BTC and KR volatility – Focus on US NFP tonight

General trend

- BTC flash crash/correction in early Asia trading, dropping to ~91K in a matter of minutes after hitting a new high of $104K last night. Price recovered to the mid-point of the 24-hour range in subsequent hours.

- Overall, Asian equities were soft in AU, JP, KR ahead of US Nov Non-Farm Payrolls tonight. The now largely decoupled Hang Seng and Shanghai indices outperformed.

- Just as the dust appeared to be settling, South Korea’s main opposition party warned of a potential second martial law declaration. KRW won immediately tested multi-year lows and the Kospi fell -1.8%, However, prices substantially pared majority of losses after the KR Joint Chiefs of Staff as well as the Commander of Special Forces (followed by several other senior military officials) said that there would be no second imposition of martial law. Later reporting speculated that Pres Yoon could face the death penalty. Pres Yoon impeachment vote is scheduled for tomorrow (Saturday). [Impeaching Yoon would require support from two-thirds of the National Assembly, or 200 of its 300 members. The opposition parties who jointly brought the impeachment motion have 192 seats combined].

- Japan labor cash earnings continued their fastest pace of increases for 2024 since 1992, ahead of the Dec 19th BOJ rate decision. Financial press speculated that BOJ aims to hike rates by around Mar 2025, but may want to leave itself a ‘free hand’ on the exact timing.

- After falling to 7.31 earlier in the week, China PBOC today again set the Yuan >600 pips stronger than estimates, helping to keep the offshore Yuan bid at 7.26 against USD. China 10-yr yields continued their fall to a fresh record low of 1.9570.

- US equity FUTs slightly down during the Asia session.

Looking ahead (Asian time zone)

- Fri Dec 6th (Fri eve EU Q3 GDP, Fri night US Nov NFP, US Dec Michigan Consumer Sentiment).

- Sat Dec 7th CN Trade Balance.

Holidays in Asia this week

- Thu Dec 5th Thailand.

Headlines/economic data

Australia/New Zealand

- ASX opens -0.2% at 8,462.

- Australia sells A$800M vs. A$800M indicated in 3.75% Apr 2037 bonds; Avg Yield: 4.3459% v 3.9566% prior; bid-to-cover: 3.22x v 2.54x prior.

China/Hong Kong

- Hang Seng opens +0.3% at 19,611; Shanghai Composite opens +0.1% at 3,370.

- US said to have exempted certain China chip firms from trade curbs "in a concession to Japan" - Hong Kong press.

- Follow Up: China plans new rules on stock buyback loans - China Securities Times.

- China Securities Times: Domestic investment to improve in 2025.

- Pres-elect Trump names David Perdue as US Ambassador to China - statement.

- China Foreign Ministry: To impose sanctions on 13 US military firms, including Teledyne Brown Engineering, Brinc Drones and Shield AI, and executives from today [**Note: China has already sanctioned and fined many US firms for Taiwan arms sales several times earlier] [overnight update].

- (HK) Fitch: Hong Kong banks 'cautious' over lending to mainland China.

- China MOF sells 30-year Bonds; Avg Yield: 2.1721%.

- China PBOC sets Yuan reference rate: 7.1848 v 7.1879 prior.

- China PBOC Open Market Operation (OMO): Injects CNY191B in 7-day reverse repos; Net drains CNY288B v net drains CNY153B prior.

Japan

- Nikkei 225 opens -0.1% at 39,371.

- Japan Oct labor cash earnings Y/Y: 2.6% V 2.6%E (continuing fastest pace of increases since 1992).

- Japan Oct Preliminary Leading Index CI: 108.6 v 108.8e; Coincident Index: 116.5 v 117.7e.

- BOJ has eyes set on hiking rates by around Mar 2025, but likely wants to leave itself a ‘free hand’ on the exact timing; cites sources ‘familiar’ with the thinking of the central bank – financial press.

- Japan Nov Total Reserve Assets: $1.24T v $1.24T prior.

- Japan Foreign Min Iwaya: Japan ‘getting information’ to deal with Trump trade policy; plans to pick up trade talks with the US from 5 years ago with the understanding that the elimination of tariffs on auto and auto parts will be negotiated – commented in parliament.

- Japan Econ Min Muto: No known impact to Japanese firms from the recent 'turmoil' in South Korea - financial press.

- Japan considering tax increase on heated tobacco products – Sankei.

Korea

- Kospi opens +0.4% at 2,451.

- South Korea Oct Current Account: $9.8B v $10.9B prior (prior revised lower).

- Bank of Korea (BOK) Gov Rhee: Trump tariffs a bigger concern than martial law crisis - FT.

- South Korea PPP [ruling party] Chief Han to meet with Pres Yoon [time uncertain] - Korean press.

- Follow Up: South Korea Warfare Commander [Special Forces Commander]: To ‘refuse’ should another martial law come – South Korea press.

