Markets listless ahead of tonight’s US Nov CPI

General trend

- Japan’s Nov PPI y/y was the highest since Jun 2023. JPY/USD traced back a small portion of losses suffered since the week began, with 10-yr yields +1bps. BOJ decision next week, with some analysts considering a January hike may be on the cards, instead of December.

- Ahead of Friday’s Japan Tankan figures, today the pace of Large All Industry and Manufacturing kept rising during Q4.

- China yields stayed soft after the telegraphing of looser monetary and fiscal policy in 2025 earlier this week, with 10-yrs touching below 1.89%. China Securities Journal cited analyst expectations of ‘bigger’ rate cuts next year, including the RRR. However, today there was finally an initial “caution” from China regarding the strength of the record bond rally, with warning of a ‘correction’ and need to be ‘vigilant against stampede risks'.

- China state banks reportedly sold USD 'in large amounts' onshore earlier today, with offshore Yuan rising back to 7.24%.

- Kiwi dollar hit a 26-month low against the greenback amid general commodity currency weakness along with the AUD.

- Further back and forth in South Korea after the fall-out from the failed imposition of martial law by Pres Yoon last week. The opposition party have signaled they will call for an impeachment vote ‘every Saturday’, with another defection from the ruling party edging the total toward the 200 required. Pres Yoon himself said to prefer being impeached to resigning, as some in his own party said they were working towards around Feb-Mar next year.

- China Central Economic Work Conference [CEWC] starts today, scheduled to finish tomorrow Dec 12th.

- US equity FUTs flat to slightly down during the Asia session.

Looking ahead (Asian time zone)

- Wed Dec 11th (Wed night US Nov CPI, BOC Rate Decision).

- Thu Dec 12th AU Nov jobs, IN Nov CPI, (Thu eve ECB Rate Decision, US Nov PPI).

- Fri Dec 13th NZ Nov Biz PMI, AU Westpac Consumer Confidence, JP Tankan.

- Sat Dec 14th CN Nov New Yuan Loans, FDI.

Holidays in Asia this week

- Tue Dec 10th Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 8,392.

- New Zealand Q3 Manufacturing Activity Q/Q: -0.1% v 0.1% prior.

- New Zealand Fin Min Willis: Govt to set up new company to own Ferries, to procure two new Cook Strait ferries; Names Winston Peters as Minister for Rail.

China/Hong Kong

- Hang Seng opens +0.5% at 20,404; Shanghai Composite opens -0.2% at 3,416.

- Asia Development Bank (ADB) Maintains China GDP forecasts at 4.8% for 2024, 4.5% for 2025; Cuts Asia and India.

- Follow up: Analysts see 'bigger rate cuts, RRR cuts next year' (2025) - China Securities Journal, citing analysts.

- China MOF sells 3-year and 10-year Bonds.

- China Pres Xi: China will continue to be the biggest engine of world economic growth.

- China official: China's monetary policy shift means low interest rate and 'reasonable' 2025 money supply; China faces challenges in 2025 – press [overnight update].

- Shanghai issues action plan related to support of M&A activity and accelerating the merger of securities companies [overnight update].

- HSBC: China market stabilization fund ‘likely in the pipeline’; cites the recently released Politburo statement – US financial press [overnight update].

- China PBOC sets Yuan reference rate: 7.1843 v 7.1896 prior.

- China PBOC Open Market Operation (OMO): Injects CNY79B in 7-day reverse repos; Net injects CNY37B v net injects CNY90B prior.

Japan

- Nikkei 225 opens flat at 39,357.

- Japan Nov PPI (domestic CGPI) M/M: 0.3% v 0.2%e; Y/Y: 3.7% v 3.4%e (highest since Jun 2023).

- Japan Q4 BSI large all industry Q/Q: 5.7 V 5.1% PRIOR.

- Japan PM Ishiba: Need to reach decision on tax reforms around mid-Dec - financial press.

- Japan said to consider 4% corporate surtax from 2026 to fund Defense - Japanese press.

- Reportedly Japan will raise iDeCo pension plan monthly limit by ¥7K - Nikkei.

