MNI EUROPEAN OPEN: China Tech Stocks Slump On Gaming Curbs

EXECUTIVE SUMMARY

• NIPPON’S BID FOR US STEEL DESERVES SERIOUS SCRUTINY: BRAINARD - BBG
• CHINA HOME SALE VOLUMES TO REBOUND, PRICES REMAIN WEAK - MNI
• CHINA’S 30YR YIELD HITS LOWEST SINCE ‘05 ON DEPOSIT RATE CUTS - BBG
• NEW GAMING CURBS SEND CHINESE TECH STOCKS LOWER - BBG
• JAPAN NOV CORE CPI RISES 2.5% VS. OCT’S 2.9% - MNI BRIEF

Fig. 1: Hong Kong Equity Indices

Source: MNI - Market News/Bloomberg

U.K.

CORPORATE (BBG): Shell Plc has begun cutting jobs beyond previously announced reductions in its low-carbon division as Chief Executive Officer Wael Sawan seeks to trim costs and be more competitive with US rivals, people familiar with the matter said.

EUROPE

CHINA/HUNGARY (FT): BYD is in final talks with the Hungarian government for a multibillion-euro investment into a new EV factory, Financial Times reports, citing three unidentified people familiar with the matter.

SWITZERLAND/UK (RTRS): Britain and Switzerland signed a wide-ranging financial services deal on Thursday granting reciprocal market access for their banks, insurers, asset managers and stock exchanges to boost trade and cut compliance costs.

U.S.

FED (BBG): Banks borrowed a record amount from the Federal Reserve’s newest backstop facility in the most recent week as increasing wagers on interest-rate cuts made it a more attractive choice.

CORPORATE (WSJ); The Biden administration's top economic adviser said Thursday the $14.1 billion deal to acquire U.S. Steel by Japan's Nippon Steel deserved "serious scrutiny" regarding its potential impact on national security and supply chains.

CORPORATE (BBG): Nike Inc. said it’s looking for as much as $2 billion in cost savings by dismissing workers and simplifying the sneaker company’s product assortment amid a weaker sales outlook.

US/CHINA (BBG): General Charles Brown, chairman of the US Joint Chiefs, spoke with his Chinese counterpart for the first time in a call that the Biden administration billed as a further sign that ties between the two countries’ militaries may be getting back to normal.

US/SAUDI ARABIA (NYT): Some lawmakers are likely to oppose the move, but officials said the Biden administration has noted the kingdom’s de facto cease-fire with the Houthi militia in Yemen. The Biden administration is preparing to relax restrictions on some weapons sales to Saudi Arabia, U.S. officials said on Thursday, crediting the kingdom’s peace talks with a militia in Yemen for hastening an easing of the constraints.

OTHER

JAPAN (MNI BRIEF): Japan's annual core consumer inflation rate decelerated to 2.5% y/y in November from October's 2.9%, the first slowdown in two months but remaining above the Bank of Japan's 2% target for the 20th straight month, data released by the Ministry of Internal Affairs and Communications showed on Friday.

JAPAN (BBG): Japan’s Government Pension Investment Fund is open to increasing its active allocation in stocks and tapping more fund managers for that purpose, according to Chief Investment Officer Eiji Ueda.

CANADA (BBG): The Canadian government approved Royal Bank of Canada’s landmark deal to acquire HSBC Holdings Plc’s Canadian operations, handing a major regulatory win to one of North America’s largest financial institutions.

AUSTRALIA (BBG): Australia's credit to business, consumers rose as much as economists expected in November. Credit to business, consumers rose 0.4% m/m (estimate +0.4%) in November versus +0.3% in October, according to the Reserve Bank of Australia.

CHINA

PROPERTY (MNI): Beijing and Shanghai’s latest round of house-market relaxations may help boost volumes and revive the ailing property sector over the next few months, but price weakness will likely persist as over-leveraged developers offer discounts to boost sales, policy advisors told MNI.

TECH (BBG): Chinese technology companies tumble in Hong Kong after China says online games should not contain inducive rewards to get users to log on daily.

