CN And HK Markets Drop After Small Rate Cut

Dec 20 21, 07:22 GMT

General trend

Hawkish Fed speak also in focus, Waller spoke on Fri.
PBOC again uses 14-day reverse repo ahead of year-end.
WTI Crude FUTs extended drop after moving below $70/bbl.
10-yr UST yields also declined; USD/JPY trades slightly lower.
EUR/GBP rises amid the Frost news.
TRY continues to drop.
Equity markets have generally extended drops.
Nikkei 225 has declined by over 2%;Toyota announced additional production disruptions.
Hang Seng dropped by >1% during the morning session; Property index declines [Kaisa Group, Sunac and Chinese Estates have been in the headlines].
Shanghai Composite also ended morning trading lower (-0.8%).
S&P ASX 200 pared decline.
RBA Dec Minutes due on Tues (Dec 21st).

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.1%.
(NZ) New Zealand Nov Trade Balance (NZ$): -0.9B v -1.3B prior.
RIO.AU Appoints Canadian ambassador to China, Dominic Barton chairman, effective on May 5th.
(AU) Reserve Bank of Australia (RBA) offers to buy A$800M in Semi Govt Bonds v A$800M prior.
(AU) Reserve Bank of Australia (RBA) Offers to buy A$1.60B in Govt bonds v A$1.60B prior.
MFG.AU Notes impact of St James place mandate being terminated, not material to interim results.
CIM.AU Responds to ASX query: Actively working with Middle East ops acquirer to ensure BICC meets commitments to employees, which is currently A$7.0M outstanding.

Japan

Nikkei 225 opened -0.8%.
(JP) Bank of Japan (BOJ) Gov Kuroda: Not time to think about normalization; will seek appropriate policy as well as fiscal health; Increase in BOJ holdings does not impact policy.
(JP) Bank of Japan Flow of Funds report: Q3 Household assets ¥1,999T, +5.7% y/y.
7203.JP To suspend ops in Jan at 5 factories due to supply chains, chip shortages, and due to coronavirus pandemic; Affirms 9.0M production guidance.

Korea

Kospi opened -0.5%.
052690.KR Freezes electricity prices in Q1 [in line] – Yonhap.
(KR) North Korea leader Kim’s sister makes appearance at event, after not being seen for over 60 days.
(KR) South Korea markets to be closed Dec 31 (Fri) and resume trading Jan 3rd; ex-dividend date is Dec 29th (Wed).

China/Hong Kong

Hang Seng opened -0.5%; Shanghai Composite opened -0.3%.
(CN) CHINA PBOC MONTHLY LOAN PRIME RATE (LPR) SETTING: CUTS 1-YEAR RATE 5BPS TO 3.80%, MAINTAINS 5-YEAR RATE UNCHANGED.
(CN) China Senior Diplomat Wang: China does not fear confrontation with the US; To promote steady progress in ties with US in 2022.
(CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior and CNY10B in 14-day reverse repos v CNY0B prior; Net inject CNY10B v Net CNY0B prior.
(CN) Hong Kong Legislative Council elections saw just 30.2% of voter turnout (lowest on record), all candidates picked by China Communist Party and election under new rules.
(CN) China regulators should not allow capital to have ‘wild’ growth – China press commentary.
(CN) China PBOC sets Yuan reference rate: 6.3933 v 6.3651 prior.
(CN) China PBOC Newspaper: China encourages property project purchases.
(HK) China issues a paper related to Hong Kong Political development: Notes foreign forces disrupt democracy development.

Other

(CL) Chile names Left wing candidate Boric as president elect, to meet with Pinera Monday, Dec 20th.

North America

(US) Sen Manchin (D-VW) says he will not support Biden’s “Build Back Better” legislation.
CERN Expected to announce it will be acquired by Oracle Monday at mid $90d/shr cash – press.
PFE New Zealand notes death of a 26yo man may be linked to COVID vaccine, coroner is conducting investigations – press.

Europe

(UK) UK Brexit Min Frost resigns, saying he is confident that Brexit was secure, but has concerns about the government’s direction – press.
(ES) Spain PM Sanchez to meet with regional leaders due to steep increase in COVID cases.

Levels as of 00:15ET

Hang Seng -1.2%; Shanghai Composite -0.6%; Kospi -1.6%; Nikkei225 -2.1%; ASX 200 -0.2%.
Equity Futures: S&P500 -0.9%; Nasdaq100 -1.1%, Dax -1.4%; FTSE100 -0.9%.
EUR 1.1252-1.1235; JPY 113.73-113.46; AUD 0.7134-0.7106; NZD 0.6747-0.6721.
Commodity Futures: Gold -0.1% at $1,802/oz; Crude Oil -3.5% at $68.39/brl; Copper -0.9% at $4.26/lb.