Asian markets showed a muted response to China's pledges of further stimulus measures in 2025, while South Korean political drama was largely ignored by investors. The Hang Seng index rebounded, but the Shanghai Composite fell. China bond yields continued their downward trend. The Kospi index in South Korea surged despite political tensions. US markets futures were slightly positive.
Asia market update: Muted market response to China's affirmation of stimulus pledges (NDRC, PBOC); KR political drama continues, also shrugged off by markets; Focus on US Dec ISM Manufacturing PMI. General trend - Hang Seng rebounded somewhat +0.8% amid various China officials saying more support would be forthcoming in 2025, including fiscal support as well as for institutional buying. However, the news did not help the Shanghai Composite, -0.5%.
- FT said it was informed by the China PBOC itself that it planned a policy overhaul amid economic pressure, potentially cutting the key 7-day reverse repo rate (currently 1.5%) at some time in 2025. Comments were in-line, though significant coming directly from the China PBOC. - China bond yields continued their relentless fall. 10-year bond yields are now down 100+ basis points over the last year. - South Korean political drama continued as reports of up to 2,700 police faced-off against military forces inside the Presidential compound, refusing the arresting team access to arrest suspended Pres Yoon. Later in the day the anti-corruption team said it had stopped execution of the arrest warrant, calling the situation 'impossible’. Kospi index shrugged off the developments, +2.4% at its best to lead Asia even as the tense events unfolded. - Helped by a weekly draw reported by the US DOE, WTI touched $73 for the first time since October.- US equity FUTs +0.2% to +0.3% during Asian trading. Looking ahead (Asian time zone) - Fri Jan 3rd KR Q4 Adv GPD, (Fri night US Dec ISM Manufacturing PMI). Holidays in Asia this week - Mon Dec 30th Philippines. - Tue Dec 31st Australia, Japan, New Zealand, Philippines, Singapore, South Korea, Thailand (China markets will be open, HK to close early). - Wed Jan 1st Global markets holiday. - Thu Jan 2nd Japan, New Zealand. - Fri Jan 3rd Japan. Headlines/economic data Australia/New Zealand - ASX 200 opens flat at 8,200. - New Zealand Dec CoreLogic Home Prices M/M: -0.2% v -0.2% prio
ASIA MARKETS CHINA STIMULUS SOUTH KOREA POLITICS GLOBAL ECONOMY
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