Equity Markets Opened Mixed After Friday’s Drop In US Markets, Equity Futures Rise

Jan 13 20, 07:33 GMT

General Trend:

China Vice Premier Liu He is due to visit the US between Jan 13-15th (Mon-Wed) for the signing of the Phase 1 trade deal; Offshore yuan (CNH) rises amid stronger yuan fixing and focus on trade deal signing date
US/China said to resume Comprehensive Economic Dialogue (CED), these talks were suspended at the beginning of the Trump administration
Financial and Property shares rise in HK
Automakers rise in Hong Kong, BYD Co up over 8%; China said new energy vehicle subsidies will not be cut significantly in 2020
West China Cement rises over 3% in HK on guidance, noted increase in cement prices
COFCO Meat drops over 4% in HK; FY hog production -22.2% y/y, fresh pork sales -23.3% y/y
Shanghai Composite rises as yuan gains, IT sector outperforms amid focus on phase 1 trade deal signing
Shanghai-listed banks underperform in early trading, Bank of Shanghai drops after responding to allegations about illegal lending
Equity markets decline in Australia amid losses in the Energy and Resources sectors Japan markets are closed for holiday
Australian lithium-related names trade generally higher on China auto subsidy news
Aussie adds to Friday’s gain as yuan strengthens ahead of US/China trade signing date
Indonesia Rupiah (IDR) extends gain, recent central bank comments on currency in focus
South Korean exports rise in early Jan on chip shipments
Local governments in China release 2019 GDP figures, 2020 economic targets; China Q4 GDP data due on Friday (Jan 17th)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.3%
(AU) Australia Federal Resources Min Canavan: Govt is considering a number of options in response to a number of issues that arose following Northern Oil & Gas Australia falling into voluntary administration and leaving an uncovered and estimated A$120M repair and remediation bill – AFR
(AU) Australia Dec Melbourne Institute Inflation m/m: 0.3% v 0.0% prior; y/y: 1.4% v 1.5% prior
(AU) S&P: Australia fires pose no immediate risk to rating; there is capacity within current ratings on sovereign (current and state governments to absorb fiscal costs

Japan

Nikkei 225 closed for holiday
7267.JP May halt sales of small vehicles in the US market as soon as 2021 – Nikkei
7201.JP Executives said to be behind the scenes accelerating a secret contingency plan to split from Renault – FT

Korea

Kospi opened -0.1%
(KR) South Korea Jan 1-10th Exports y/y: +5.3% v 7.7% prior; Chip Exports y/y: +11.5% v -23.4% prior (1st increase since oct 2018)
(KR) North Korea paper Rodong Sinmun calls for growing manufacturing and other major industries in a “self-reliant” manner to better fight “murderous” sanctions
(KR) South Korea chief negotiator Jeong Eun-bo: South Korea and the United States have made progress “to some extent” in their negotiations on defense cost talks – Yonhap
(KR) According to Yonhap poll Bank of Korea (BOK) is expected to keep rates unchanged at 1.25% this week

China/Hong Kong

Hang Seng opened +0.5%; Shanghai Composite opened 0.0%
(CN) China and US have agreed to resume semiannual talks on trade, reform and disputes (US/China Comprehensive Economic Dialogue or CED); separate from phase 2 trade deal talks
(CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 15th consecutive session; Net drain CNY0B v drain CNY0B prior
USD/CNY (CN) China PBOC sets Yuan Reference Rate: 6.9263 v 6.9351 prior (strongest setting since Aug 5, 2019)
(CN) Another China government think tank said to forecast 6.0% GDP growth for China in 2020 – China Securities Journal
(CN) China said there will be no significant reduction in new energy vehicle subsidies in 2020 – financial press
293.HK Said to be looking at offering unpaid leave to some staff as protests continue to take their toll – SCMP

Other Asia

North America

(US) Treasury Sec Mnuchin: China’s commitments in the Phase 1 trade deal with the United States were not changed during a lengthy translation process and will be released this week after being signed
(IR) US Pres Trump: National Security Adviser suggested today that sanctions & protests have Iran “choked off”, will force them to negotiate. Actually, I couldn’t care less if they negotiate. Will be totally up to them but, no nuclear weapons and “don’t kill your protesters.” – tweet

Europe

HSBA.UK Due to political uncertainty has delayed plans to form £1.0B fund with China Investment Corporation (CIC) that would invest in UK companies that was to grow in China – UK press
(FR) France said to have provisionally pulled proposed retirement age that has been at the core of protesting; PM sent letter to unions looking to seek compromise – press
(UK) Bank of England (BOE) member Vlieghe: Will vote for a rate cut this month if there are no signs the economy is improving after general election – FT
(DE) Germany Bundesbank Official Balz: Pace of economic expansion in EU expected to stabilize in 2020; reiterates sees 2020 EU GDP at 1.1% – speaking from Hong Kong at the Asian Financial Forum

Levels as of 12:15ET

Hang Seng +1.0%; Shanghai Composite +0.3%; Kospi +0.8%; Nikkei225 closed; ASX 200 -0.4%
Equity Futures: S&P500 +0.3%; Nasdaq100 +0.4%, Dax +0.3%; FTSE100 +0.3%
EUR 1.1131-1.1113; JPY 109.64-109.50; AUD 0.6920-0.6895; NZD 0.6653-0.6630
Commodity Futures: Gold -0.2% at $1,556/oz; Crude Oil 0.0% at $59.05/brl; Copper +0.5% at $2.83/lb