- Asia equity markets were lower as the region followed suit from Wall St, where the major indices finished mostly lower
- AUD/USD was pressured and gave up the 0.7600 handle after Australian Q3 GDP figures disappointed
- Looking ahead, highlights include RBI and BoC rate decisions, ADP Employment, DoE’s and ECB’s Mersch
Asia equity markets were lower as the region followed suit from Wall St, where the major indices finished an indecisive trading day mostly negative. ASX 200 (-0.4%) and Nikkei 225 (-2.0%) weakened with miners dampened in Australia by losses across the metals complex in which gold slipped to near 4-month lows and copper prices slumped, while underperformance was seen in Japan as exporters took the brunt of a firmer JPY. Hang Seng (-1.7%) and Shanghai Comp. (-0.9%) conformed to the downbeat tone after the CBRC signalled further regulation in the financial sector and the PBoC skipped on Reverse Repo operations for a 4th consecutive day, but instead opted for its Medium-term Lending Facility. Finally, 10yr JGBs were relatively unchanged and failed to benefit from abroad risk-averse tone, while the BoJ’s Rinban operation for JPY 460bln of JGBs concentrated in the belly was also largely ignored.
PBoC skipped open market operations for a 4th consecutive day, but lent CNY 188bln via its Medium-term Lending Facility. (Newswires) PBoC set CNY mid-point at 6.6163 (Prev. 6.6113). (Newswires)
UK PM may is reportedly facing cabinet revolt led by Boris Johnson and Michael Gove over concerns she is forcing a soft Brexit. (Telegraph) Similar reports in the Guardian stated that Brexit supporters in May’s top team would object if they believed that anything was agreed that could limit the UK’s ability to diverge from the EU in the future. (Guardian)
EU’s Juncker said meeting with PM May ‘may be Wednesday, may be the day after, but not on Friday or Saturday’. (Sky News)
AUD/USD was pressured and gave up the 0.7600 handle after Australian Q3 GDP figures disappointed, which also dragged AUD/NZD to below 1.1000. Elsewhere, JPY firmed across the board on safe-haven flows, while GBP/USD was somewhat jittery following the recent setback in divorce bill negotiations and as reports also suggested that PM May faces revolt from her cabinet on concerns she is forcing a soft-Brexit.
Australian GDP (Q3) Q/Q 0.6% vs. Exp. 0.7% (Prev. 0.8%, Rev. 0.9%). (Newswires)
Australian GDP (Q3) Y/Y 2.8% vs. Exp. 3.0% (Prev. 1.8%, Rev. 1.9%)
Commodities were lacklustre overnight in which WTI crude futures pared gains following the latest API weekly inventory reportwhich despite showing headline crude inventories at a larger than expected drawdown, was accompanied by large builds in gasoline and distillate components. Elsewhere, gold was relatively flat which provided much needed reprieve from the prior day’s losses that saw the precious metal slump to near 4-month lows, while copper languished following its largest daily decline in 2 years amid increased LME inventories and as Shanghai prices tracked the losses.
US API weekly crude stocks (Dec 1) -5.481M vs. Exp. -3.4M (Prev. 1.821M). (Newswires)
US API weekly gasoline stocks (Dec 1) 9.196M vs. Exp. 1.7M (Prev. -1.529M)
US API weekly distillate stocks (Dec 1) 4.259M vs. Exp. 1.0M (Prev. 2.696M)
US flew B-1B bombers over the South Korean peninsula, according to the South Korean military. (Yonhap)
Russian Deputy Foreign Minister stated that North Korea has shown interest to Russia’s diplomatic initiative regarding settlement of the situation on the Korean Peninsula and stated that Kim Jong Un is ready for negotiations in any format. (Newswires/Tass)
US President Trump is to recognize Jerusalem as Israel’s capital, although will not specify timeframe for moving embassy to Jerusalem which will take years, according to senior administration officials. (Newswires)
US Senator Cornyn said he rejects the idea of a Stopgap spending bill through to December 30th. (Newswires)
US Democrat Rep. Al Green said he plans to force a vote on Wednesday for impeachment of President Trump according to reports, although the article also suggested that Democratic leaders view it as premature. (Politico)