HomeContributorsFundamental AnalysisAsia Declines After Mixed US Session

Asia Declines After Mixed US Session

General Trend

  • Asian equities opened mixed, markets are currently trading broadly lower; Indices trade closer to session lows; Hang Seng underperforms amid US comments and TECH declines
  • Australia Energy and Utilities indices decline amid losses in shares of Origin Energy and AGL Energy
  • Tech indices underperform in Shanghai and HK; ZTE and SMIC decline amid comments from the US Commerce Sec Nominee
  • Consumer Staples rise in Shanghai as Kweichow Moutai gained
  • SMIC is expected to report earnings later today
  • Pharma, Information/Communication and Retail firms are among the decliners in Japan; Sony rises following its earnings/guidance, Securities index rises on earnings from Nomura
  • Japan companies expected to report earnings include NTT, Takeda, Softbank Corp, Ricoh, Chugai Pharmaceutical
  • 10-year gov’t bond yields move generally higher, tracking US Treasuries
  • RBA is due to release Quarterly Statement on Monetary Policy (SOMP) on Feb 5th; RBA Gov Lowe is also due to speak before the House of Representatives Standing Committee on Economics
  • China’s Commerce Ministry (MOFCOM) sometimes holds weekly news conferences on Thursday
  • Companies expected to report during the NY morning include Air Products, Arrow Electronics, Baxter International, Becton Dickinson, Bristol-Myers Squibb, Peabody Energy, Carlyle Group, CIGNA, Clorox, Cummins, Quest Diagnostics, Canada Goose, Hershey, Intercontinental Exchange, International Paper, Merck, Madison Square Garden, New York Times, Philip Morris, Ralph Lauren, Tradeweb Markets, YUM!Brands

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened +0.1%
  • ORG.AU Cuts FY21 underlying energy markets EBITDA A$1.0-1.14B (prior A$1.15-1.30B); Capex A$400-440M (prior A$470M); seeing near term headwinds in energy markets business
  • (AU) Australia Dec Final Trade Balance (A$): 6.8B v 8.8Be
  • (AU) Australia Q4 NAB Business Confidence: +14 v -8 prior

Japan

  • Nikkei 225 opened -0.3%
  • (JP) Japan could start COVID vaccinations as soon as Feb 17th – Japan press
  • 6758.JP Reports 9M Net ÂĄ1.06T v ÂĄ569.6B y/y; Op ÂĄ905.4B v ÂĄ810.0B y/y; Rev ÂĄ6.78T v ÂĄ6.51T y/y; Raises FY guidance (yesterday after the close)
  • (JP) Japan MoF sells ÂĄ900B v ÂĄ900B indicated in 0.6% 30-year JGBs, avg yield 0.6620% v 0.6480% prior, bid to cover: 3.47x v 2.98x prior
  • (JP) Japan could start COVID vaccinations as soon as Feb 17th – Japan press

Korea

  • Kospi opened +0.2%
  • (KR) South Korea Govt expected to announce plan that would bring 850K homes to the market as part of cooling the housing market – Yonhap
  • (KR) South Korea to extend short-selling ban until May 2nd (yesterday after the close)

China/Hong Kong

  • Hang Seng opened -0.7%; Shanghai Composite opened -0.4%
  • (CN) China PBOC Open Market Operation (OMO): Injects CNY100B in 14-day reverse repos v CNY100B in 7-day reverse repos prior; Net CNY0B v Net Drain CNY80B prior
  • (CN) China PBOC sets Yuan reference rate: 6.4605 v 6.4669 prior
  • 9988.HK Starts multi-tranche (10-yr, 20-yr, 30-yr and 40-yr) USD bond offering, initial pricing indication +130-160bps/benchmarks
  • (CN) US Commerce Sec Nominee Raimondo: know no reason to remove Huawei, ZTE, SMIC and other China companies from US blacklist
  • (CN) China Auto Industry Association (CAAM): Guides China Jan Auto Sales M/M: 2.54M units v 2.8M prior, Y/Y: +31.9% v +5.4% prior

North America

  • (US) Fed’s Mester (FOMC voter): monetary policy is in a good spot; We probably will need more fiscal aid to get us through the pandemic
  • (US) Fed’s Evans (dove, FOMC voter): inflation is far too low; Fed is committed to using all available tools; Won’t adjust policy based on forecasted inflation, needs to see actual inflation
  • (US) Treasury Sec Yellen to meet with regulators (SEC, Fed Board, NY Fed, CFTC) Feb 4th

Europe

  • University of Oxford to start trial combining Covid-19 vaccines from AstraZeneca and Pfizer that could enable greater flexibility in the use of scarce supplies globally – press

Levels as of 12:15ET

  • Hang Seng -1.7%; Shanghai Composite -1.2%; Kospi -1.8%; Nikkei225 -1.0%; ASX 200 -0.9%
  • Equity Futures: S&P500 -0.3%; Nasdaq100 -0.3%, Dax -0.5%; FTSE100 +0.1%
  • EUR 1.2043-1.2014; JPY 105.15-104.97 ;AUD 0.7648-0.7616; NZD 0.7225-0.7190
  • Commodity Futures: Gold -0.7% at $1,821/oz; Crude Oil +0.6% at $56.02/brl; Copper -0.4% at $3.54/lb

 

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