Asia Mid-Session Market Update: Aussie building approvals plunge and miners suffer from lower iron ore prices; Traders await OPEC decision on output
***US Session Highlights***
- (US) Q3 PRELIMINARY GDP ANNUALIZED Q/Q: 3.2% V 3.0%E; PERSONAL CONSUMPTION: 2.8% V 2.3%E
- (US) Q3 PRELIMINARY GDP PRICE INDEX: 1.4% V 1.5%E; CORE PCE Q/Q: 1.7% V 1.7%E
- (US) SEPT S&P / CASE-SHILLER 20-CITY HPI M/M: 0.37% V 0.40%E; Y/Y: 5.08% V 5.20%E; HOUSE PRICE INDEX (HPI): 191.78 V 191.53 PRIOR
- (US) Nevada reports Oct casino Rev $986.2B, +11% y/y; Las Vegas strip rev $562.7M, +14% y/y
- (US) NOV CONSUMER CONFIDENCE: 107.1 V 101.5E (highest since July 2007)
- (US) Fed's Powell (moderate, FOMC voter): case for hike has strengthened since Nov meeting
- Oil prices slump on reports Iran is unwilling to meet the Saudis' demand they cut production too as part of any deal that can be reached tomorrow
***US markets on close: Dow +0.1%, S&P500 +0.1%, Nasdaq +0.2%***
- Best Sector in S&P500: Healthcare
- Worst Sector in S&P500:4 Basic Materials
- Biggest gainers: ALXN +5.2%, CNC +3.9%, UNH +3.6%, ABBV +3.6%, CHTR +3.6%
- Biggest losers: MNK -9.1%, DO -6.7%, FCX -5.1%, DLPH -4.3%, BAX -4.0%
- At the close: VIX 12.9 (-0.3pts); Treasuries: 2-yr 1.10% (flat), 10-yr 2.30% (-2bps), 30-yr 2.95% (-3bps)
***US movers afterhours***
- SCON: DOE Awards $4.5M to improve HTS Wire for next generation machines; +70% afterhours
- FMSA: Announces debt repurchase of $213M of term loaned; +12.5% afterhours
- SPLK: Reports Q3 $0.12 v $0.08e, R$244.8M v $230Me; Raises FY17 guidance +6.9% afterhours
- ADSK: Reports Q3 -$0.18 v -$0.24e, R$490M v $477Me, Guides Q4 -$0.39 to -$0.32 v -$0.30e, R$460-480M v $485Me; -2.0% afterhours
- FTD: CFO Becky Sheehan to depart; effective Dec 31st; -2.3% afterhours
- NTNX: Reports Q1 -$0.37 v -$0.44e, R$167M v $152Me; -3.8% afterhours
***Politics***
- (US) Steven Mnuchin said to be Pres-elect Trump's choice for Treasury Sec; May be formally named as soon as Wednesday - NY Times
- (US) Wilbur Ross expected to be named Commerce Sec under Pres-elect Trump - US press
***Asia Session Notable Observations, Speakers and Press***
- Optimism for OPEC deal in Vienna subsides as Iran and Saudi energy mins remain at odds over output ceiling; Algeria has floated that OPEC cuts production to 32.5M bpd.
- China regulators curb speculative flows into commodities, sending Dalian Iron Ore into an 8% dive; BHP and Rio Tinto down nearly 4%.
- Dollar majors rangebound; USD/JPY most volatile with upside bias as US treasury yields rise in Asian trade.
- Australia building approvals fall at the fastest pace in 5 years; Westpac expects mortgage loans to decline sharply.
- Japan industrial output in line with forecasts in Dec; Nov m/m revised much stronger to 4.5% v 2.1% prior
- RBNZ semi-annual financial stability review notes the system is sound but faces risks in Housing, offshore financing, and dairy; Sees Housing inflation dependent on low rates and rising wages, Bank Funding at risk from sovereign rating changes / vulnerabilities in China or Europe, Dairy sector remains overleveraged.
