Asia market update: Equites higher on tech positives; CN doubles down on JP trade war; JP budget expected; WH to relax CN AI chip curbs? Focus on delayed US Sept jobs release.

General trend and developments

– US Nasdaq FUTs sharply higher +1.9% after reopening in Asia following Nvdia again outperforming expectations on guidance (pronouncing that cloud GPUs are “sold out”), but the Nikkei and Kospi outdid those gains, rebounding 3-4% in the opening minutes from recent heavy losses. Google also up on latest Gemini AI release. Asia chip-relateds Advantest +10%, Tokyo Electron +5%, Renesas +2.7%,. Hynix +4%, Samsung +4.5%. Nikkei did pare some gains later, falling back below 50K again with Softbank paring from +9% to +2.6%.

– China followed up its re-issuance of a ban on Japanese seafood imports yesterday by expanding import bans to include Japanese beef late in the Wed session, threatening a full-on trade war – at least on the China side. Conflicting messages out of Chinese officials put forward the original 2023 reason of Fukushima nuclear plant safety issues but other rhetoric made it clear that China expects PM Takaichi to apologise for her recent comments that it was ‘existential’ for Japan to defend Taiwan.

– In a series of press reports starting from the NY session, indications 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.

– Waiting for Japan’s stimulus plan to be approved by PM Takaichi’s cabinet today, expected to be in the vicinity of ¥20-21T.

– Japan 10-year JGB yield rose another 7bps to 1.835%, as the belly of the curve outdid the 6bps rises at the long end, with today even the short end joining in; 2-years +2.5bps and 5 years +5.5bps.

– Japan BOJ’s Junko Koeda was mildly hawkish in her speech today, warning that Japan must normalise interest rates to avoid causing distortion in future – indicating she may be a potential third member to vote for a hike in December. (Yesterday, OIS chances of a BOJ rate hike in Dec rose slightly to 31.5% v 28% day before)..

– Koeda’s comments did not stop the decline of the JPY, hitting a fresh 10-month low at 157.54. Japan Fin Min Katayama said she will Not make direct comment on market moves. (Katayama also met with BOJ Gov Ueda last night, with Katayama saying there was no discussion on the size of stimulus package, nor any discussion on FX; Talk instead focused on reducing debt to GDP ratio).

– In trade-related news China Oct rare earth magnet exports were slightly down month-on-month, but exports to the US +56.1% compared to September.

– China said to weigh new property stimulus with mortgage subsidies as part of a ‘slew’ of options. News saw little effect on lagging China mainland equities today, but a China property stock gauge rose +3.3%.

– US equity FUTs +1.4% to 1.9% during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

– Thu Nov 20th, (Thu night US Sept Jobs – delayed release).

– Fri Nov 21st JP Oct CPI, JP Oct Trade Balance (delayed from Wed, Nov 19th), Nov Global Flash PMIs.

Holidays in Asia this week

– No holidays in Asia this week.

Headlines/economic dataAustralia/New Zealand

– ASX 200 opens +0.5% at 8,487.

– Australia Port Hedland Oct Iron Ore Exports: 49.5Mts; Iron ore exports to China 42.2Mts.

China/Hong Kong

– Hang Seng opens +0.7 % at 25,999; Shanghai Composite opens +0.4 % at 3,960.

– China Oct Swift Global Payments (CNY): 2.5% v 3.2% prior.

– China PBOC monthly loan prime rate (LPR) setting: Leaves rates unchanged (as expected).

– China Oct rare earth magnet exports 5.47KMt v 5.77KMt m/m; Exports to the US +56.1% m/m.

– China said to weigh new property stimulus with mortgage subsidies as part of a ‘slew’ of options – US financial press.

– Shanghai Gold Exchange said to issue ‘alerts’ to investors on the risks related to gold trading – US financial press.

– NVDA CEO Huang: Vera Rubin will deliver $35B per gigawatt; Has plenty of Blackwells to sell; China data center is zero; Wants the opportunity to reengage with China; Would be fantastic if Nvidia could participate in China.

– HKMA: China PBOC to issue Yuan-denominated billls in Hong Kong.

– USDA: China has purchased 330K tons of US soybeans for 2025-26 delivery (update).

– (US) White House said to be in no hurry to impose promised tariffs on chips, which may be a way to placate China – press.

– Fedex CEO: China-US trade flows are down, while China trade flows with Asia, LATAM are up – comments at Singapore New Economy Forum.

– White House Officials said to be pressing lawmakers to keep AI export restrictions on China out of the defense spending bill – Axios.

– MSFT (UK) Reportedly UK held talks with LinkedIn over Chinese espionage – press.

– (NL) Netherlands Econ Min Karremans: Suspended intervention at Nexperia as sign of goodwill (restores control back to China) [overnight update].

– China PBOC sets Yuan reference rate: 7.0905 v 7.0872 prior.

– China PBOC Open Market Operation (OMO): Injects CNY300B in 7-day Reverse Repos; Net injects CNY110B v injects CNY115B prior.

Japan

– Nikkei 225 opens +1.3%.

– Japan Oct Tokyo Condominiums for Sale Y/Y: -28.2% v +4.3% prior.