- South Korea joint chiefs of staff: No need to worry about 2nd martial law.

- South Korea FX Authorities suspected of selling US dollars to support the Korean Won (KRW).

- South Korea PPP [ruling party] Ahn: Would favor Yoon impeachment if no resignation.

- South Korea FSS (financial regulator): Liquidity is being managed stably - financial press.

- South Korea main opposition party says 'Lawmakers on high alert after reports of another martial law declaration" - financial press.

- South Korea Govt: To keep 'executing tasks' related to WGBI inclusion - financial press.

- South Korea main opposition may seek to hold impeachment 'vote earlier' on Saturday at 5 pm (local time) - South Korea press.

- Follow up: South Korea ruling party leader Han Dong-hoon: Pres Yoon needs to be suspended from his office as soon as possible - financial press.

- South Korea Finance Ministry FX Director: Considering measures to boost overnight KRW (won) liquidity [overnight update].

Other Asia

- India Central Bank (RBI) leaves repurchase rate unchanged at 6.50%; as expected; Cuts Cash Reserve Ratio (CRR) by 50bps to 4.00% (not expected) **Note 1st cut since Mar 2020).

- India Central Bank (RBI): Announces increase in the interest rate ceiling on certain FCNR deposits.

- Vietnam Nov CPI Y/Y: 2.8% v 3.0%e.

- Vietnam Nov Industrial Production Y/Y: 8.9% v 7.0% prior.

- Vietnam Nov Retail Sales Y/Y: 8.8% v 7.1% prior.

- Vietnam Nov Trade Balance: $1.1B v $1.3Be.

- Taiwan Nov CPI Y/Y: 2.1% v 1.9%e [overnight update].

North America

- NBA (US National Basketball Assn) reported to return to China in 2025 - financial press.

- (US) Pres-elect Trump names David Sacks to be "White House AI and Crypto Czar" - statement.

- Argentina Central Bank (BCRA) cuts Benchmark Interest Rate by 300bps to 32.00% (8th cut since Dec 2023).

- (US) Nov Challenger Job Cuts: 57.7K v 55.6K prior; Y/Y: 26.8% v 50.9% prior.

- (US) US Transportation Dept reportedly considering requiring airlines to pay stranded passengers at least $200 and as much as $775 in cash, when a flight disruption is caused by the carrier - press.

- (US) Oct trade balance: -$73.8B V -$75.0BE.

- (US) Initial jobless claims: 224K V 215KE; continuing claims: 1.871M V 1.90ME.

- (US) Weekly EIA Natural Gas inventories: -30 BCF VS. -48 BCF TO -43 BCF indicated range.

Europe

- (UR) Russia Foreign Min Lavrov: West must understand that Russia is ready to use anything to stop notions of inflicting a 'strategic defeat' on Moscow - Tucker Carlson interview.

- (FR) Reportedly François Bayrou, potential successor to PM Barnier and key Macron supporter, who currently serving as high commissioner for govt planning, set to meet with French Pres Macron later today - press.

- OPEC+ confirms to delay oil production hike for 3 months until Apr 2025; These voluntary production cuts to be reversed from Apr 2026 to Sept 2026 v earlier deadline of Dec 2025; Collective group cut of 2Mbpd has been extended till the end-2026 - financial press citing sources [**Note: earlier, Energy Intel's Bakr said OPEC+ might look to extend the timeline of the planned unwinding which means that the unwinding would end in 2026].

- (FR) Reportedly French Pres Macron looking to join forces with the socialist party, a strategy that would split a large left-wing coalition in the national assembly and potentially return enough power to Macron's centrists to be able to break the country’s political gridlock - Press.

- (FR) French far-right leader Le Pen: We can pass a budget for 2025 in next few weeks; New French PM likely to be named tonight; Narrowing deficit to 3% by 2029 isn't credible; There's no case for Macron to quit under current conditions [**Note: Pres Macron to do nation address later on Thurs, 14:00ET (19:00 GMT)].

- (FR) French PM Barnier officially resigns; French Pres Macron asked him to remain in office until a new PM is nominated.

- (FR) France Pres Macron: Lawmakers who ousted govt only thinking about the prospect of a new presidential election; I will carry out my full mandate as President; Will name a new PM within coming days.

Levels as of 00:20 ET

- Nikkei 225 -0.8%, ASX 200 -0.6%, Hang Seng +1.3%; Shanghai Composite +1.0%; Kospi -0.5%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.1%; Dax -0.1%; FTSE100 -0.2%.

- EUR 1.0566-1.0589; JPY 149.77-150.28; AUD 0.6420-0.6456; NZD 0.5855-0.5889.

- Gold +0.6% at $2,664/oz; Crude Oil flat at $68.33/brl; Copper +0.6% at $4.2237/lb.