Australia/New Zealand
ASX 200 opened +0.3%: closed +0.7%
ASX Resources Index +0.9%, Financials +0.8%; REITs -0.6%
Aussie declines after weaker than expected Nov trade data; Australia Nov Trade Balance (A$) -628M v +550Me (2nd straight deficit); Prior trade revised lower from +105M to 302M (first deficit since Oct 2016)
China/Hong Kong
Hang Seng opened +0.5%, Shanghai Composite flat
Chinese beer companies trade sharply higher: Brewers in China reportedly boost prices by 10-20%, said a local press report
HSCI Property/Construction Index +2.5%, Energy +0.6%; Consumer Goods -0.6%, Financials -0.2%
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.4915 V 6.5043 PRIOR (strongest CNY fix since May 2016)
(CN) China PBoC: Skips OMO for 10th straight session: Net drain: Nil v CNY130B prior
(CN) China issues rules for equity investment by insurance funds: to ban insurers from guaranteed return of equity on investments; China’s insurance regulator, CIRC, says the rules are aimed at curbing ‘implicit’ local government debt.
(CN) China to collect personal debt information related to online finance – Chinese Press; Says the purpose of the credit information platform is to help deal with systemic risks
(CN) There is renewed press speculation that China may maintain GDP growth target at around 6.5% for 2018 – financial press
(CN) Yuan unlikely to see sharp rises or falls in 2018; likely to be mostly stable – Chinese press: **Note: The report is in line with some of the recent comments by Chinese officials.
Japan
Nikkei 225 opened +0.6% after gaining 3.3% in prior session in catch-up rally: closed: +0.9%
TOPIX Iron & Steel Index +1.5%, Securities +0.7% (gained 4.9% prior session), Electric Appliances +0.7%
Toshiba +3%: Brookfield Business Partners announces deal to acquire Westinghouse for $4.6B
Continued strength in the auto sector, following Thursday’s gains: Toyota +1.8%, Nissan +1.4%
Financials track the strength seen in the NY session: Sumitomo Mitsui +1.4%, Mitsubishi UFJ +1.4%
Softbank -1.1%
Fast Retailing +0.9%: To report Dec SSS after the close
(JP) Japan Finance Min Aso: Reiterates needs to raise sales tax for fiscal consolidation, but if economy is not good tax hike can’t proceed; To craft new primary balance goal around next year.
(JP) Japan Dec Nikkei PMI Services 51.1 v 51.2 prior; Composite: 52.2 v 52.2 prior
(JP) Japan Dec Monetary Base: ¥480.0T v ¥471.5T prior; Y/Y: 11.2% v 13.2% prior
Korea
Kospi opened +0.4%
Chipmakers trade higher: Samsung Electronics +1%, Hynix +2.5%
Financials also generally higher: Industrial Bank of Korea +1.7%, KB Financial +1%. Hana Financials +0.9%
Korean Won (KRW) trades near 3-year high amid equity flows
(KR) Follow Up: South Korea Unification Ministry: North Korea said it accepts offer for talks on Jan 9th; talks to include Winter Olympics and ‘other issues of mutual interest’; Expects additional hotline talks with North Korea over the weekend.
(KR) White House spokesperson: confirms Pres Trump and South Korean Pres Moon agreed to continue campaign of maximum pressure against North Korea; Agreed to de-conflict the Olympics and our military exercises to ensure Games’ security
(KR) China said to send an envoy (to discuss North Korea) to South Korea between Jan 5th- 6th – press
(KR) North Korea said to be ‘likely’ preparing for new rocket engine test (no timeframe given) – US financial press
(KR) South Korea Nov Current Account Balance: $7.4B v $5.7B prior; Balance of Goods (BOP): $11.5B v $8.6B prior
Other Asia
USD/MYR: Trades at the lowest level since Aug 2016: Malaysia Ringgit (MYR) +0.3%
(MY) Malaysia Nov Trade Balance (MYR) 9.95B v 10.9Be; Exports to China +3.3%, US+13.4%
USD/INR: Indian Rupee (INR) trades at highest level since July 2015.
(PH) PHILIPPINES DEC M/M: 0.3% V 0.3%E; Y/Y: 3.3% V 3.3%E; CORE Y/Y: 3.0% V 3.1%E**Note: Central Bank has 2.0-4.0% target range for inflation
North America
US equity markets ended broadly higher: Dow +0.6%, S&P500 +0.4%, Nasdaq +0.2%, Russell 2000 +0.2%
S&P500 Financial Sector +1%, Materials +0.8%
Apple: Said all Mac systems and IOS devices are affected by chip security issue, but no known exploits are currently impacting customers; recently uncovered security issues known by the names of ‘Meltdown’ and ‘Spectre’
(US) Fed’s Bullard (non-voter, Dove): inflation targeting has been major achievement for the Fed; price level targeting is worth consideration
(US) DOE CRUDE: -7.4M V -4.5ME
Looking ahead: US Dec Nonfarm payrolls due for release, along with US Dec ISM Non-Manufacturing PMI and Canada Dec Employment Change
Europe
(UK) UK 2017 New Car Sales down ~5.6% to 2.54M units (largest decline since 2009); Sees 2018 new car sales down 5-7% – SMMT
(UK) UK Dec BRC Shop Price Index Y/Y: -0.6% v -0.1%
Looking Ahead: Euro Zone Dec prelim CPI to be released (German Dec prelim CPI was released on Dec 29th)
(IR) United Nations (UN) Security Council reportedly to hold meeting on Friday at 15:00ET concerning situation in Iran – press
Levels as of 01:00ET
Hang Seng flat; Shanghai Composite +0.3%; Kospi +1%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 -0.1%%
EUR 1.2065-1.2080; JPY 112.72-112.97; AUD 0.7843-0.7870 ;NZD 0.7146-0.7165
Feb Gold +0.1% at $1,322/oz; Feb Crude Oil flat at $62.02/brl; Mar Copper +0.4% at $3.272/lb
