China slowdown concerns in the headlines after Oct IP data
|Asia Market Update: Hang Seng extends declines amid continued weakness in financials, Tencent drops post earnings; More sticking points reported in the press regarding US/China, China slowdown concerns in the headlines after Oct IP data
General Trend:
- Hang Seng again leads declines in Asia amid recent violence, earnings and China data
- Hong Kong government extends suspension of schools amid recent reports of violence
- Trade-sensitive Marine/Transportation index among the decliners in Japan, banks drop after recent earnings reports
- Line Corp indicated to rise on merger talks with Z Holdings (Softbank unit)
- AUD/JPY declines in the face of weaker domestic employment data, China data and drop in equity futures
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
-BHP [BHP.AU]: Names Mike Henry CEO after current CEO Andrew Mackenzie announces he will retire
- (AU) AUSTRALIA OCT EMPLOYMENT CHANGE: -19.0K V +15.0KE (largest decline in 3 years); UNEMPLOYMENT RATE: 5.3% V 5.2%E
- (AU) AUSTRALIA NOV CONSUMER INFLATION EXPECTATION: 4.0% V 3.6% PRIOR (highest since March)
- (AU) Australia govt to offer tax breaks to accelerate large projects - press
- (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Reiterates we can now spend some time observing monetary policy working
- (NZ) RBNZ Deputy Gov Bascand: RBNZ could cut rates as soon as Feb if needed
China/Hong Kong
- Shanghai Composite opened +0.1%, Hang Seng -0.5%
- China Hongqiao [1378.HK]: Says it will not cut any aluminum production during this winter; to move 2M tons of annual aluminum production capacity from Shandong to Yunnan [The company is said the be the world's largest producer of aluminum]
- Gome [0493.HK]: Says it will not proceed with exchange offer for bonds and concurrent new issuance; Notes prevailing market conditions
-(CN) CHINA OCT INDUSTRIAL PRODUCTION Y/Y: 4.7% V 5.4%E
-(CN) CHINA OCT YTD FIXED URBAN ASSETS Y/Y: 5.2% V 5.4%E
-(CN) CHINA OCT RETAIL SALES Y/Y: 7.2% V 7.8%E
-(CN) China Oct Surveyed Jobless Rate: 5.1% v 5.2% prior
- (CN) China National Bureau of Statistics (NBS): Will resist downward economic pressure, need efforts to achieve full-year employment target; Overall economic momentum has not changed; Chinese economy should not be underestimated
- (CN) China govt said to accelerate investments and prevent risks; to lower capital ratio requirement for some infrastructure investment projects - financial press
- (CN) US-China trade talks said to hit snag over specific US agriculture purchases; China also resisting commitments on tech transfers and enforcement mechanisms - press
- (US) Pres Trump: China trade talks are moving along rapidly
- (US) White House Adviser Navarro said everyone should stop listening to the rumors [asked about the report related to US/China trade talks hitting a ‘snag’ over issues including US agriculture purchases] – Fox News
- (CN) China plans to introduce unified regional GDP accounting in early 2020, cites the National Bureau of Statistics (NBS) – Xinhua
- (CN) China PBoC Open Market Operation (OMO): Skips for 14th consecutive session
- (CN) According to analysts China PBOC may resume reverse repos this week, any resumption could be an attempt to offset the impact of tax payments - Chinese press
- (CN) China PBOC sets Yuan Reference Rate: 7.0083 v 7.0026 prior
-(HK) A Hong Kong man who is believed to have fallen from a great height has died, it is unclear at this time if his death is protest related - Local Press
Japan
- Nikkei 225 opened flat
-(JP) JAPAN Q3 PRELIMINARY GDP Q/Q: 0.1% V 0.2%E (lowest since contractions in 2018); GDP ANNUALIZED Q/Q: 0.2% V 0.9%E; Private Consumption Q/Q: 0.4% v 0.6%e; Q3 exports -0.2% q/q; Private inventories subtracted 0.3 pct pts from Q/Q GDP.
-(JP) Prior Annualized GDP Q/Q revised higher from 1.3% to 1.8%
- (JP) Japan Economy Min: Exports of autos and electronics parts remain weak; Drop in South Korea tourism weighed 'heavily' on economy - comments after prelim Q3 GDP data
- (JP) Japan MoF sells ¥1.9T v ¥1.9T prior in 0.1% coupon 5-year JGB: avg yield: -0.1900% v -0.2800% prior, bid to cover: 4.0x v 3.69x prior
Korea
- Kospi opened +0.3%
-(KR) South Korea Government: Impact from bond issuance increase to be limited; will strengthen monitoring of market rates; have sufficient demand for government bonds
-(KR) US expected to remove anti-dumping duties on cold rolled sheets made in South Korea - Yonhap
-(KR) South Korea Oct Export Price Index M/M: -1.9% v -0.8% prior; Y/Y: -7.3% v -5.0% prior
North America
-(US) Fed Chair Powell: rates remain on hold barring material change in outlook - Congressional testimony text release
-HP Inc [HPQ]: Carl Icahn notes he owns 4.24% stake, suggests proposed Xerox/HP merger could have benefits - US Financial Press
Levels as of 00:20 ET
- Nikkei 225, -0.7%, ASX 200 +0.6%, Hang Seng -0.9%; Shanghai Composite +0.1%; Kospi +0.3%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.1%; FTSE100 flat
- EUR 1.1013-1.0999 ; JPY 108.86-108.62 ; AUD 0.6842-0.6795 ;NZD 0.6420-0.6387
- Gold +0.2% at $1,465/oz; Crude Oil +0.6% at $57.47/brl; Copper flat at $2.639/lb
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