.5%, Materials Index -0.9%; Utilities +0.3%

China Nov Caixin Manufacturing PMI declines despite m/m rises seen in the official manufacturing and non-manufacturing PMI data

(CN) CHINA NOV CAIXIN MANUFACTURING PMI 50.8 V 50.9E

(HK) Macau Nov Casino Rev MOP23.0B +22.6% y/y v +19%e

(CN) PBOC OMO: Skips OMO, says liquidity is at ‘relatively high level’ v CNY280B injected in 7,14,63-day reverse repos prior: For week net drain of CNY40B v net CNY150B injected w/w

(CN) PBoC sets yuan reference rate at 6.6067 v 6.6034 prior (prior close: 6.6090)

(CN) China: Some chipmakers eligible for import tax break

Japan

Nikkei225 opened +0.8%, later pared gains; closed: +0.4%

TOPIX Iron & Steel Index +1.2% (Nippon Steel +2%)

Nippon Paint [4612.JP] +8% (ended takeover talks with Axalta Coating Systems)

Sharp [6753.JP] +8% (to return to the first section of the TSE on Dec 7th)

Toshiba [6502.JP] +1.5% (renewed speculation related to settlement with Western Digital)

Little initial reaction seen to batch of Japanese data

JAPAN OCT NATIONAL CPI Y/Y: 0.2% V 0.2%E; EX FRESH FOOD (CORE) Y/Y: 0.8% V 0.8%E

JAPAN Q3 CAPITAL SPENDING EX SOFTWARE: 4.3% V 3.1%E; CAPITAL SPENDING Y/Y: 4.2% V 3.2%E

JAPAN OCT JOBLESS RATE: 2.8% V 2.8%E; JOB-TO-APPLICANT RATIO: 1.55 V 1.52E

BoJ Executive Dir Amamiya: Need to ‘persistently’ continue ‘powerful’ easing

Japan Fin Min Aso: Confirms no decision made on tobacco tax

Australia /New Zealand

ASX200 opened +0.4%, closed +0.4% ; Resources Index +0.6%

Billabong [BBG.AU]: +23% (received takeover offer from Boardriders)

(AU) Australia sells A$1B v A$1B indicated in 2.25% Nov 21, 2022 bonds, avg yield 2.1577%, bid to cover 3.94x

(NZ) New Zealand Fin Min Robertson: expects growth to strengthen through 2019 and 2020; most economists agree growth will soften next year; Will cut net debt to 20% of GDP within 5 years; Will need to re-prioritize some government spending

(NZ) NEW ZEALAND Q3 TERMS OF TRADE INDEX Q/Q: 0.7% V 1.3%E

(NZ) RBNZ Spencer to give speech on ‘low inflation’ on Dec 5th

Looking Ahead: Busy next week in terms of Australia data releases including Q3 GDP, Reserve Bank of Australia rate decision, Oct Retail Sales and Trade Balance data.

South Korea

Kospi opened +0.5%, later pared opening gains

Samsung Electronics +0.8%

Q3 GDP revised higher: South Korea Q3 Final GDP Q/Q: 1.5% v 1.4%e; Y/Y: 3.8% v 3.6%e

SOUTH KOREA NOV TRADE BALANCE: $7.84B V $8.5BE: Exports Y/Y: 9.6% v 10.3%e

South Korea Nov CPI M/M: -0.7% v 0.0%e; Y/Y: 1.3% v 1.8%e; Core Y/Y: 1.2% v 1.7%e (below Bank of Korea’s 2% target)

North America

US markets hit record highs amid continued focus on tax reform: Dow Jones +1.4%, S&P500 +0.8%, Nasdaq +0.7%, Russell 2000 +0.1%
S&P 500 Industrials +1.6%, Energy +1.5%

Tax Reform: (US) US Senate Majority Leader McConnell: Next floor votes will be at 11 AM on Friday

US Senate will not vote on the Republican tax bill on Thursday and debate to continue on Friday, says a separate financial press report

(US) Sen Cornyn (R-TX): a tax ‘revenue trigger’ probably will not work in the Senate – press

(US) Sen McCain (R-AZ): will support Senate GOP tax bill

US) Sen Collins (R-ME): not yet committed to voting for final GOP tax bill, still have a lot of concerns; personally favor corporate tax being lowered to 21% or 22% rather than 20% – press interview; – Senators are also still negotiation on a ‘revenue trigger’

(US) Joint Committee on Taxation (JCT): Senate tax bill pays for less than half of its cost

Fed Speak: (US) Fed’s Mester (hawk, non-voter): tax plan unlikely to have major impact on growth; inflation expectations remain reasonably well anchored

(US) Fed’s Kaplan (moderate, voter): Biggest issue at the Fed is we’re at or near full employment – comments in Dallas

(US) Atlanta Fed cuts Q4 GDP estimate to 2.7% from 3.4% on 11/22

Politics: US President Trump said to have ‘urged’ top Republicans to end probe related to Russia – NY Times

(US) Republicans reportedly planning a 2-week stop gap govt funding extension bill that would keep the govt open through Dec 22nd – press

M&A: Broadcom said to delay higher bid for Qualcomm until 2018 – US financial press

Europe

(UK) EU official: EU and UK reach agreement over Brexit divorce bill – press

(DE) SPD official Weil: coalition talks with Germany Chancellor Merkel’s CDU/CSU could extend until at least Feb – German press

Levels as of 01:00ET

Hang Seng -0.2%; Shanghai Composite -0.2%; Kospi +0.1%

Equity Futures: S&P500 -0.3%; Nasdaq100 -0.2%, Dax flat; FTSE100 flat

EUR 1.1888-1.1915 ; JPY 112.32-112.69 ; AUD 0.7551-0.7571 ;NZD 0.6817-0.6842

Dec Gold +0.1% at $1,274/oz; Jan Crude Oil +0.3% at $57.56/brl; Dec Copper flat at $3.071/lb

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