JGBS: Subdued Session, Heavy Data Calendar Tomorrow, incl Tokyo CPI

APAC equity markets are generally lower in holiday-thinned trading as risk sentiment deteriorated following disappointing China manufacturing PMI data, although non-manufacturing surprised to the upside. US S&P and NASDAQ futures are down around 0.1% after the main indices fell on Monday. The USD index is slightly lower.

• The Hang Seng is the only main index that is higher today rising 0.1%. China’s CSI 300 fell 0.6%.
• The ASX closed down 0.9% driven by real estate and consumer durables, while energy was one of only two sectors to rise. NZ was also weak with the NZX 50 down 1.2%.
• Malaysia, Singapore and India are all lower.
• Japan, South Korea and Thailand are closed. New Zealand and Australia shut early.
• Other early finishes include Hong Kong at 12:00, Philippines at 11:55 and Singapore at 12:00.
• Germany, Italy, Switzerland, Sweden and Norway have holidays, the UK closes at 12:30 and France at 14:05.
• US October house price data and December Dallas Fed print later. 

Currency moves have been muted during today’s APAC trading given Japan, South Korea and Thailand are closed and volumes are generally light. The USD BBDXY index is off its intraday low to be down moderately. A deterioration in risk appetite has weighed on Aussie and Kiwi while benefiting the yen, as China’s December manufacturing PMI printed below expectations and is only just above the breakeven-50 mark.

• The yen outperformed the G10 on Monday and today USDJPY is down 0.3% to 156.40, close to the intraday low.
• AUDUSD is down 0.1% to 0.6215 after a low of 0.6211 earlier as the softer China manufacturing PMI and commodity/equity prices weigh. AUDJPY is 0.4% lower at 97.20.
• Kiwi has underperformed Aussie with NZDUSD down 0.2% to 0.5630 after a low of 0.5627. AUDNZD is 0.1% higher at 1.1040 after falling to 1.1024 early in trading.
• European currencies are little changed with EURUSD at 1.0407 and GBPUSD 1.2549.
• USDCNH fell to 7.3053 after the yuan fixing below Monday’s level. It is now flat on the day.
• Equities are generally weaker with the CSI 300 down 0.6%, ASX -0.9% but Hang Seng up 0.1%. The S&P e-mini is slightly lower. Copper is down 0.3% and iron ore down towards $100/t.
• Germany, Italy, Switzerland, Sweden and Norway have holidays, the UK closes at 12:30 and France at 14:05.
• US October house price data and December Dallas Fed print later. 

Oil prices have continued to move higher during APAC trading today and look set to finish December higher. They were boosted yesterday by forecasts for colder weather in the US and Europe, which also drove natural gas prices higher. Brent is up 0.5% to $74.38/bbl after a high of $74.59 earlier, and WTI is also 0.5% higher at $71.36/bbl after reaching $71.60. The USD index is down around 0.1%.

• Brent is currently up 4% in December, while WTI is 5.5% higher. Both benchmarks are likely to be little changed over the year with Brent currently up 0.3% and WTI +2.6%.
• Oil prices have found support from China’s manufacturing PMI remaining above 50 in December even though it was down 0.2 points and slightly lower than expected. The composite rose to 52.2 from 50.8 driven by non-manufacturing. Oil markets have been concerned about the strength of China’s demand for some time and are watching closely for any impact from policy stimulus.
• The supply outlook remains unclear but a market surplus is expected for 2025. US industry-based inventory data is published later today. There have been crude drawdowns but gasoline stocks have continued to build.
• Germany, Italy, Switzerland, Sweden and Norway have holidays, the UK closes at 12:30 and France at 14:05.
• US October house price data and December Dallas Fed print later.