Aussie Trades At Lowest Level Since 2016

Jan 02 19, 06:38 GMT

General Trend:

US equity futures reverse gains, Oil futures decline: China Caixin PMI Manufacturing had first contraction since 2017
Chinese equities weighed down by banking and materials sectors
(CN) Shanghai Banking index -1.6% on session: Former ICBC Chairman Jiangqing said to have warned about possible systematic risk
China and Hong Kong Property names decline amid People’s Daily commentary
Financials and energy shares underperform in Australia
Shares of Kia and Hyundai Motors decline, issued 2019 sales targets
Chinese liquor maker Kweichow Moutai outperforms, issued 2018 guidance
Asian currencies start 2019 generally weaker vs US dollar
Singapore Q4 GDP missed estimates, manufacturing sector contracts
As of Tuesday, the US partial government shutdown entered its 11th day
Bank of Korea (BOK) Gov suggested lower oil prices could weigh on inflation
China PBOC drains liquidity to start the new year
Japan financial markets to reopen on Jan 4th (Friday) after new year’s break

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.2%
(AU) Australia Dec CoreLogic House Price M/M: -1.3% v -0.9% prior (15th m/m straight decline); Y/Y: -4.8% v -4.1% prior
(AU) Australia 10-year bond yield 2.297%, down 2.5bps (lowest since Nov 2016)

China/Hong Kong

Shanghai opened +0.2%, Hang Seng -0.1%

(CN) Hearing Morgan Stanley started China property sector at ‘attractive’
(HK) Hong Kong Macau Dec Gambling Rev:26.5B v 25.0B prior, +16.6% y/y v 10%e
(CN) China President Xi: Domestic economy stayed within a reasonable range; To implement tax cut in 2019 – New Year’s Eve address
(CN) China said to conduct checks on certain firms derivative trading, follows recently disclosed loss by Sinopec’s Unipec unit
(CN) China People’s Daily: Domestic regional economies need to reduce reliance on the property market for growth, focus on sustainable long-term development
(CN) China PBoC sets yuan reference rate: 6.8482 v 6.8632 prior
(CN) China PBoC Open Market Operation (OMO): Injects CNY40B in 7 and 14-day reverse repos v CNY230B injected in 7 and 14-day reverse repos prior; Net: CNY70B drain v CNY230B injection prior

Japan

Korea

Kospi opened +0.3%
(KR) Bank of Korea Gov Lee: Inflation forecast could be lower than earlier projection, did not expect oil prices to decline this much; External conditions are ‘not good’
(KR) North Korea leader Kim: committed to achieving “complete denuclearization” as agreed during first summit with Trump in June, we have stopped making nuclear weapons and that he is ready to meet Trump again at any time – Yonhap citing new Years speech
(KR) South Korea President Moon: Changing frame of economic policies takes time; government will support companies to make active investment
(KR) South Korea Dec Manufacturing PMI: 49.8 v 48.6 prior
(KR) South Korea sells KRW1.6T v KRW1.6T indicated in 3-year bonds, avg yield 1.815%

Other

(SG) SINGAPORE Q4 ADVANCE GDP Q/Q: 1.6% V 3.6%E; Y/Y: 2.2% V 2.5%E
(CN) China President Xi: Reiterates nobody can change the fact that Taiwan is part of China, will leave ‘no space’ for Taiwan independence activities; willing to talk and communicate with parties in Taiwan
(ID) Indonesia Dec CPI M/M: 0.6% v 0.5%e; Y/Y: 3.1% v 3.0%e
(TH) Thailand Dec CPI M/M: -0.7% v -0.1%e; Y/Y: 0.4% v 1.0%e

North America

(US) US President Trump formally invited Democrats to meeting at White House on Wed, unclear if Democrat leaders will attend – US press
(US) Sen Maj Leader McConnell (R-KY): the Senate won’t send Pres Trump a budget bill that he won’t sign; Senate won’t consider House Democratic bill to reopen govt
(US) US President Trump: Gas prices are low and expected to decline in 2019; Looks forward to meeting with North Korea leader Kim

Europe

(UK) Certain business leaders said to be concerned about deteriorating economic conditions in the UK – FT

Levels as of 01:00ET

Nikkei 225, closed, ASX 200 -1.6%, Hang Seng -3%; Shanghai Composite -1.3%; Kospi -1.7%
Equity Futures: S&P500 -0.8%; Nasdaq100 -0.9%, Dax -0.9%; FTSE100 -0.6%
EUR 1.1472-1.1442 ; JPY 109.76-109.33 ; AUD 0.7058-0.7001 ;NZD 0.6726-0.6682
Feb Gold +0.4% at $1,286/oz; Feb Crude Oil -1.6% at $45.05/brl; Feb Copper +0.2% at $2.648/lb

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