Headlines/Economic Data
General Trend:
US dollar (USD) weakens broadly in early Asia, later pares losses
Aussie rises amid better than expected home loans data, Westpac Consumer Confidence hits 4-year high; later pares gain
Australia 10-year yield rises amid syndicate pricing
China continues to play down need for rate hike: PBoC Adviser said not necessary for China to raise benchmark interest rates in near term
China Q4 GDP and Australia monthly employment data due for release on Thursday
China sells 5-year bonds at lower than expected yield
(CN) PBOC reminds that RRR cut announced for some banks in Sept, to go into effect Jan 25th
Japan Nov Core Machine Orders has highest value since June 2008
BoJ again leaves bond purchases unchanged at daily operation
Bitcoin continues its weakness as Asia regulators continue to indicate they will crack down on cryptocurrency
Coinbase: Notes buys and sells are temporarily unavailable
Bithumb: Delayed cash withdrawals for some clients
Japan
Nikkei 225 opened -0.7%; closed -0.4%
TOPIX Iron & Steel Index -1.2%: Nippon Steel -1.5% (Fire reported at Nippon Steel’s Naoetsu production facility – Japanese press)
General weakness in the Japanese mega banks: Sumitomo Mitsui -1%, Mizuho -1%, Mitsubishi UFJ -1% (tracks declines in S&P500 Financials sector)
Fast Retailing -1.3% (gained 2.8% prior session)
Softbank -1.2% (gained 2.0% prior session)
(JP) Japan Nov Core Machine Orders M/M: 5.7% v -1.4%e; Y/Y: +4.1% v -1.0%e
Toyota and Honda suspend exports to Vietnam since the beginning of the year following the implementation of a rule that requires stringent checks on imported vehicles – Nikkei
Looking Ahead: Japan Nov Industrial Production due for release on Thursday
Korea
Kospi opened -0.2%
Weakness in chip sector: Samsung Electronics -0.3%, Hynix -0.3%
Chemicals firms trade lower: LG Chemicals -2%, Lotte Chemical -2%
Celltrion [068270.KR]: -3.5% (cautious broker commentary)
Doosan Heavy [034020.KR] -4% (Doosan Group denied press report related to sale of Doosan Heavy)
Samsung SDS [0.18260.KR] +4.5% (positive broker commentary)
(KR) South Korea Deputy PM and Fin Min Kim: suggestion to close down cryptocurrency exchanges is still an option under consideration, despite anticipated side effects – Korean press
(KR) US Secretary of State Tillerson: North Korean intercontinental ballistic missile launch in November was witnessed by passengers on a San Francisco-to-Hong Kong commercial flight
(KR) Bank of Korea sells KRW2.43T in 2-year monetary stabilization bonds (MSB): yield 2.15%
(KR) South Korea Fin Min Kim: Will leave FX rates to market but take action if necessary
Looking Ahead: Bank of Korea interest rate decision due for Thursday (expected to leave rates unchanged at 1.50%)
China/Hong Kong
Hang Seng opened -0.3%, Shanghai Composite +0.1%
China property names decline after report that China would continue with property curbs; Hang Seng Property/Construction Index -1.0%
Property company Country Garden [2007.HK] -4%: Planning to raise HK$23.4B by selling shares and convertible bonds
Hang Seng Materials Index -1.8% (+1.6% prior session), Energy -1.9% (+1.1% prior session)
HNA Group unit Bohai Capital halted ahead of ‘expected major issue’
General weakness among airlines: China State-owned Assets Supervision and Administration Commission (SASAC) said it will allow less than 50% state holding in top 3 state airlines
(CN) China researcher: No need for PBOC to hike interest rates – press
(CN) China PBoC OMO: Injects CNY200B in 7,14 and 63-day reverse repos v CNY320B prior: Net injects CNY100B v CNY270B drained prior
USD/CNY (CN) PBoC sets yuan reference rate at 6.4335 v 6.4372 prior (strongest fix since Dec 10, 2015)
(CN) China MoF sells 5-yr bonds: avg yield 3.81% v 3.84%e, bid to cover 3.39x
(HK) Hong Kong Chief Lam: Take ‘great exception’ to report compiled by British peer Paddy Ashdown that casts doubts on rule of law and China’s influence over city
