Asia market update: Quiet and mixed session following Vol last week, JP holiday + Thanksgiving mode; Focus on geopolitics and overdue US data this week.
– A mainly positive opening to the week Asia with Japanese markets on holiday. Kospi initially outperformed +1.7% after Friday’s nearly -5% fall. (Samsung +2%), Kospi later pared a majority of gains. JPY lost a little of its Friday rebound vs USD. US equity FUTs jumped up half a percent at the re-open and held. Bitcoin +10% at its best today after a weekend of recovery, up from $80K lows on Fri, with Gold -1.0% and silver a bit weaker.
– Shanghai Composite under-performed Asia today following on from its biggest one-day loss since Apr 7th last Friday (-2.5%), despite earlier reports on Fri of the China ‘National Team’ buying up a basket of 8 ETFs to support soft stock prices during the trading session.
– South Korea reportedly cooperating with Taiwan to reduce US chip tariffs for both nations.
– Another BOJ board member (new member Kazuyauki Masu from Mitsubishi Corp who replaced perennial dove Nakamura at end-Jun), implied he was open to raising rates but gave no hint on which month (next BOJ meeting is Dec 18-19th). Comes amid attention on PM Takaichi’s biggest budget since Covid, JP yields at multi-decade highs and renewed attention on the Yen carry trade and how any further unwinding (over and above Aug 2024) might negatively impact the AI Capex boom.
– NZIER shadow board recommends New Zealand RBNZ cuts by “a further small cut” of 25bps to 2.25% on Wed, Nov 26th in order to support the economy.
– PM Takaichi continuing to outperform many years of ruling party political support by the Japanese public, having now been in power for over a month and still with high cabinet approval ratings averaging >70%.
– Meanwhile China’s Foreign Direct Investment continues to plumb early 1990’s levels, still down -10% YTD up through end-October.
– Further reports late Friday the Trump Admin is considering to allow Nvidia to sell its H200 chips to China (H200 is part of Nvidia’s prior Hopper-gen of chip released in late 2023, prior to the current Blackwell-gen, with Rubin-gen to come next year). **Note: Reports come after a series of press reports last week that the White House may be taking a softer line with AI chips and China, asking Congress to reject the GAIN AI bill that would curb Nvidia exports, pressing lawmakers to keep AI export restrictions on China out of the defense spending bill, and said to be “in no hurry’ to impose promised tariffs on chips, which may be a way to placate China.
– US Fed voter Collins spoke over the weekend; Still not made mind up about Dec rate decision, but still hesitant about a cut. (Comes after Fed’s Williams on Friday gave the market succor after saying Fed can still cut rates in the near term).
– G20 came and went in South Africa during the weekend with little in the way of major developments.
– Geopolitical focus this week on progress or otherwise of US-backed 28-point peace plan between Russia and Ukraine, amid reports US threatening to cut off intelligence and weapons to Ukraine if it doesn’t agree. White House today said Ukraine believes current draft reflects their national interests. No deal-breaker signals coming out of Ukraine thus far. Zelenskiy may visit White House this week. EU also only pushing back around the margins, e.g. recommending 800K max troops for Ukraine instead of 600K as per initial US plan.
– Focus also on the White House as it considers options on Venezuela, reportedly including covert ops and even a potential overthrow of Pres Maduro.
– This week some more delayed US data from the govt shutdown: Tue night (Asia time) sees US Sept PPI, US Sept Retail Sales & US Aug Business Inventories, with Wed night seeing US Sept Durable Goods.
– White House also said to be preparing alternate plans for tariffs if it loses Supreme Court ruling on IEEPA emergency tariffs.
– US equity FUTs +0.5% to 0.6% during Asian trading.
Looking ahead (Asian-weighted releases, using Asian time zone).
– Mon Nov 24th (Mon eve DE Nov Ifo Business Climate).
– Tue Nov 25th KR Nov Business Confidence (Tue night delayed US Sept PPI, US Sept Retail Sales, US Aug Business Inventories).
– Wed Nov 26th AU Oct CPI, NZ RBNZ Rate Decision, (Wed eve UK Autumn Budget, DE Dec Consumer Confidence) (Wed night delayed US Sept Durable Goods).
– Thu Nov 27th NZ Nov Biz Confidence, KR BOK Rate Decision, JP MOF meetings with JGB investors & dealers, JP BOJ’s Noguchi.
– Fri Nov 28th JP Oct Retail Sales & Industrial Production, (Fri eve: various EU Nov prelim CPI).
Holidays in Asia this week.
– Mon Nov 24th Japan.
– Thu Nov 27th US Thanksgiving (US time).
– Fri Nov 28th US Thanksgiving half-day (early close, US time).
– ASX 200 opens +1.1% at 8,508.
– NZIER RBNZ Shadow Board: Majority of members recommend RBNZ cut a further 25bps in Nov [ahead of Nov 26th Monetary Policy Review and OCR] – update.
