General Trend:
- China officials held briefing on viral outbreak; Noted 440 cases of the virus in China (including 9 deaths in the Hubei province), commented on how officials are addressing the issue; Noted the new virus is ‘adapting and mutating’
- World Health Organization (WHO) is expected to discuss the China virus later today, expected to assess whether the viral outbreak is an international emergency (briefing expected at 13:00 ET)
- Shanghai Composite underperforms in Asia, market pared declines as China held briefing on virus
- Declining sectors in China include financials, industrials and consumer discretionary
- Pudong Bank declines over 2% in Shanghai, guided FY Net +5.4% y/y
- Hang Seng rises in early trading after underperforming during prior session; Gainers include Technology, Energy and Financial firms
- Hong Kong gaming companies trade mixed after recent losses, Macau confirmed first case of the new coronavirus
- Gainers in Japan include Electric/Appliance, Insurance and Securities firms, declining sectors include Iron/Steel and Marine/Transportation
- Mitsubishi Motors drops over 3.5%, German police said to have conducted searches of the company’s sites in connection with probe of diesel emissions defeat devices (press)
- Hyundai Motor rises on better than expected Q4 results
- Consumer Staples and Financials are among the gainers in Australia
- Australian companies continue to comment on impact of bushfires; Australian Pharma said bushfires have impacted certain sales
- Australia Jan Consumer Confidence somewhat impacted by bushfires (Westpac)
- Aussie bond yields decline amid recent drop in US and Chinese gov’t bond yields; Australia Dec jobs data due on Thursday
- According to futures markets, probability of Feb 2020 RBA rate cut is about 48% ahead of upcoming jobs data
- Australia sold A$3.5B in new May 2032 bonds, bid to cover 3.3x
- China PBOC has yet to announce a targeted MLF operation ahead of the Lunar New Year holiday
- South Korea Q4 prelim GDP beat ests amid government spending on infrastructure
- CapitaLand Commercial Trust to be acquired by CapitaLand Mall Trust, merged entity will have a market cap of S$16.8B (3rd largest REIT in Asia Pacific)
- Malaysia Central Bank expected to leave rates unchanged later today
- Companies expected to report earnings during the US morning include JNJ
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- STO.AU Reports Q4 production 18.7 MMBOE v 15.9 y/y, -5.6% q/q; Rev A$1.03B v A$1.04B y/y
- (AU) Australia Dec Skilled Vacancies m/m: +0.6% v -1.3% prior
- (AU) Australia sells A$3.5B v A$3.5B indicated in 1.25% May 2032 bonds (new bond), avg yield 1.2394%, bid to cover 3.29x
Japan
- Nikkei 225 opened -0.1%
- (JP) Japan Chief Cabinet Sec Suga: Not true Japan is considering limited foreign buying of land
- HMC To recall 2.4M vehicles in the US market over new Takata defects – press
- 7203.JP Recalls 2.0M vehicles in the US for airbag deployment issues
Korea
- Kospi opened -0.1%
- (KR) North Korea diplomat: missile test moratorium with the US is now over due to “brutal and inhumane” sanctions led by the US – South Korean press
- (KR) SOUTH KOREA Q4 PRELIMINARY GDP Q/Q: 1.2% V 0.7%E; Y/Y: 2.2% V 1.9%E
- (KR) Bank of Korea (BOK) sells KRW2.3T v KRW2.3T indicated in 2-year Monetary Stabilization Bonds (MSB); avg yield 1.42% v 1.325% prior
- (KR) South Korea Vice Fin Min Kim: Market volatility has risen somewhat due to China coronavirus
- 005380.KR Reports Q4 (KRW) Net +851.2B v -203.3B y/y; Op 1.24T v 501B y/y; Rev 27.9T v 25.7T y/y
China/Hong Kong
- Hang Seng opened +0.5%; Shanghai Composite opened -0.5%
- (CN) China Disease Control Center Chief Gao: New coronavirus is adapting and mutating
- (CN) China Health Commission Briefing on Wuhan Coronavirus: Currently 440 cases across 13 provinces; 9 deaths all in Hubei province (Wuhan is capital of Hubei); 2,197 cases of close contact with confirmed cases detected; will hold daily briefing even through the holiday with counts
- (CN) China may soon roll out revised QFII rules – China Press
- (HK) Macau Govt confirms first case of coronavirus
- (CN) China National Development and Reform Commission (NDRC) deputy chief Ning Jizhe: there is no timetable for ‘Phase 2’ US-China trade talks – press
- (CN) China PBoC Open Market Operation (OMO): Injects CNY30B via 14-day reverse repos v injects CNY100B in 14-day prior; Net injection CNY30B v injects CNY100B prior
- (CN) China PBOC sets Yuan Reference Rate: 6.8853 v 6.8606 prior
- (CN) China to continue selling pork reserves following the upcoming Spring Festival – US financial press
North America
- (IR) Pentagon confirms it is transporting more troops out of Iraq than previously disclosed for medical treatment and evaluations following Iran missile attack – Wash Post
- GE Granted license from US Treasury Dept to help investigation of Ukraine downed airliner in Iran
- NFLX Reports Q4 $1.30 v $0.52e, Rev $5.47B v $5.44Be
Levels as of 12:15ET
- Hang Seng +1.0%; Shanghai Composite -0.1%; Kospi +0.8%; Nikkei225 +0.6%; ASX 200 +0.9%
- Equity Futures: S&P500 +0.5%; Nasdaq100 +0.7%, Dax +0.7%; FTSE100 +0.4%
- EUR 1.1087-1.1077; JPY 110.09-109.83; AUD 0.6848-0.6827; NZD 0.6599-0.6582
- Commodity Futures: Gold -0.4% at $1,552/oz; Crude Oil -0.4% at $58.13/brl; Copper +0.3% at $2.79/lb
