TradeTheNews.com Staff
TradeTheNews.com
General trend
- Trump Effect continues on companies, trade, finance and countries. In Asia various Asian leaders called Pres-elect Trump to congratulate him on his win. China Airlines's (Taiwan) order of as many as 20 passenger jets now said to be split equally between Boeing and Airbus with the choice at least partly being weighed against the backdrop of Trump's win. Korean shipbuilders +6-18% on the back of Trump reportedly asking Korea's Pres Yoon for their help for the USA. Thailand said it will benefit from the likely US-China rivalry by exporting more goods to the US.
- China's outsize trade surplus with the US continued, with another increase m/m. Steel exports were the highest for a single month since Sept 2015.
- Japan 10-year JGB yield rose over 1.00% [highest since Aug 1st].
- Nikkei 225 quickly up 1.2% but then fell to be down -0.3% after lunch. HK and CN equities recovered some of yesterday's losses.
- Australia trade surplus for Sept was lower than expected, with both exports and imports falling. Aussie Stats Agency said that goods credits (exports) fell $1.8B, -4.3%, driven by other mineral fuels.
- Japan labor cash earnings came in lower than expected, although USD/JPY saw no reaction. Later, top FX diplomate Mimura said that current market moves are “excessive”, and “closely watching markets with a "very high sense of urgency", warning to take appropriate action against excessive moves. USD/JPY -0.2%.
- Bank of England (BOE) and US FOMC rate decisions this evening and tonight respectively.
- US equity FUTs +0.2% during the Asia session.
Looking ahead (Asian time zone)
- Thu Nov 7th (Thu night BOE & FOMC policy decisions).
- Fri Nov 8th CN NPC-SCM Final Day, (Fri night US Nov prelim Michigan Consumer Sentiment).
- Sat Nov 9th CN CPI/PPI.
Holidays in Asia this week
- Mon Nov 4th Japan.
Headlines/economic data
Australia/New Zealand
- ASX 200 opens +0.1% at 8,210.
- Australia Sept Trade Balance Sep (A$): 4.6B v 5.3Be.
- RBA Gov Bullock: Recent China policy response is positive for Australia - parliamentary testimony (update).
- RBA Asst Gov Kent (Financial Markets): Large tariffs on China (by the US) could have adverse effects on Australia exports - financial press (update).
- Appliance maker Breville flagged probability of increased China tariffs has increased with Trump victory.
- New Zealand 3-Month Financial Statements (update).
- RBNZ Dep Gov Hawkesby: Domestic challenges remain with unemployment expected to rise further.
China/Hong Kong
- Hang Seng opens -0.7% at 20,386; Shanghai Composite opens -0.7% at 3,359.
- China Foreign Ministry: Congratulate Trump on his election as President; Pres Xi also said to have called Trump to congratulate him - US press, citing sources.
- China self-disciplinary mechanism said to tell banks to cut interbank deposit rates in order to support growth – US financial press.
- China PBOC: Held symposium with foreign financial institutions including HSBC, Standard Chartered and Citi; affirms to continue accommodative monetary policy stance.
- China said to step up efforts to support domestic exploration of lithium, cobalt and nickel resources – press [overnight update].
- China Pres Xi: Again urging Chinese officials to meet annual economic target - comments during Hubei visit [overnight update].
- China Oct Preliminary Retail Passenger Vehicle Sales M/M: +12.0% v +10.6% prior [overnight update].
- China said to appoint Li Bin as FX Regulator SAFE Dep chief [overnight update].
- China Foreign Ministry: Policy with US will be consistent; Will continue to work on basis of mutual respect [overnight update].
- China PBOC sets Yuan reference rate: 7.1659 v 7.0993 prior.
- China PBOC Open Market Operation (OMO): Injects CNY19B in 7-day reverse repos; Net drains CNY308B v net drains CNY414B prior.
Japan
- Nikkei 225 opens +0.7% at 39,826.
