Headlines/Economic Data
General Trend: Asian equities trade generally lower after US declines
Profit warning from Samsung Heavy weighs on shipbuilders
Volatility seen in shares of tech name Tencent
NY Copper +0.6% (declined over 3% on prior session); Copper futures higher
Japan
Nikkei 225 opened -0.4%; closed
TOPIX Iron & Steel Index -2% (gained over 1.4% during prior session)
Financials trade generally lower: TOPIX Securities index -2%
Toshiba +2.5% (expected to hold settlement talks with Western Digital)
BoJ Masai: Vital to show ‘determination’ to create stable prices; risks tilted to downside for prices, think downside risks to prices are ‘big’
MUFJ-MS sees Japan stocks heading for a "boom phase"
(US) Japan govt plans to raise tax on heated tobacco to 80% of conventional tobacco tax over 5-yrs – Japan press
Looking Ahead: 30-year JGB auction expected on Thursday
Korea
Kospi opened flat
Korean Won (KRW) -0.5%
South Korea Finance Ministry: President Moon to visit China next week (Dec 13-16th)
North Korea said to be showing some interest in Russia diplomatic initiative – press
US to send B-1B bombers to South Korea for drills today – Korean press
South Korea govt think tank (KDI) sees 2018 GDP at 2.9%, accommodative policy is needed
Bank of Korea (BOK) sells KRW2.6T in 2-yr monetary stabilization bonds at 2.06%
South Korea raises corporate tax rate to 25% for the highest earning companies (as expected) from 22% – Korean press
South Korea parliament approves KRW428.9T budget for 2018 (as expected) – South Korea press
010140.KR Guides FY17 Op loss KRW490B; Planning to sell KRW1.5T in shares, opens down over 20%
005930.KR Begins mass producing flash memory for smartphones with doubled capacity to 512 GB from 256 GB – Nikkei; -1%
China/Hong Kong
Markets open mixed: Hang Seng flat, Shanghai -0.4%
Bourses later move lower: Hang Seng Materials Index 3.5%; Shanghai Copper opened down over 3% (below 200-day MA)
Hang Seng Consumer Goods index -1.9% amid weakness in auto sector (Geely -6%, BYD -4%)
Hang Seng Information Technology Index -1.5%; Volatility seen in shares of Tencent
Hang Seng Property/Construction Index -1.2%, Financial Index -1.1%
(CN) Moody’s: Expects China PBOC to leave policy unchanged in 2018
PBoC skips open market operation for 4th straight session, elects to conduct 1-year MLF operation
(CN) PBOC LENDS CNY188B V CNY404B PRIOR IN MEDIUM-TERM LENDING FACILITY (MLF) OPERATION; OFFERS 1-YEAR LOANS AT 3.20% V 3.20% PRIOR
(CN) PBOC Open Market Operations (OMO): skips v skips prior (4th consecutive skip)
(CN) China Financial News: PBOC expected to conduct MLF lending one more time this month and ahead of Lunar New Year 2018
(HK) Moody’s: Raises Hong Kong Banking System outlook to Stable from Negative
(CN) China MoF sells 1-yr upsized bonds at 3.6975% v 3.62%e, bid-to-cover 1.72x; 10-yr upsized bonds at 3.8396% v 3.85%e, bid-to-cover 2.82x
(CN) PBoC sets yuan reference rate at 6.6163 v 6.6113 prior (8th consecutive weaker setting, longest run since Nov 2016)
(CN) China 2018 GDP growth seen at 6.7% ahead of Central Economic Work [**Note: On Dec 4th, the State Info Center (China think tank) recommended a 2018 GDP growth target of around 6.5%]
(CN) China Vice Premier Wang Yang: World economy is recovering
(CN) China researcher sees China GDP at 6.3% in 3-yrs – China Securities Journal
(CN) China Banking Regulatory Commission (CBRC) vice chairman Wang Zhaoxing: Govt will further regulate financial markets and get tough on illegal financial activities
(CN) PBOC deputy Gov Pan Gong-sheng: China authorities were right to rein in cryptocurrencies
(CN) US Commerce Dept to collect duties up to 265.79% on China origin steel imported from Vietnam
(CN) China MoF sells 1-yr upsized bonds at 3.6975% v 3.62%e, bid-to-cover 1.72x; 10-yr upsized bonds at 3.8396% v 3.85%e, bid-to-cover 2.82x
China’s HNA seeks extension related to CNY3B loan linked to acquisition of Gategroup – financial press
Looking Ahead: China trade data released on Friday
Australia/New Zealand
ASX 200 opened flat, later moved lower; close: -0.4%
ASX 200 Resources Index -1.5% (tracks Tuesday’s decline in copper prices)
Aussie and Australian bond yields decline after GDP data
(AU) AUSTRALIA Q3 GDP Q/Q: 0.6% V 0.7%E; Y/Y: 2.8% V 3.0%E; Prior GDP q/q revised higher from 0.8% to 0.9%