BOND YIELDS (BBG): A fresh round of large banks’ deposit rate cuts turbocharged Chinese government bonds, driving some ultra-long yields to the lowest in nearly two decades, as the move may steer investment toward the debt market.

DEPOSIT RATES (SECURITIES TIMES/BBG): There exists room for Chinese banks to continue lowering deposit rates next year, as they are faced with heightened net interest margin pressures, Securities Times reports, citing analysts.

SUPPLY CHAINS (ECON DAILY/BBG): China needs to strengthen its supply chains in order to cope with rising geopolitical tensions and trade protectionism, as well as to keep up with developments in industry, the Economic Daily said in a commentary on Friday.

CONSUMPTION (BBG): China must continue to enhance national strength and global competitiveness to boost national security, said Zheng Shanjie, chairman of the National Development and Reform Commission, in a signed article published on Friday in Study Times.

CHINA MARKETS

MNI: PBOC Injects Net CNY281 Bln Via OMO Fri; Rates Unchanged

The People's Bank of China (PBOC) conducted CNY40 billion via 7-day reverse repo and CNY291 billion via 14-day on Friday, with the rates unchanged at 1.80% and 1.95%, respectively. The reverse repo operation has led to a net injection of CNY281 billion reverse repos after offsetting CNY50 billion maturity today, according to Wind Information.

• The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.7833% at 09:34 am local time from the close of 1.8050% on Thursday.
• The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 44 on Thursday, compared with the close of 46 on Wednesday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.

PBOC Yuan Parity Lower At 7.0953 Friday vs 7.1012 on Thursday

The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.0953 on Friday, compared with 7.1012 set on Thursday. The fixing was estimated at 7.1306 by Bloomberg survey today.

MARKET DATA

JAPAN NOV NATIONAL CPI Y/Y 2.8%; MEDIAN 2.8%; PRIOR 3.3%
JAPAN NOV NATIONAL CPI EX FRESH FOOD Y/Y 2.5%; MEDIAN 2.5%; PRIOR 2.9%
JAPAN NOV NATIONAL CPI EX FRESH FOOD, ENERGY Y/Y 3.8%; MEDIAN 3.8%; PRIOR 4.0%

AUSTRALIA NOV PRIVATE SECTOR CREDIT M/M 0.4%; MEDIAN 0.4%; PRIOR 0.3%
AUSTRALIA NOV PRIVATE SECTOR CREDIT Y/Y 4.7%; PRIOR 4.7%

MARKETS

UP TODAY (TIMES GMT/LOCAL)

Date	GMT/Local	Impact	Flag	Country	Event
22/12/2023	0700/0700	***		UK	Retail Sales
22/12/2023	0700/0800	**		SE	Retail Sales
22/12/2023	0700/0800	**		SE	PPI
22/12/2023	0700/0700	***		UK	GDP Second Estimate
22/12/2023	0700/0700	*		UK	Quarterly current account balance
22/12/2023	0700/0800	**		DE	Import/Export Prices
22/12/2023	0745/0845	**		FR	Consumer Sentiment
22/12/2023	0745/0845	**		FR	PPI
22/12/2023	0800/0900	***		ES	GDP (f)
22/12/2023	0900/1000	**		IT	ISTAT Business Confidence
22/12/2023	0900/1000	**		IT	ISTAT Consumer Confidence
22/12/2023	1330/0830	***		CA	Gross Domestic Product by Industry
22/12/2023	1330/0830	**		US	Durable Goods New Orders
22/12/2023	1330/0830	**		US	Personal Income and Consumption
22/12/2023	1400/1500	**		BE	BNB Business Sentiment
22/12/2023	1500/1000	***		US	New Home Sales
22/12/2023	1500/1000	**		US	U. Mich. Survey of Consumers
22/12/2023	1530/1530			UK	Publication of the Treasury Bill Calendar for January - March 2024
22/12/2023	1800/1300	**		US	Baker Hughes Rig Count Overview - Weekly