Copper spikes on talk of coordinated response by China smelters

Asian Mid-session Update: Australia Q3 Capex falls at biggest rate on record; Copper spikes on talk of coordinated response by China smelters

Economic Data

- (AU) AUSTRALIA Q3 PRIVATE CAPITAL EXPENDITURE (CAPEX) Q/Q: -9.2% V -2.9%E; Biggest decline on record

- (NZ) NEW ZEALAND OCT TRADE BALANCE (NZL): -0.96B V -1.00BE (5th consecutive month of deficit)

- (SG) SINGAPORE OCT INDUSTRIAL PRODUCTION M/M: 2.5% V 2.0%E; Y/Y: -5.4% V -5.3%E

- (KR) SOUTH KOREA NOV CONSUMER CONFIDENCE: 106 V 105 PRIOR

- (PH) PHILIPPINES Q3 GDP Q/Q: 1.1% V 1.4%E; Y/Y: 6.0% V 6.3%

- (BR) BRAZIL CENTRAL BANK (BCB) LEAVES SELIC TARGET RATE UNCHANGED AT 14.25%, AS EXPECTED

Index Snapshot (as of 04:30 GMT)

- Nikkei225 +0.7%, S&P/ASX +0.5%, Kospi +1.0%, Shanghai Composite +0.3%, Hang Seng +1.0%, Dec S&P500 +0.2% at 2,091

Commodities/Fixed Income

- Feb gold +0.3% at $1,073/oz, Jan crude oil +0.4% at $43.21/brl, Mar copper +3.5% at $2.12/lb

- Dec Copper contract rises over 3% in electronic trade above $2.12/lb; 1-week high

- USD/CNY: (CN) PBoC sets yuan mid point at 6.3896 v 6.3877 prior; Weakest Yuan setting since Aug 28th

- (CN) PBoC to inject CNY20B in 7-day reverse repos (42nd consecutive injection); Neutral position this week v injected CNY10B prior

- (JP) BOJ offers to buy ¥400B in 5-10yr JGBs, ¥240B in 10-25yr JGBs, and ¥140B in JGBs with maturity over 25-yr

Market Focal Points/FX

- Australia Q3 private CAPEX survey posted its biggest decline on record at -9.2%, with Building and structures CAPEX component -9.8% q/q and Equipment/Machinery down -8.2%. Australia did revise its expectations for FY15/16 capex to A$120.4B from A$114.8B, but the sequential decline still signals pressure on Q3 GDP and also gives the reluctant RBA even more ammunition to consider more relief. AUD/USD fell some 40pips below 0.7220, yield on the 3-year note was down 3bps, and S&P/ASX hit a high above 0.5250.

- New Zealand saw its 5th straight trade deficit, though it was slightly narrower than expected. Exports of 3.8B were a 3-month high while imports of 4.8B were a 4-month low. Shipments to Australia were especially weak, falling 8%. Exports to China and US were up 9.2% and 1.5% respectively. NZD/USD was generally little changed, trading in a 30pips range above 0.6560.

- In China, PBoC official Sheng noted the yuan appreciation trend will be intact in the long run even though there has been some short term weakness. PBoC mid-point setting saw new multi-week lows from RMB, all inspite expected strength from inclusion in the IMF SDR. That review takes place early next week. China smelters are stepping up their response to the free-falling base metals. Copper spiked up over 3% in electronic CME trading amid reports that smelters are planning meeting to consider price response. Separately, China regulators said to have probed "malicious" short selling at metals exchanges.

- In Japan, PM Abe said the govt will move toward lowering corporate tax below 30% soon, as outlined in reports for next year's policy goals released this week. Abe added Capex and wage hikes are key to virtuous cycle. Japan Business Federation (Keidanren) chairman Sakakibara noted companies with strong profits will raise wages amid continued pessimism over the economic recovery in Japan.

Equities

US equities/ADRs:

- EFUT: Shiji (Hong Kong) Limited discloses 50.5% stake - 13D filing; +159% afterhours

- ZAGG: Registers $100M mixed securities shelf - filing (35% of market cap); -3.9% afterhours

Notable movers by sector:

- Consumer discretionary: Vitasoy International Holdings 345.HK +1.5% (H1 result); Retail Food Group RFG.AU +5.3% (reaffirms guidance); SEEK SEK.AU +0.8% (guidance); Slater & Gordon SGH.AU -47.8% (comment on UK govt proposals)

- Consumer staples: Woolworths WOW.AU -0.9% (guidance)

- Financials: Hulic Co 3003.JP +4.4% (guidance); Bank of Queensland BOQ.AU -2.5% (guidance); OzForex Group OFX.AU -2.4% (acquisition proposal from Western Union)

- Industrials: Cardno CDD.AU -1.3% (YTD result); Asciano AIO.AU +0.1% (ACCC's decision on Brookfiled)

- Materials: Aluminum Corporation of China 601600.CN +1.9% (asset disposal); ALS Ltd ALQ.AU -3.0% (H1 result); BHP Billiton BHP.AU -3.4% (update on Brazil dam burst)

- Energy: Kunlun Energy Co 135.HK +3.4% (integration of two companies); PetroChina Co 857.HK +1.4% (asset sale speculation)