Equities Trade Generally Lower, CN/HK Banks Outperform Amid MLF And Earnings

Jan 15 21, 06:48 GMT

General Trend

Decliners in Japan include Iron/Steel, Auto and Marine Transportation firms; Fast Retailing (largest Nikkei component) drops after earnings/outlook; Canon Inc rises on raised outlook
Shanghai Composite declined during the morning session, despite the gains in financials; Consumer Staples index drops over 3.5%, Kweichow Moutai declines over 4%
Hang Seng Finance index rises, China Merchants Bank rises after prelim results; TECH index declines by over 1%, Xiaomi drops over 10% on US move
Resources firms were among the gainers in Australia, Consumer cos. lagged
Taiwan Semi rises over 3% after results and outlook
BOK commented on equity markets, no specific currency-related remarks seen
Companies expected to report earnings during the NY morning include Citigroup, Flex Ltd, JPMorgan, PNC Financial, Wells Fargo
China Q4 GDP data is due on Monday (Sunday night in the US)
US President-elect Biden has promised to release details on trade plan on Jan 21st (Thursday)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.3%
(AU) Australia Debt Agency (AOFM) Gives 2020-2021 Bond issuance program update: To issue new Treasury bond maturing Nov 2032 via syndication; affirms total issuance in 2020-2021 to be ~A$230B; Bond issuance to be around A$2-3B in most weeks.
(AU) China said to be considering allowing some imports of Australia Coal Cargo; broader ban on coal imports remains in effect
(NZ) Reserve Bank of New Zealand (RBNZ) to offer to buy a total of NZ$650M in government bonds next week under QE program v NZ$800M prior
(NZ) Reserve bank of New Zealand (RBNZ) Gov Orr: Committed to action as it responds to data breach
(NZ) New Zealand Dec Food Prices M/M: +0.1% v -0.9% prior
(NZ) New Zealand Dec REINZ House Sales Y/Y: 36.6% v 29.6% prior

China/Hong Kong

Hang Seng opened -0.4%, Shanghai Composite flat
(US) President Trump Administration said to add China’s Comac, Xiaomi to military blacklist – press
(CN) CHINA PBOC CONDUCTS CNY500B 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) V OPERATION V CNY950B PRIOR: RATE 2.95% V 2.95% PRIOR [RECORD AMOUNT FOR A MLF OPERATION, MLF RATE LEFT UNCHANGED FOR THE 9TH STRAIGHT MONTH]
(CN) China PBOC Open Market Operation (OMO): Injects CNY2B in 7-day reverse repos v CNY2B in 7-day reverse repos prior; Net drain CNY3B v Net drain CNY8B prior
(CN) Analysts in China do not believe a PBOC RRR cut is needed, suggests China could use various tools (including MLF, reverse repo and contingency reserve allowance) to increase liquidity ahead of the Lunar New Year Holiday [in mid-Feb] – Chinese press
(CN) China Daily: Price stability is key priority for PBOC (
Ant Financial: Backers of the IPO do not know when the offering can be revived – FT
SInopharm [1099.HK] Confirms vaccine effective against UK variation
CNOOC [883.HK]: Follow Up: Added to the US Commerce Dept ‘Entity List’, restrictions related to the company will not apply to crude oil
(CN) China PBOC sets Yuan reference rate: 6.4633 v 6.4746 prior
(CN) CHINA DEC NEW HOMES PRICES M/M: 0.1% V 0.1% PRIOR; Y/Y: 3.8% V 4.0% PRIOR
(CN) China Ministry of Finance (MOF) sells 3-month bills and 30-year bonds

Japan

Nikkei 225 opened +0.3%
(JP) Japan PM Suga said to be urged to consider calling a national emergency for the pandemic situation (from Jan 14th)
(JP) Bank of Japan (BOJ) Former Official Maeda : BOJ is likely to pause ETF purchases if stocks ‘soar’ – Financial Press
(JP) Japan MOF Comments: Japan Short term debt had record foreign demand last week

Korea

Kospi opened +0.1%
(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 0.50%; AS EXPECTED; Risk appetite has strengthened in financial markets; Monitoring liquidity inflow into stock market; Monitoring changes in financial stability; difficult to judge if there is a bubble in the Domestic stock market; Watching risk of heightened financial imbalances as inflows into asset markets continue; -Concerned on stock investment based on excessive leverage; Closely monitoring equity market volatility

Other Asia

North America

(US) President Elect Biden: Announces $1.9T coronavirus relief proposal (as expected); Debt situation will be more stable if we seize moment
(US) Fed Chair Powell: Policy will continue to reflect broad considerations, not mathematically tied to any formula for inflation, will use element of judgment; Taper tantrum highlights sensitivity regarding bond buying

Europe

(DE) New planned COVID lockdown measures in Germany reportedly might include closing schools – German press
(IT) Italy cabinet approved request for €32B in extra budget deficit (as expected)
SAP [SAP.DE]: Reports prelim Q4 Rev €7.54B v €8.04B y/y, op margin 35.2% v 26.1% y/y; guides initial FY21 adj cloud Rev €9.1-9.5B, +13-18% y/y (cc)
Valeo [FR.FR]: Reports prelim H2 EBITDA margin >13.5%, FCF >€1.3B; Q4 Rev €5.0B, Original Equipment Sales €4.2B

Levels as of 00:20 ET

Nikkei 225, -0.6%, ASX 200 flat , Hang Seng -0.5%; Shanghai Composite -0.6% ; Kospi -1.9%
Equity S&P500 Futures: -0.6%; Nasdaq100 -0.5%, Dax -0.5%; FTSE100 -0.3%
EUR 1.2164-1.2139 ; JPY 103.85-103.70 ; AUD 0.7790-0.7754 ;NZD 0.7234-0.7193
Gold +0.1% at $1,852/oz; Crude Oil -0.2% at $53.46/brl; Copper -0.5% at $3.6528/lb