US Payrolls And Fed Chair Powell In focus

Jan 04 19, 07:07 GMT

General Trend:

Japan markets decline in return from 4-day holiday
Tech and Marine Transportation names weigh on the Nikkei; Fast Retailing declines over 6% in catchup selling
Chinese equities rebound after lowest open since late 2014, property index rises
Big banks gain in Shanghai; Ping An Bank rises on guidance
Pharma names in Hong Kong trade broadly higher
Financial and Resources sectors lead declines in Australia
Apple suppliers in Asia remain under pressure: Largan Precision declines over 4%
JGB Futures rise in first day of trading in 2019; 10-yr JGB yield remains negative
Gold Futures test $1,300/oz amid recent FX volatility
China Caixin Services PMI rises to 6-month high after manufacturing index moved into contraction
Yen declines after gains on Thursday; AUD/JPY outperforms
Partial US government shutdown entered its 13th day as of Thursday

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened -0.6%
(AU) Australia Dec Final CBA PMI Services: 52.7 v 52.2 prior; PMI Composite: 52.9 v 52.4 prior

China/Hong Kong

Shanghai Composite opened -0.7%, Hang Seng -0.5%
(CN) CHINA DEC CAIXIN PMI SERVICES: 53.9 V 53.0E (6-month high)
(CN) China Premier Li: To step up countercyclical adjustments of macro policies; To make ‘full use’ of RRR and targeted RRR tools
(CN) China Commerce Ministry (MOFCOM): Confirms China and US to hold vice ministerial level trade talks on Jan 7-8th (Mon-Tues)
(US) White House Economic Advisor Hassett: China economy slowing, could be a recession – press
(CN) China PBoC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY60B injected in 7 and 14-day reverse repos prior; Net: CNY160B drain v CNY90B drain prior
(CN) China PBoC sets yuan reference rate: 6.8586 v 6.8631 prior
(CA) Canada govt official: 13 Canadians have been detained in China since Huawei exec arrest – Globe & Mail

Japan

Nikkei 225 opened -1.8%
(JP) Japan Finance Ministry (MOF) Currency Head Asakawa comments on Thursday’s FX volatility: Speculative moves were seen in thin markets
(JP) Japan Fin Min Aso: True corporate conditions are ‘extremely good’ [referring to decline in stock prices]
(JP) Japan Finance Ministry (MOF), FSA and Bank of Japan (BOJ) to hold meeting on markets at 1 pm local time (11 PM EST)
(JP) Reportedly BoJ will consider trimming inflation outlook for next 2 years – Nikkei
(JP) BoJ Gov Kuroda: Markets ‘somewhat rough’, impacted by unexpected overseas developments: Reiterates important to take consistent policy ‘patiently and persistently’ towards beating deflation
(JP) BoJ announcement related to daily bond buying operation: unchanged
(JP) Japan PM Abe: Not intending to dissolve Japan Lower House

Korea

Kospi opened -0.1%
(KR) South Korea Finance Ministry: Held meeting after [recent] US stock decline, global stock market ‘instability’ may continue for ‘a while’
(KR) Bank of Korea (BOK): To closely monitor financial market movement
(KR) South Korea Dec Foreign Reserves: $403.7B v $403B prior

Other

(ID) Indonesia Central Bank: To hold auction in domestic NDF market, to hold auction at ‘fixed rate’ at 8:30 AM (local time)
(MY) Malaysia Nov Trade Balance (MYR): 7.6B v 11.0Be; Exports to the US -3.6% y/y, China +3.9%
(PH) PHILIPPINES DEC CPI M/M: -0.4% V -0.3% PRIOR; Y/Y: 5.1% V 5.6%E

North America

US equity markets ended lower: Dow -2.8%, S&P500 -2.5%, Nasdaq -3.0%, Russell 2000 -1.3%
(US) DEC ISM MANUFACTURING: 54.1 V 57.5E; PRICES PAID: 54.9 V 57.7E (biggest drop in Manufacturing activity since Oct 2008); New Orders Index: 51.1 v 62.1 prior
(US) US Democrat controlled House votes 241to 190 to pass spending package to reopen the government, without border wall funds (as expected); White House has said it would veto any measure that did not include funding for border wall
((US) House Leader Pelosi (D): Reiterates ‘we are not doing a wall’
(US) US Senate Minority Leader Schumer (D): To attend Friday’s meeting at the White House on the government shutdown
(US) Reminder: Fed Chair Powell is expected to speak during Friday morning (around 10:15 AM ET) at the American Economic Association in Atlanta, expected to address monetary policy
(US) Former Fed Vice Chair Kohn suggested Fed officials need to change how they communicate in order to improve the understanding of investors and the public – financial press
(US) Weekly API Oil Inventories: Crude: -4.5M v +6.9M prior

Europe

(UK) UK Brexit Min Barclay: Reiterates second referendum would cause yet more division in the UK
(UK) Telegraph poll shows most Tories would select ‘No-deal’ Brexit
(UK) UK Dec BRC Shop Price Index Y/Y: 0.3% v 0.1% prior (highest since April 2013)
Banca Carige [CRGI.IT]: Malacalza family (main investor) said to have suggested support for a recapitalization of the company – FT

Levels as of 01:00ET

Nikkei 225, -2.7%, ASX 200 -0.3%, Hang Seng 1.6%; Shanghai Composite 1.6%; Kospi 0.7%
Equity Futures: S&P500 +0.5%; Nasdaq100 +0.7%, Dax +0.6%; FTSE100 +0.4%
EUR 1.1412-1.1386 ; JPY 108.44-107.46 ; AUD 0.7031-0.6993 ;NZD 0.6708-0.6675
Feb Gold +0.1% at $1,297/oz; Feb Crude Oil +0.4% at $47.27/brl; Feb Copper +0.7% at $2.595/lb