– Japan BOJ’s Junko Koeda: Must normalise interest rate to avoid causing distortion in future – meeting with local leaders in Niigata.

– Japan Fin Min Katayama: Hard to strike balance between price and rates, weak Yen; Will Not make direct comment on market moves – financial press.

– Follow Up: Japan $127.0B stimulus plan to include payouts to children – Japanese press.

– Japan releases weekly flows data [period ended Nov 14th]: Foreign buying of Japan equities: +¥1.02T v -¥347.3B prior; Japan buying of foreign bonds: ¥348.4 v ¥566.3B prior.

– BOJ Outright Bond Purchase Operation for for 1~3 Years; 3~5 Years; 5~10 Years and >25 Years; (Amounts inline with prior purchases).

– Japan Chief Cabinet Sec Kihara: Reiterates recent FX moves are sharp, one-sided – financial press.

– Japan 10-year JGB FUTs open lower by >30bps.

– Japan Fin Min Katayama: No discussion on size of stimulus package; No discussion on FX; Focused on reducing debt to GDP ratio – press conference after meeting BOJ Gov Ueda [overnight update].

Korea

– Kospi opens +2.6% at 4,030.

Other Asia

– Indonesia central bank (BI) leaves BI rate unchanged at 4.75%; as expected.

– Indonesia Central Bank (BI) Gov Warjiyo: Rupiah remains under control amid pressure; Global market uncertainty has risen again amid temporary US govt shutdown – pre-rate decision press conference.

– Philippines Oct Overall Balance of Payments (BoP): $0.7B v $0.1B prior [overnight update].

North America

– NVDA White House said to ask Congress to reject GAIN AI bill that would curb Nvidia exports – financial press.

– (US) Pres Trump confirmed to have signed bill to release Epstein files – US press.

– (US) White House said to be planning for an Executive Order to preempt state AI regulations – The Information.

– US Commerce Dept announces $20B in commercial deals, including GE for engines.

– (US) Pres. Trump: Communist Mayor of New York City, Zohran “Kwame” Mamdani, has asked for a meeting. We have agreed for Fri Nov 21st – post on Truth Social.

– (US) MBA Mortgage Applications w/e Nov 14th: -5.2% v +0.6% prior.

– (US) Aug trade balance: -$59.6B V -$60.4BE.

– (US) Five Democrats on the Senate Banking Committee sent a letter yesterday to seven major “buy now, pay later” lenders demanding data about their loan practices and credit reporting cooperation with FICO, the company whose credit scores are used by 90 percent of U.S. lenders – NYT.

– (US) Fed’s Miran (FOMC voter, dovish dissenter): Fed should consider exempting Treasuries and other central bank reserves from bank leverage rations; Strongly supports Feds efforts to streamline bank regulations; Would have supported immediate end to Fed’s quantitative easing at Oct 28-29th meeting – speech text.

– (US) White House NEC Dir Hassett: Sees convergence to border-adjusted cash-flow tax.

– (US) DOE CRUDE: -3.4M V 0ME; GASOLINE: +2.3M V 0ME; DISTILLATE: +0.4M V -1.5ME.

– (US) BLS: Nov employment report to be released on Dec 16th; Will not release Oct employment report, Oct Establishment Survey will be released with the Nov employment report.

– (US) FOMC Oct Minutes: `many’ saw December rate cut as likely not appropriate; strongly differing views on FOMC about appropriate course in Dec; several said December cut could well be appropriate.

– (US) Treasury $16b 20-year bond auction draws 4.706% v 4.876% prior, bid-to-cover 2.41 v 2.54 prior.

Europe

– (PT) Portugal Oct PPI M/M: +0.3% v -0.4% prior; Y/Y: -2.8% v -3.7% prior.

– (UK) Traders circulating UK press report published overnight saying that Labour left wing prepare to move against PM Starmer.

– (UK) PM Starmer: Next week’s budget to be based on Labor party values; Declines to comment on tax thresholds.

– (IL) Israel Nov 12-month CPI Forecast: 2.0% v 2.1% prior.

– (EU) Reportedly planning to adjust data protection rules and AI Act; Changing cookie rule to find one-click solution to give consent to combat ‘cookie fatigue’; To give businesses digital tools to sign, timestamp and seal documents – press.

– (SA) US Commerce Dept plans to approve export of 70K advanced AI chips to UAE and Saudi Arabia; Deal includes security agreements to deny China access to these advanced chips – WSJ.

– (UR) US said to have communicated to Ukraine Pres Zelenskiy that Ukraine must accept terms of 28-point peace plan, including loss of territory, giving up some weapons, reducing size of military, among other points – press.

Levels as of 01:20 ET

– Nikkei 225 +3.0%, ASX 200 +1.2%; Hang Seng +0.1%; Shanghai Composite +0.3%; Kospi +3.2%.

– Equity S&P500 Futures +1.4%; Nasdaq100 +1.9%; DAX +0.9%; FTSE100 +0.1%.

– EUR 1.1510-1.115.42; JPY 157.54-156.84 AUD 0.6476-0.6494; NZD 0.5615–5696.

– Gold -0.3% at $4,072/oz; BTC +2.3% at $92,816; Crude Oil +0.5% at $59.52bbl; Copper +0.1% at $5.0320/lb.