Asia Market Update: Indices trade generally lower with some markets closed for holiday; China Manufacturing PMI in line with ests, non-manufacturing PMI misses ests; Aussie trades at 5-month high as bond yields rise.
General Trend:
- Australian equities underperformed, decliners included consumer companies, financials and telecoms
- Telstra said some of its services have been impacted by the bushfires in Australia
- Aussie travel-related firms decline as bushfires impact tourism-related areas in Australia, Qantas drops over 2.5%; Insurers IAG and Suncorp decline by more than 1.5%
- Shanghai Composite declines in early trading after gains seen on Monday’s session; Brokers trade generally lower after yesterday’s gains
- Banks remain weaker in Shanghai following recent announcement by the PBOC regarding plan to revise the pricing benchmark for floating-rate loans
- Brokerage firms trade generally lower in China and Hong Kong, these companies rose on Monday after China approved revisions to its securities law
- Hang Seng ended lower by 0.5% in shortened session after gains on Monday
- Property firms ended mixed in Hong Kong; HK Development Sec is expected to address the government’s Jan-March land sale program at 6:30 GMT
- ZTE rises over 2% in Hong Kong; Huawei reports 2019 Revs +18% y/y, smartphone shipments +16.5% y/y (press)
- Technology firm Meitu rises 10% in Hong Kong on guidance
- Baht (THB) pares gain after comments from Thailand Central Bank
- China President Xi to deliver New Year speech on Tuesday (Dec 31st) at 7 pm local time (11 GMT)
- Major Asian markets will be closed on Wed (Jan 1st)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.3%
- (AU) Bush fires in Australia have gotten so large they are creating pyrocumulonimbus thunderstorms, which can create more fires – AFR
- RIO.AU Operations resumed at Richards Bay Minerals; Adjusts FY19 Titanium Dioxide slag production ‘bottom end of 1.2-1.4Mt’ (prior 1.2-1.4Mt)
- (AU) Australia government bond yields rise in final trading session of 2019: 3-year yield +4bps, 10-year yield +7bps; AUD/USD rises above $0.70, China official Dec PMI data due at 1 GMT
- GNC.AU Completes sale of Australia bulk liquid terminals business, sees pretax profit of ~A$93M from the transaction
Japan
- Nikkei 225 closed until after new year
- 7201.JP Former Chairman Ghosn said to have fled Japan for Lebanon in order to avoid trial in Japan – press
Korea
– Kospi closed until after new year
- (KR) SOUTH KOREA DEC CPI M/M: 0.2% V 0.1%E; Y/Y: 0.7% V 0.6%E; 2019 avg CPI y/y: 0.4% v 1.5% prior (weakest level since 1966)
- (KR) Bank of Korea (BOK) Gov Lee: monetary policy needs to stay accommodative – New Years speech
- (KR) South Korea Jan Business Manufacturing Survey: 73 v 71 prior (highest level since July 2019); Non-Manufacturing Survey: 75 v 74 prior (highest level since Sept 2018)
- (KR) North Korea leader Kim calls for diplomatic and military countermeasures for preserving sovereignty – speaking from Workers Party
- (KR) South Korea Finance Ministry will continue to make efforts to reduce its reliance on imports of materials, components and equipment from Japan in 2020
China/Hong Kong
- Hang Seng opened -0.3%; Shanghai Composite opened -0.1%
- (CN) CHINA DEC MANUFACTURING PMI: 50.2 V 50.1E; Non-Manufacturing: PMI: 53.5 v 54.2e; Composite: 53.4 v 53.7 prior
- HUAWEI.CN Reports 2019 Rev $122B, +18% y/y; Smartphone shipments 240M v 206M y/y – FT
- (CN) China Ministry sees 2019 Foreign Direct Investment (FDI) in yuan terms ~ +5% y/y – China Daily
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 6th consecutive session; Net drain CNY0B v drain CNY0B prior
- (CN) China PBOC sets Yuan Reference Rate: 6.9762 v 6.9805 prior (strongest fix since early August)
- (CN) China Budget Performance Committee deputy chairman Zhang Yiqun: There remains some room for further tax and fee cuts in 2020; the overall space for tax cuts is not large as the overall corporate burden has already been significantly reduced – Securities Times
- (CN) China National Business Work Conference to focus on promoting stable consumption growth in 2020; 2019 consumption see +8% y/y and drive more than 60% of economic output – Xinhua
- (CN) China Vice Premier Liu He said to lead trade delegation to US on Saturday, Jan 4th, when he is expected to sign phase 1 trade deal – SCMP
- North America
- (CN) White House trade adviser Navarro: likely to have ‘Phase 1’ China trade deal signing within the next week or so; still waiting on translation – Fox News interview
- Europe
- (RU) Concern that Russia will gain sovereignty of Belarus which would exploit hole that will allow Putin to remain in power, past the 2024 deadline he is currently under
Levels as of 12:15ET
- Hang Seng -0.5%; Shanghai Composite -0.2%; Kospi closed; Nikkei225 closed; ASX 200 -1.8%
- Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax -1.5%; FTSE100 -0.1%
- EUR 1.1219-1.1198; JPY 108.89-108.61; AUD 0.7008-0.6993; NZD 0.6738-0.6714
- Commodity Futures: Gold +0.5% at $1,526/oz; Crude Oil -0.1% at $61.62/brl; Copper -0.0% at $2.82/lb
