EQUITIES: Asian Equities Mixed, Ranges Narrow, US PCE Later
Asian equities are mixed on today as investors continue to digest the Fed's hawkish policy stance and awaited US personal consumption expenditure data for November. The US has been unable to pass the stopgap funding bill yet, but overall it has been a rather quiet session as we head into the Holidays, focus will now turn to PCE numbers later tonight.
- The data calendar saw some tier 2 data today, nothing of which really moved markets at all. New Zealand's Trade Deficit narrowed, Japan's National CPI was largely in line with expectations, while China kept the 1 & 5yr LPRs unchanged.
- Japanese equities are trading only slightly higher with the Nikkei +0.10% & TOPIX +0.05% exporters have been the top performing following the weakening of the JPY. Banking stocks have lagged after the BoJ left interest rates unchanged, with comments from Governor Ueda dampening expectations for a January hike.
- Hong Kong equities are trading slightly higher, however ranges are narrow. The HS Tech Index did trade 1% earlier, before paring some of those gains, the Mainland Property Index is 1.20% lower, while the wider HSI is 0.10% higher. In China mainland equities, the CSI 300 is 0.30% higher, with Tech stocks leading the way, Industrials are the worst performing sector.
- Australia's ASX200 fell 1.3% to a seven-week low, with a weekly decline of 2.8%, marking one of its worst performances this year. Consumer discretionary stocks led losses, with Wesfarmers down 3.4% after announcing a $770 million divestment. Major banks and miners also declined, though Fortescue managed a 1.2% gain.
- South Korea's KOSPI declined 1.8% as foreign and institutional investors sold heavily following the Fed's hawkish stance. The KRW hovered at a 15-year low of 1,450 per dollar. Tech giants like Samsung Electronics and SK hynix fell 1.7% and 3.4%, respectively.
- Taiwan’s Taiex declined 1.10%, led by losses in semiconductor stocks, including TSMC, last -1.90%.
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AUSSIE BONDS: Little Changed, RBA Governor Speech Tomorrow
ACGBs (YM -1.0 & XM +0.5) are slightly mixed, with a flattening bias, in today’s data-light Sydney session.
- "Investors such as UBS Asset Management and Jamieson Coote Bonds Pty see value in Australian bonds as the global debt selloff looks stretched and anticipation of a policy pivot grows." (See link)
- The latest round of ACGB Dec-35 supply showed strong pricing, with the weighted average yield printing 0.47bp through prevailing mids. The higher outright yield and steep curve likely aided the absorption of today’s ACGB supply. However, the notable worsening in global bond sentiment likely weighed on demand at today’s auction.
- Cash US tsys are little changed in today’s Asia-Pac session after yesterday’s modest haven demand-induced gains.
- Cash ACGBs are flat, with the AU-US 10-year yield differential at +16bps.
- Swap rates are little changed.
- The bills strip is slightly cheaper across contracts, with pricing flat to -3.
- RBA-dated OIS pricing shows no easing by year-end. A 25bps rate cut is not fully priced until July.
- Tomorrow, the local calendar will see a speech by RBA Governor Bullock at the Women In Payments Conference.
FOREX: USD Ticks Higher, USD/JPY Close To 155.00, Aggregate Moves Modest
The earlier outperformance from risk currencies has given way to a firmer USD backdrop as Wednesday trade has unfolded. The USD BBDXY index was last around 1279.15, a touch higher for the session.
- Aggregate FX moves are not large at this stage. USD/JPY has traded with a positive bias, but is yet to break above 155.00. US yields sit close to unchanged, albeit with a slight bias to move higher at the back end.
- US equity futures are off earlier highs but still sit in positive territory, last +0.1%. This comes ahead of the key Nvidia earnings release. Regional equities are mixed, but aggregate moves aren't much beyond 0.50% at this stage.
- AUD and NZD sit off earlier highs, but are only down 0.10% at this stage. AUD/USD last near 0.6525, NZD just under 0.5900. EUR/USD has slipped back under 1.0600.
- We remain within broader ranges though, as markets await fresh catalysts. Technical indicators still suggest USD dips will be supported.
EQUITIES: China & HK Equities Trade In Narrow Ranges Ahead Of Nvidia Earnings
Hong Kong and China equities are mostly higher today, with earlier losses now being erased. China's central bank kept its loan prime rates unchanged, in line with expectations. The HSI is trading flat with losses in Geely Automobile, Xiaomi, and Alibaba offsetting wider gains, while the CSI 300 now trades 0.2% higher. Investors remained cautious ahead of Nvidia's earnings, which could serve as a key catalyst for global sentiment. Meanwhile, Chinese tech stocks faced uncertainty amid geopolitical concerns tied to the next Trump administration.
- China healthcare stocks are the top performing today, the CSI 300 Healthcare Index is 2.45% higher with Tigermed jumping 8%. Small & mid-cap stocks out outperforming large-cap today, with the CSI 2000 up 2.50%, while the CSI 1000 trades 1.60% higher.
- Hong Kong listed equities are trading in narrow ranges today, with major benchmarks trading little changed.
