US labor data exceeds expectations; Japanese government is not expected to obstruct central bank rate hikes
U.S. initial jobless claims hit a more than three-year low, and corporate layoffs in November declined. Key Japanese government officials reportedly will not obstruct the central bank from raising interest rates in December.
Overnight Highlights
· U.S. stocks closed nearly flat on Thursday, with rising hopes for a Fed rate cut next week also providing a boost. U.S. Treasury prices fell, ending a three-day winning streak. Data showed the labor market remains resilient, reinforcing views that the economy is not deteriorating sharply. The dollar was little changed against a basket of currencies but remained near a five-week low hit during the session. Oil prices rose as the Ukraine peace talks reached an impasse, dampening expectations for a deal to resume Russian oil exports. Gold prices were little changed as rising U.S. Treasury yields offset support from a weaker dollar.
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International News
· U.S. initial jobless claims last week hit a more than three-year low. The Challenger report showed that U.S. employers announced fewer layoffs in November, though the figure remained the highest for the same period since 2022.
· White House National Economic Council Director Hassett said the Fed appears to have reached a consensus on cutting rates by 25 basis points next week.
· The U.S. government's outstanding debt exceeded $30 trillion for the first time, more than doubling since 2018.
· White House officials said the U.S. government plans to increase its stake in critical minerals companies. Trump said the U.S. will sign bilateral agreements with Congo and Rwanda to secure critical minerals and rare earths.
· Putin rejected parts of a peace plan, and a Ukrainian envoy will travel to the U.S. for a new round of talks.
· Key Japanese government officials reportedly will not obstruct the central bank from raising interest rates in December, a stance that makes a rate hike more likely.
· Meta (META.US) CEO Zuckerberg reportedly plans to cut the metaverse project budget by up to 30%, with the virtual reality division likely to bear the brunt.
· The EU launched an antitrust investigation into Meta over concerns that WhatsApp's AI features could harm industry competition.
· Market participants are bullish on Alphabet's (GOOGL.US) AI chip TPU, which could generate nearly $1 trillion in revenue for Google's parent company.
Greater China News
· China will urge food delivery platforms to standardize promotional activities and create a fair and orderly market competition environment.
· China's slow pace of U.S. soybean purchases has raised questions, with U.S. Treasury Secretary Besant reportedly extending the deadline to the end of February next year.
· Nomura believes there is a slight increase in the likelihood that China's leadership will lower the 2026 GDP growth target to 4.5%-5.0%. Deutsche Bank expects China may allow further yuan appreciation next year, with limited impact on exports.
· Cambricon (688256.CH) reportedly plans to triple chip production, aiming to replace Nvidia (NVDA.US) products in China. The company responded that media reports on Thursday about its products, customers, and capacity forecasts were false.
· China's rising AI chip star Moore Threads (688795.CH) will list on the Shanghai STAR Market on Friday.
· The Financial Times: U.S. senators from both parties seek to ban Nvidia from selling H200 and Blackwell chips to China.
· Country Garden (2007.HK) appointed President Mo Bin as co-chairman of the board, with executive director Cheng Guangyu succeeding Mo as president. Additionally, adjustments will be made to the principal and interest repayment arrangements for a total of nine bonds issued by Country Garden and its two subsidiaries.
Commodities & Forex
· Oil prices rose as the market weighed geopolitical tensions against Saudi Arabia's cut in crude prices for Asia.
· Gold prices stabilized as rising U.S. Treasury yields offset support from a weaker dollar, while the market awaits U.S. inflation data on Friday for clues on the Fed's policy outlook ahead of the December meeting. Read: [Market Review] Gold 2026 Outlook: Structural Opportunities Under Central Bank Buying and Easing Cycles.
Earnings & Economic Data Focus
· U.S. September Core PCE Price Index YoY (Prev: 2.9%, Forecast: 2.9%)
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Source: Golden Horse Capital Management (Hong Kong) Limited
Author: Terry Chow
Proofreader: Emily Zheng
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