Headlines/Economic Data
General Themes: Asian equity markets trade mixed amid thin trading conditions on US and Japan holidays
Energy and Materials sectors add on to Wednesday’s gains
Looking ahead: US markets closed for Thanksgiving holiday
Japan
Tokyo Stock Exchange closed in observance of Labour Thanksgiving Day
Nikkei 225 Futures -0.2%
USD/JPY consolidates losses seen following FOMC minutes
(JP) Japan metalworkers to push for a ¥3,000 ($26.90) minimum increase in monthly base pay for the 5th straight year – Nikkei
(JP) Japan said to be ready to start debate on Constitution reform – financial press
Looking Ahead: Japan prelim Nov Man PMI due to be released on Friday
Korea
Kospi opened flat and has since moved lower: LG Electronics -1.4%, Samsung Electronics -1.1%, Hynix -2% (tracks declines in US chipmakers)
Korean Won (KRW) opened at over 2 year highs versus US dollar; has since pared gains
South Korea FX Official: Some offshore speculators are failing to notice government’s willingness to stabilize financial markets
South Korea Q3 Short Term External Debt: $119.8B v $117.3B prior; Debt/FX reserves ratio 31.1% v 30.8% prior
Geopolitics: North Korea Foreign Ministry: US designation deemed a severe provocation (responds to move by US to name the country a state sponsor of terrorism)
South Korea and China to cooperate on stopping North Korea provocation – South Korea Press
China/Hong Kong
Hang Seng opened +0.1%; Materials Index +3% (Chalco +7%)
Shanghai Composite opened -0.2% and has extended losses led by appliance makers and wine cos; while banks outperform even with continued talk on tighter regulations; Small-cap Chinext index -1.5%
Automakers trade mixed: China may reduce EV subsidies by 20% in 2018 versus originally plan for 2019 – Chinese Press
Nexgo [300130.CN] cancels planned micro loan unit following suspension of approval by China government – US financial press
(CN) China Banking Regulatory Commission (CBRC) official calling for stricter monetary management – Chinese press
(CN) S&P: China’s wealth product rules are game changing and could be a break to credit
(CN) China planning to set up a more than CNY100B fund for support to mixed-ownership reform of State Owned Enterprises (SOE) – Chinese press
(CN) PBOC Deputy Gov Fan Yife; Financing difficulties remain for some small technology companies – China press
Shorter-term Offshore yuan money market rates ease after Wednesday’s rise: (HK) Offshore yuan Overnight HIBOR rate -3.22ppts to 2.75967%; 1-week HIBOR -47bps to 4.52286
(CN) PBoC OMO: Injects CNY270B v CNY190B injected in 7,14 and 63-day reverse repos prior; Net injects CNY100B v CNY0B prior
Offshore Yuan (CNH) +0.1%
(CN) PBoC sets yuan reference rate at 6.6021 v 6.6290 prior (strongest level since Oct 18th)
Australia/New Zealand
S&P ASX 200 opened -0.1%, closed flat; Utilities index -0.9% (follow-through selling) Consumer Discretionary Index -0.6%; Resources Index +0.8%
TAP.AU Issues letter to shareholder regarding Risco – filing; -20%
ASX 200 Financials Index -0.4%: Australia Treasurer Morrison summoned the chairs of the big banks to a series of urgent meetings; banks have said they will hold their opposition to in inquiry – Australian press
NZX 50 closes flat
Aussie and Kiwi slightly lower during session
(NZ) NEW ZEALAND Q3 RETAIL SALES (EX-INFLATION) Q/Q: 0.2% V 0.1%E (smallest gain since Q2 2015); Y/Y: 5.4% V 5.1%E
(AU) JPMorgan: In 2018, the Australia/US 10-year bond yield spread may turn negative
(AU) Moody’s: Sees stable outlook for corporates in Australia in 2018; Sees moderate levels of debt maturities over the next 18 months
(AU) Australia sells A$500M in Feb 2018 notes, avg yield 1.7244%, bid to cover 4.46x
(AU) Australia sells A$394.5M in RMBS at auction (resumed as of today)
(NZ) New Zealand sells NZ$150M in 3.5% 2033 bonds, avg yield 3.1338%, implied bid to cover 2.48x
(NZ) New Zealand Former Labour Finance Minister will head group to consider changes that would improve the structure, fairness and balance of the tax system
(NZ) New Zealand immigration minister wants to tighten work visa rules – NZ press
Looking ahead: New Zealand Oct Trade Balance due for release on Friday.
Australia to sell A$500M in 2.00% Dec 2021 bonds
Other Asia
Singapore
Straits Times Index opened +0.3%; has since pared gains
Q3 GDP revised higher: SINGAPORE Q3 FINAL GDP Q/Q: 8.8% V 7.8%E; Y/Y: 5.2% V 5.0%E
Singapore sees 2018 GDP growth slowing to 1.5-3.5%, while 3.0-3.5% is expected for 2017
Singapore Central Bank (MAS) official: 2017 monetary policy remains appropriate
SINGAPORE OCT CPI M/M: -0.3% V -0.1%E; Y/Y: 0.4% V 0.5%E; Core CPI Y/Y: 1.5% v 1.5%e
North America
US equities closed mostly lower: Dow -0.3%, SP500 -0.1%, Nasdaq +0.1%, Russell2000 -0.1%
S&P500 Financial Sector -0.5%
(US) FOMC MINUTES FROM NOV 1 MEETING: MANY FED POLICYMAKERS SAW NEAR-TERM RATE HIKE AS WARRANTED; SOME OPPOSED NEAR-TERM HIKE DUE TO WEAK INFLATION; A few Fed officials concerned hikes would undermine credibility; Several on Fed concerned about low inflation expectations
US Treasury yields ended lower amid release of FOMC minutes
(US) DOE CRUDE: -1.9M V -1.5ME
M&A: 21st Century Fox (FOXA) said to remain engaged in prelim talks with suitors including Comcast and Disney; Broadcom (BRCM) reportedly considering higher offer for Qualcomm (QCOM) by offering more shares (press); Davita (DVA) said to consider sale of medical group unit which might be valued at ~$4B (press);
Looking Ahead: NYSE is closed on Thursday in observance of Thanksgiving holiday. An early close (at 13:00 GMT) is seen for Friday;
Canada Sept Retail Sales to be released later today
Europe
(DE) Germany Oct Tax Rev +0.5% y/y, suggesting continued economic expansion – Ministry
(EU) EU’s Tusk: EU needs to discuss how to move forward with a banking union; Euro summit on Euro zone future will go ahead as planned
(DK) Denmark PM Rasmussen’s Liberal Party suffered losses in local elections – financial press
Looking ahead: Second readings of Q3 GDP expected out of Germany and the UK; European Nov prelim PMI data; ECB Account of Monetary Policy Meeting
Levels as of 01:00ET
Nikkei closed, Hang Seng +0.1%; Shanghai Composite -1.1%; ASX200 +0.6%, Kospi +0.0%
Equity Futures: S&P500 +0.0%; Nasdaq100 +0.0%, Dax -1.5%; FTSE100 +0.0%
EUR 1.1838-1.1813; JPY 111.38-111.07; AUD 0.7623-0.7604;NZD 0.6884-0.6867
Dec Gold -0.2% at $1,289/oz; Jan Crude Oil -0.2% at $57.88/brl; Dec Copper +0.0% at $3.14/lb