China
- (CN) China said to be considering loosening some job security measures for workers in order to help companies stay in business as economy slows - financial press
- (CN) PBoC denies speculation regarding suspension of certain mortgage lending - financial press
- (CN) China NDRC official: Need to improve the institutional environment to increase the flow of private capital given its large consumption potential - Chinese press
Australia
- (AU) Macquarie economist McIntyre expects RBA to cut rates two more times in H1 of 2017 to 1% - SMH
- (AU) Australia Treasurer Morrison has resisted calls to review negative gearing - AFR
- (AU) Westpac economist: Latest housing data is a clear sign the dwelling construction boom is starting to turn down - SMH
***Asia Key economic data:***
- (AU) AUSTRALIA OCT BUILDING APPROVALS M/M: -12.6% (3rd straight decline, biggest decline in 11 month) V 2.0%E; Y/Y: -24.9% (biggest decline in 5 years) V -6.2%E
- (AU) AUSTRALIA OCT PRIVATE SECTOR CREDIT M/M: 0.5% V 0.4%E; Y/Y: 5.3% V 5.2%E
- (JP) JAPAN OCT VEHICLE PRODUCTION Y/Y: -4.0% V 1.4% PRIOR (first decline in 3 months)
- (JP) JAPAN OCT PRELIMINARY INDUSTRIAL PRODUCTION M/M: 0.1% V 0.0%E; Y/Y: -1.3% (3-month low) V -1.3%E
- (JP) JAPAN OCT ANNUALIZED HOUSING STARTS: 983K V 964KE; Y/Y: 13.7% V 11.0%E
- (CN) China Nov Westpac Consumer Confidence Index: 114.9 v 117.1 prior
- (NZ) NEW ZEALAND NOV ANZ ACTIVITY OUTLOOK: 37.6 (3-month low) V 38.4 PRIOR; BUSINESS CONFIDENCE: 20.5 (3-month low) V 24.5 PRIOR
- (NZ) New Zealand Oct Money Supply M3 y/y: 7.1% v 4.8% prior; 5-month high
- (KR) SOUTH KOREA OCT INDUSTRIAL PRODUCTION M/M: -1.7% V -0.5%E; Y/Y:-1.6 % V -1.3%E
***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +0.2%, Hang Seng +0.1%, Shanghai Composite -1.1%, ASX200 -0.4%, Kospi +0.1%
- Equity Futures: S&P e-mini flat, Dax flat, FTSE100 -0.1%
***FX ranges/Commodities/Fixed Income (00:00ET):***
- EUR 1.0625-1.0660; JPY 112.05-112.95; AUD 0.7460-0.7495; NZD 0.7125-0.7160
- Dec Gold flat at 1,190/oz; Jan Crude Oil +0.5% at $45.47/brl; Mar Copper -1.3% at $2.57/lb
- (US) Weekly API Oil Inventories: Crude: -0.7M v -1.3M prior; 2nd consecutive draw
- Algeria reportedly proposes OPEC cut to 32.5M bpd; proposes Angola cut from Sept output level - press
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.8865 V 6.8889 PRIOR (3rd consecutive firmer setting; Strongest fix in a week)
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥420B in 3-5yr JGBs, ¥190B in 10-25yr JGBs, and ¥110B in JGBs with maturity over 25-yr
- (AU) Australia Finance Ministry (AOFM) sells A$900M in 4.25% 2026 bonds; avg yield 2.6436%; bid-to-cover 2.33x
***Asia equities / Notables / movers by sector***
- Consumer discretionary: Boyaa Interactive International 434.HK -1.6% (9mo result); Bosideng International Holdings 3998.HK +1.4% (H1 result); Aristocrat Leisure ALL.AU +1.0% (FY16 result); JB Hi-Fi JBH.AU +3.0% (Credit Suisse raised to neutral); L'Occitane 973.HK -1.7% (H1 result)
- Consumer staples: Golden Resources Development International 677.HK -1.1% (H1 result)
- Financials: China Vanke Co 000002.CN +1.1% (Evergrande raises stake); Mitsubishi UFJ Financial Group 8306.JP -0.6% (UBS cuts to neutral)
- Technology: Samsung Electronics 005930.KR +3.4% (momentum following corporate structure shift)
- Materials: St Barbara SBM.AU +0.9% (guidance); BHP.AU -3.7%, RIO.AU -3.8%, Fortescue FMG.AU -4.5% (Dalian Iron Ore falls 8%)
- Energy: China Gas Holdings 384.HK -4.7% (H1 result)
- Healthcare: Pulse Health PHG.AU +8.5% (acquisition)
- Telecom: China Unicom 762.HK +7.9% (mixed-ownership reform); Amaysim Australia AYS.AU -12.4% (guidance); Vocus Communications VOC.AU -6.6% (Morgan Stanley cuts to equal weight); NTT DoCoMo 9437.JP -0.8% (speculation over additional spending cut)
- Utilities: Chugoku Electric Power Co. 9504.JP +4.6% (raises guidance)