Looking Ahead: China Q4 GDP and Dec data (Fixed Asset Investment, Industrial Production, Retail Sales) due for release on Thursday
Australia/New Zealand
ASX 200 opened -0.2%; closed -0.5%
ASX 200 Resources Index -1.4%,Telecom -1%, Financials -0.3%
(AU) Australia Jan Westpac Consumer Confidence Index: 105.1 v 103.3 prior; m/m: 1.8% v 3.6% prior (4-yr high)
(NZ) New Zealand Dec ANZ Commodity Price: -2.2% v -0.9% prior
(AU) Australia to sell A$9.6B in new 2029 bonds, priced at yield to maturity of 2.86%
(NZ) New Zealand mortgage brokers see uptick in interest after lending curbs lifted – NZ press
(AU) According to analysts the RBA cash rate is poised to fall below the Fed funds rate for the first time in over 15 years, will see a sharp fall in the the A$ as a result – AFR
(AU) AUSTRALIA NOV HOME LOANS M/M: 2.1% V 0.0%E; INVESTMENT LENDING: 1.5% V 1.8% PRIOR; Owner Occupied Loan Value m/m: 2.7% v -0.5% prior
Looking Ahead: Australia Dec Employment data due for release on Thursday
Other Asia
(IN) India Economic Affairs Sec Garg: Requirement of additional borrowing reduced to INR200B vs INR500B originally seen
(IN) India 10-year bond yield near 7.43%, down over 12bps
(SG) Singapore Dec Non-Oil Domestic Exports M/M: -5.0% v -4.4%e; Y/Y: +3.1% v 8.6%e; Electronic Exports Y/Y: -5.3% v 5.1% prior
(PH) Philippines Central Bank Gov Espenilla: Sees no Philippine Peso freefall given fundamentals
Nanya Technology [2408.TW] -4.7%: Sees Q1 DRAM prices rising ‘mildly’ – local press
North America
US equity markets reversed gains and ended mostly lower: Dow flat, S&P500 -0.4%, Nasdaq -0.5%, Russell 2000 -1.2%
S&P500 Energy Sector -1.3%, Materials -1.2%
(US) Pres Trump tweets: "The Democrats want to shut down the Government over Amnesty for all and Border Security."
(US) US House Republicans discuss stop-gap government funding bill through Feb 16th (in line with prior press speculation)
(US) Republican Representative Simpson: Stop-gap funding bill expected to include 6-year Childrens Health Insurance Program (CHIP) reauthorization; will not include ‘Dreamer’ immigration legislation
(US) Republicans said to discuss attaching 2-year delay of medical device and ‘cadillac’ health plan taxes related to Obamacare – financial press
(US) Former White House adviser Steve Bannon has reportedly been subpoenaed by Special Counsel Mueller in Russia investigation – NYT
Ford [F] -3% in afterhours: Reports prelim FY17 $1.78 v $1.81e, Guides initial FY18 adj EPS $1.45-1.70 v $1.53e; announces supplemental cash dividend ahead of DB conf
PayPal [PYPL] -2% in afterhours: Guides initial FY18 Rev $15.0-15.25B v $15.4Be; Affirms Op profit growth ~20%
Looking Ahead: US Dec Industrial Production and Nov TIC data due for release, along with Bank of Canada rate decision, Weekly API Crude Oil Inventories
Earnings expected from companies including ASML, Alcoa, Bank of America, Goldman Sachs
Europe
(EU) ECB Weidmann (Germany): would be appropriate to end ECB’s asset purchases this year – press interview; Analyst expectation for a mid-2019 rate hike is about in line with ECB guidance
(FR) ECB’s Villeroy (France): Must monitor Euro movements on prices; recent rise is a source of uncertainty – press interview
(EU) Eurogroup Chief Centeno: signals we’re getting from Germany are very encouraging; it makes sense for a monetary union to have a budget capacity that plays a role of supporting investment
EUR/USD: During early Asia session, traded above highs seen in Dec 2014 amid broad US dollar weakness
Nestle: Confirms agreement to sell US confectionery business to Ferrero for $2.8B
Informa [INF.UK]: Boards of UBM and Informa confirm that they are in talks on potential combination of the two companies
Levels as of 01:00ET
Nikkei225 -0.4%, Hang Seng -0.3%; Shanghai Composite +0.5%; ASX200 -0.5%, Kospi -0.5%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 +0.2%
EUR 1.2323-1.2238; JPY 110.91-110.19; AUD 0.7999-0.7948;NZD 0.7291-0.7237
Feb Gold -0.1% at $1,335/oz; Feb Crude Oil -0.1% at $63.64/brl; Mar Copper -0.6% at $3.20/lb