- Japan PM Ishiba: Need careful consideration of restrictions on [stock] buybacks, wary of restricting how companies distribute their earnings [responds to lawmaker's question] [overnight update].

Korea

- Kospi opens -0.2% at 2,412.

- South Korea Dec 1-10 Exports Y/Y: +12.4%; Imports: +11.6%.

- South Korea Nov Unemployment Rate: 2.7% v 2.8%e.

- South Korea Nov Total Bank Lending To Household (KRW):1,141.4T v 1,139.5T prior.

- A further South Korea ruling-party lawmaker, Kim Jae-Sub, says he will vote to impeach Pres Yoon - financial press.

- Official: Former South Korea Defense Min Kim is ‘alive’ after attempting suicide in jail by using his underwear – Yonhap.

- South Korea Pres Yoon reportedly prefers impeachment over resignation - Korea press.

- More press speculation that South Korea ruling-party (PPP) discussing Pres Yoon's potential resignation in Feb-Mar 2025 and snap elections two months later – press [overnight update].

- South Korea Parliament said to pass a downsized 2025 budget [overnight update].

- Reportedly US investment plans of Samsung and SK Hynix 'hit' and could be delayed by weaker Korean Won (KRW); cites industry sources - Korea Herald [overnight update].

- Bank of Korea (BOK) Gov Rhee: KRW (Korean won) is "unlikely to return to past levels" - financial press [overnight update].

Other Asia

- USD/INR Rupee trades at fresh record low; India Central Bank seen selling dollars to limit depreciation.

- China's Foreign Min Wang Yi: Want to expand trade and investment with Vietnam.

North America

- (US) Pres-elect Trump names Sen Ron Johnson (R-WI) as US Ambassador to Mexico.

- US govt said to consider tougher oil sanctions on Russia ahead of Trump Presidency - financial press.

- (AR) Argentina Pres Milei: Shut down of Central Bank to take 4 years - financial press interview.

- Google Said to request of FTC to 'kill' Microsoft's exclusive cloud agreement with OpenAI - TheInformation.

- (US) Pres-elect Trump names next FTC Chair as Andrew Ferguson (a current FTC Commissioner) - financial press.

- Weekly API Crude Oil Inventories:+0.5M v +1.2M prior (update).

- (US) Treasury Sec Yellen: Broad Trump tariff agenda could derail inflation progress - fireside chat.

- (US) Nov NFIB Small Business Optimism: 101.7 v 95.3e (highest since June 2021 and biggest m/m jump since 1980).

- (MX) Mexico Nov Consumer Confidence: 47.7 v 48.0e.

- (BR) Brazil Nov IBGE Inflation IPCA M/M: 0.4% v 0.4%e; Y/Y: 4.9% v 4.9%e.

- (US) Q3 final Nonfarm productivity: 2.2% V 2.2%E; unit labor costs 0.8% V 1.3%E.

- Manpower: Net Employment Outlook for first quarter of 2025 remains unchanged from Q4 2024, but down from the previous year, consistent with cooling labor markets.

- (US) Treasury Sec Yellen: Broad Trump tariff agenda could derail inflation progress - fireside chat.

- (US) US Pres-elect Trump: Any person or company investing $1B or more in the US will receive fully expedited approvals and permits - Truth social post.

- (US) Treasury's $58B 3-year note auction draws: 4.117%; BTC 2.58 V 2.60 prior and 2.56 over the last 8 auctions.

Europe

- (EU) ECB's Villeroy (France): Regardless of political situation, France needs to put public finances in order.

Levels as of 00:20 ET

- Nikkei 225 -0.2%, ASX 200 -0.5%, Hang Seng -0.2%; Shanghai Composite +0.1%; Kospi +0.5%.

- Equity S&P500 Futures +0.1%; Nasdaq100 +0.1%; Dax -0.1%; FTSE100 -0.1%.

- EUR 1.0520-1.0539; JPY 151.41-151.97; AUD 0.6336-0.6390; NZD 0.5789-0.5808.

- Gold +0.6% at $2,735/oz; Crude Oil +0.5% at $68.96/brl; Copper +0.5% at $4.2930/lb.