– Hang Seng opens +0.9% at 25,452; Shanghai Composite opens +0.4% at 3,848.
– China Oct YTD Inbound Foreign Direct Investment [FDI] (CNY) Y/Y: -10.3% y/y [weekend update]- Reportedly China exchange’s move to curtail
lithium market speculation causes lithium prices to drop – press [weekend update].
– (US) Follow up: Reportedly Trump administration pauses plans for Executive Order that would preempt state laws governing AI [weekend update].
– NVDA Reportedly Trump Admin is ‘internally’ considering allowing sales of NVIDIA H200 chips to China – financial press [weekend update]
– China PBOC sets Yuan reference rate: 7.0847 v 7.0875 prior.
– China PBOC Open Market Operation (OMO): Injects CNY339B in 7-day Reverse Repos; Net injects CNY56B v injects CNY162B prior.
– Nikkei closed for holiday.
– At G20 Japan PM Takaichi met with Pres of France, PM of India, Chancellor of Germany, PM of Italy (update).
– Japan Takaichi cabinet approval rating holds steady at 72% in Yomiuri poll, 75.2% in FNN poll and 65% in Mainichi poll – Japanese press.
– BOJ Board Member Masu: Close to decision to raise rates, can’t say which month; The environment is favorable for raising rates – Nikkei interview [weekend update].
– TTN Research Alert: New AI-and-carry regime; Yen-funded leverage is being quietly repriced as Japan’s fiscal binge, an AI capex arms race and a surprisingly fragile Yen converge into a single question about how durable the global carry trade really is. [weekend update].
– Kospi opens +1.6% at 3,915.
– South Korea Trade Min Yeo: South Korea sees ‘room for cooperation’ with Taiwan on US chips tariffs – financial press.
– BOK, National Pension Service (NPS) may hold currency-related meeting today (Mon), to stabilize FX market – South Korea press.
– South Korea Finance Ministry sells KRW2.8T vs KRW2.8T indicated in 5-year bonds: Avg Yield: 3.060% v 2.735% prior.
– Singapore Oct CPI M/M: 0.0% v -0.1%e; Y/Y: 1.2% v 0.9%e.
– Thailand Central Bank (BOT) Chief: There is room to cut interest rates; Concerned about slow economic growth [weekend update].
– (US) White House said to be preparing alternate plans for tariffs if it loses Supreme Court ruling – US financial press [update].
– US) Treasury Sec Bessent: US economy as a whole not at risk of recession – NBC press interview (update).
– Canada PM Carney: Confirms intensifying FTA talks with Mercosu.
– (US) Fed’s Collins (voter in 2025; non-voter in 2026): Have not made mind up about Dec rate decision, still see reasons to be hesitant about a cut [weekend update].
– (VE) Reportedly White House considering options on Venezuela including an attempt to overthrow the Maduro govt – press [weekend update].
– (US) Trump administration reportedly threatening Ukraine to once again cut intelligence sharing and weapons supplies if it rejects US-Russia 28-pt plan; Wants Ukraine to sign framework agreement by Thurs (Nov 27th) – press [weekend update].
– (US) CDC and The Washington State Department of Health Confirm Washington man died from complications tied to H5N5 bird flu infection, the first recorded instance of a human contracting this avian influenza strain worldwide [weekend update].
– WorldACD Weekly Air Cargo Trends (week 46): Rates continue rising as Southeast Asia to US demand booms [weekend update].
– (CH) Swiss Economy Minister Parmelin: US tariffs on Switzerland may be cut to 15% in Dec – press interview.
– (US) Follow up: US Sec of State Rubio in Geneva for Ukraine peace plan talks; We have had the most productive and meaningful meeting with Ukraine so far – US officials (update).
– (UR) White House: Ukraine affirmed their principal concerns on 28-point peace plan with Russia, but state they believe current draft reflects their national interests – financial press.
– (EU) Commission Pres Von der Leyen: Europe is doubling down on core belief that rules-based trade delivers – comments at G20 [weekend update].
– (EU) ECB’s Muller (Estonia): Sees we will have inflation closer to 2% target for the foreseeable future but we must remain vigilant [weekend update].
– (UR) Germany govt: Ukraine, UK, France and Germany agree that current (battle) contact line is starting point for peace agreement [weekend update].
– G20 Summit Declaration: Note that the benefits associated with critical minerals have not been fully realised and producer countries, especially in the developing world [weekend update].
– Nikkei 225 closed, ASX 200 +1.3%; Hang Seng +1.7%; Shanghai Composite -0.2%; Kospi +0.5%.
– Equity S&P500 Futures +0.5%; Nasdaq100 +0.6%; DAX +0.9%; FTSE100 +0.6%.
– EUR 1.1502-1.115.29; JPY 156.39-156.80; AUD 0.6449-0.6466; NZD 0.5603–5615.
– Gold -1.0% at $4,077/oz; BTC +1.5% at $87,880; Crude Oil +0.4% at $58.05bbl; Copper -0.3% at $5.0835/lb.
