Crickets ahead of key rate decisions [including BoJ and Fed], UK CPI also in focus

General trend

- Japan automaker M&A in focus [Nissan and Honda].

-SCMP: Chinese equities rise amid measures to support state-owned firms.

- US equity FUTS erased declines.

- Japan imports unexpectedly declined in Nov.

- Australia debt agency might update issuance plan after budget.

- Dealers discuss possible ‘fat finger’ trade in the JGB market on Dec 17th.

- USD/JPY: Implied 1-day volatility rises to 21.75 ahead of Fed and BOJ decisions – US financial press [Dec 12th: USD/JPY 1-week implied volatility rises to ~11.7 (BOJ decision is on Dec 19th) – US financial press].

- Commodity currencies push lower.

- NZ GDP due on Thurs.

- Aussie budget also in focus.

- China Government Bond FUTs trade sharply lower [China PBOC met with financial firms over the 'stability of bond investments'; the meeting was held on Wed morning [Dec 18th] - Chinese press; The central bank urged bond trading firms to pay close attention to relevant risks including rates].

- IDR extends drop [Reminder from Dec 17th: Indonesia Central Bank (BI) offices [including office of central bank Gov] searched by Indonesia anti-graft body; relates to the alleged misuse of Bank of Indonesia's Corporate Social Responsibility (CSR) program funds - Indonesia press].

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 8,312.

-Australia releases mid-year economic and fiscal outlook: It is assumed monetary policy will begin to ease in the first half of 2025, with the official cash rate assumed to decline to 3.6 per cent by the middle of 2026.

-Australia sells A$800M vs. A$800M indicated in 2.75% Jun 2035 bonds; Avg Yield: 4.326% v 4.5913% prior; bid-to-cover: 3.14x v 3.26x prior.

-New Zealand Q3 Current Account (NZD): -10.6B v -10.4Be.

-New Zealand Q4 Westpac Consumer Confidence: 97.5 v 90.8 prior.

China/Hong Kong

-Hang Seng opens +0.9% at 19,884.

-Shanghai Composite opens +0.3% at 3,371.

- China PBOC met with financial firms over the 'stability of bond investments'; the meeting was held on Wed morning [Dec 18th] - Chinese press.

-China said to investigate more US tech deals after Nvidia probe - TheInformation.

-Hong Kong said to probe local financiers over Nasdaq listings - US financial press.

-Evergrande [3333.HK]: Unit's winding-up hearing adjourned to Jan 10th.

- Former PBOC Vice Gov Chen Yulu said China needs to cut the RRR and interest rates in 2025 [inline] – US financial press.

- China Pres Xi: Urges China to plan 2025 economy and seek a good start.

-China PBOC sets Yuan reference rate: 7.1880 v 7.1891 prior.

-China PBOC Open Market Operation (OMO): Injects CNY387.6B in 7-day reverse repos; Net injects CNY309B v injects CNY214B prior.

- China PBOC sells CNY20B in 6-month bills at 2.55% in Hong Kong.

Japan

-Nikkei 225 opens -0.5% at 39,176.

-Honda and Nissan expected to make formal merger announcement on Dec 23rd (Mon)- Japan media.

-Nissan: Reportedly Hon Hai had made a buyout proposal during the spring of 2024 - press.

-Nissan: Former Chairman Carlos Ghosn to hold online press conference on Dec 23rd - press.

-Kioxia shares first trade at ¥1,440/share in market debut vs IPO price of ¥1,455.

- Japan to support Rapidus even if it delays target – US financial press.

-JAPAN NOV TRADE BALANCE : -¥117.6B V -¥687.9BE; Exports Y/Y: 3.8% v 2.5%e; Imports Y/Y: -3.8% v 0.4%e [first decline since Mar].

-Japan sells ¥3.2T vs. ¥3.2T indicated in 12-Month Bills; Avg Yield: 0.4796% v 0.4379% prior; bid-to-cover: 4.40x v 3.14x prior.

-BOJ: Japan Household Assets at ¥2,179T v ¥2,212T prior - Flow of Funds report.

Korea

-Kospi opens +0.3% at 2,463.

-Hynix: Develops high capacity SSD for AI data centers (**Reminder Oct 24th: Hynix said to be in talks with Tesla to supply KRW1.0T in eSSD data storage devices - Korean press [** Insight: Enterprise SSD, or eSSD, is a data storage device for AI servers]).

-South Korea plans hearings for constitutional judge nominees next week; cites the Parliament committee - US financial press.

- South Korea prosecutors to transfer Yoon's case to CIO - South Korea press.

-Bank of Korea (BOK Gov) Rhee: Sees downside risk to 2024 GDP growth forecast of 2.2%.

- South Korea Fin Min Choi: Confirms to front load 2025 budget spending in H1.

North America

-(US) Lawmakers release text of short-term government funding measure: The US government is funded through Mar 14 2025 in stopgap; the measure averts a partial shutdown starting on Sat [Dec 21st] .

-(US) Reportedly 8 Republican Senators have raised doubts about Tulsi Gabbard as Trump's nominee to lead US intelligence services - press.

-(US) NOV ADVANCE RETAIL SALES M/M: 0.7% V 0.6%E (highest since Jan 23); RETAIL SALES (EX-AUTO) M/M: 0.2% V 0.4%E.

-(US) NOV INDUSTRIAL PRODUCTION M/M: -0.1% V 0.3%E; CAPACITY UTILIZATION: 76.8% V 77.3%E.

-(US) Treasury $13B 20-year bond reopening draws 4.686% v 4.590% prior, bid-to-cover 2.50x v 2.59 prior and 2.65 over last 8 auctions. Eli Lilly [LLY]: Kisunla™ (donanemab-azbt) Approved in China for the Treatment of Early Symptomatic Alzheimer's Disease.

- Boeing: Has resumed production of 767 and 777/777X planes that were halted during the strike.

Europe

-(UK) Times Shadow MPC votes 8-1 for the Bank of England to leave rates unchanged; Robson supported a 25bps cut.

Levels as of 00:20 ET

- Nikkei 225, -0.5%, ASX 200 -0.1% , Hang Seng +0.8%; Shanghai Composite +0.8% ; Kospi +1.1%.

- Equity S&P500 Futures: +0.1%; Nasdaq100 flat, Dax -0.2%; FTSE100 flat.

- EUR 1.0505-1.0486 ; JPY 153.78-153.35 ; AUD 0.6339-0.6310 ;NZD 0.5767-0.5731.

- Gold -0.1% at $2,659/oz; Crude Oil -0.5% at $69.71/brl; Copper -0.6% at $4.1248/lb.