- JAPAN SEPT LABOR CASH EARNINGS Y/Y: 2.8% V 3.0%E.
- Japan Oct Tokyo Avg Office Vacancies: 4.5% v 4.6% prior.
- Japan 10-year JGB yield rises to 1.00% [highest since Aug 1st].
- Japan Fin Min Kato: Must take this chance to achieve escape from deflation and recovery in Japanese economy - financial press.
- Japan MOF Top FX diplomat Mimura: Currently seeing one-sided and excessive market moves - financial press.
Korea
- Kospi opens -0.2% at 2,557.
- South Korea Sept Current Account: $11.1B v $6.5B prior (revised lower).
- South Korea Pres Yoon: To focus on stabilizing inflation, home prices; Trump tells Yoon that American shipbuilding industry "needs South Korea help and cooperation".
- (RU) US officials: North Korean troops engaged in combat with Ukraine forces in Russia's Kursk region for the first time within the last few days – press [overnight update].
Other Asia
- Thailand Commerce Minister: Thailand must adapt during US-China trade war; Thailand will benefit from the rivalry. Will export more goods to the US.
- Philippines Q3 GDP Q/Q: 1.7% v 1.6%e; Y/Y: 5.2% v 5.7%e.
- Taiwan Pres Lai: Not seeking to arrange a call with Pres-elect Trump; A congratulatory letter has been sent - Taiwan Presidential Office.
- MALAYSIA CENTRAL BANK (BNM) LEAVES OVERNIGHT POLICY RATE UNCHANGED AT 3.00%; AS EXPECTED [overnight update].
- Taiwan Oct CPI Y/Y: 1.7% v 1.8%e [overnight update].
North America
- (US) Donald Trump Campaign: In days and weeks ahead, Pres Trump to begin selecting personnel to serve US and enact policies to "make the life of Americans affordable, safe and secure".
- (US) Pres-elect Donald Trump projected to win state of Arizona - Decision Desk HQ.
- (US) MBA Mortgage Applications w/e Nov 1st: -10.8% v -0.1% prior (6th straight decline).
- (CA) Canada Oct Ivey Purchasing Managers Index (seasonally adj): 52.0 v 53.1 prior.
- (US) DOE CRUDE: +2.1M V 0ME; GASOLINE: +0.4M V -1ME; DISTILLATE: +2.95M V -0.5ME.
- (US) TREASURY $25B 30-YEAR BOND AUCTION DRAWS 4.608% V 4.314% PRIOR; BID TO COVER 2.64 V 2.31 PRIOR AND 2.34 OVER THE LAST FOUR AUCTIONS.
- (US) VP Harris called Pres Elect Trump to concede election.
Europe
- (IL) Israel Central Bank (BOI) favor to retain the 1.0-3.0% inflation target.
- (EU) ECB’s De Guindos (Spain): Inflation is going in right direction and more confident of achieving the 2% target. Services component remains the main problem.
- (HU) Hungary Central Bank (MNB) Oct Minutes: Decision to keep policy steady was unanimous.
- (PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 5.75%; AS EXPECTED.
- (EU) ECB Chief Lagarde: Ring fencing of capital and liquidity along national lines would allow funds to flow freely within banking groups and facilitate cross-border lending.
- (DE) German Chancellor Scholz will submit a confidence vote on Jan 15th, which could trigger a snap election by end of March; US election outcome makes decision-making even more urgent.
Levels as of 01:20 ET
- Nikkei 225 -0.2%, ASX 200 +0.3%, Hang Seng +1.0%; Shanghai Composite +1.0%; Kospi +0.3%.
- Equity S&P500 Futures +0.2%; Nasdaq100 +0.2%; Dax -0.4%; FTSE100 -0.1.
- EUR 1.0713-1.0746; JPY 153.93 -154.72; AUD 0.6564-0.6625; NZD 0.5931-0.5989.
- Gold -0.4% at $2,664/oz; Crude Oil +0.4% at $72.00/brl; Copper +1.5% at $4.3010/lb.
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