(AU) Australia Treasurer Morrison: Australia having strongest job growth in 40-yrs; Q3 GDP still places near the "top of the pack" for growth compared with other wealthy nations and was driven by investment
Amazon said its first day launch orders in Australia were ‘higher than any other launch day’; ASX 200 Consumer Discretionary Index +0.2%
(AU) Morgan Stanley comments on Amazon’s launch Australia: Says range of products offered is relatively weak, pricing of certain products higher vs some competitors – US financial press
(AU) Australia sells A$900M v A$900M indicated in 2.25% May 2028 Bonds, avg yield 2.5846%, bid to cover 2.59x
(AU) Australia Nov Port Hedland Iron Ore Exports 41.3M tons v 41.0M m/m, iron ore exports to China 35.2Mt v 35.2Mt m/m
(NZ) Fonterra Global Dairy Trade Auction: Dairy Trade price index: +0.4% v -3.4% prior
(NZ) New Zealand Ministry recommends Commerce Commission study into fuel market
SCL.NZ Guides FY17 EBITDA to be at the upper end of NZ$55-62M; Guides initial FY18 NZ$58-65M; +6%
AKP.AU Gives integration stage update; currently forecasts delivery time of wafers meeting required specifications for latter part of Q1 2018; -13%
Looking Ahead: Australia Oct Trade Balance due for release on Thursday
Other Asia
Moody’s: Sees 3 Fed rate hikes in 2018; Some Asian central banks to raise rates along with Fed; India may be among central banks that cut rates in 2018.
(IN) Reserve Bank of India (RBI) due to release rate decision at 4 GMT (no changes expected)
(MY) Malaysia Oct Trade Balance (MYR): 10.6B v 9.8Be; Exports y/y: 18.9% v 17.3%e
(MY) Malaysia sells 2027 bonds; avg yield 3.946%
(ID) Indonesia Central Bank Assistant Gov Waluyo: Won’t change policy rate if Rupiah and inflation within target; No reason to change rate at this time
North America
US equity markets ended broadly lower: Dow -0.5%, S&P500 -0.4%, Nasdaq -0.2%, Russell 2000 -1%
S&P500 Utilities Sector -1.3%, Industrials -0.9%; Technology flat
Homebuilder Toll Brothers declined over 7% after reporting quarterly results
UPS: Spokesperson: transit times for an unspecified number of deliveries have been extended by a day or two due to Cyber Monday sales, expects to have things back to normal by midweek
M&A: Tronox: FTC challenges proposed merger of Tronox and Ti02 business of Cristal
(US) Senate Banking Committee advances Jerome Powell nomination for Fed Chair by 22-1 vote – press; Nomination now heads to full Senate for confirmation vote
(US) White House Press Sec Sanders: reports regarding subpoena sent to Deutsche Bank are totally false; still believe special counsel probe will wrap up soon
(US) House Rules Committee Chair Sessions (R-TX): House plans vote Weds on short-term funding bill through Dec 22nd
(US) Weekly API Oil Inventories: Crude: -5.5M v +1.8M prior
UAE Oil Min Mazrouei: Sees crude demand increasing on cold winter; Sees 2018 oil demand at least at 2017 level
Bank of America CEO: Trading Rev seen down 15% this quarter y/y
Looking Ahead: US Nov ADP Employment Change, DoE Weekly Crude Inventories and Bank of Canada rate decision due for Wednesday
Europe
(UK) EU official: UK must provide proposal on separation by Weds – press; If EU doesn’t receive a proposal this week, EU won’t have sufficient time to get ready for the beginning of talks on future trade agreement at the mid-Dec meeting
(UK) Govt spokesperson: cabinet supports Prime Min May in making progress in Brexit talks; Does not believe PM May and DUP Leader Foster have not spoken yet
(UK) DUP Leader Foster: told PM May yesterday that DUP would not support deal unless text of Brexit agreement was changed
(UK) Ireland PM Varadkar: a huge amount of work remains on seeking border deal with UK; the ball is in London’s court; very much regrets failure to reach accord; We must hold firm on the border issue
(UK) Said to have been an Islamist suicide plot to assassinate PM May, which was foiled – Sky News
M&A: Nestle: Confirmed agreement to acquire Atrium Innovations for $2.3B
Levels as of 01:00ET
Nikkei225 -2.0%, Hang Seng -1.7%; Shanghai Composite -1.0%; ASX200 -0.4%, Kospi -1.1%
Equity Futures: S&P500 -0.2%; Nasdaq100 -0.5%, Dax -0.2%; FTSE100 -0.3%
EUR 1.1848-1.1816; JPY 112.63-112.10; AUD 0.7636-0.7572;NZD 0.6904-0.6871
Feb Gold +0.3% at $1,269/oz; Jan Crude Oil -0.4% at $57.39/brl; Mar Copper +0.6% at $2.97/lb
