General Trend:

  • Japanese equities shake-off early catch-up selling after recent holiday
  • Electric Appliance index leads gains in Japan
  • Tech shares rise in China and Hong Kong
  • Australia’s energy index outperforms
  • Pound (GBP) gains ahead of expected Brexit vote; PM May said to consider holding second vote if first fails
  • Oil Futures and Commodity Currencies track gains in the equity markets
  • China PBoC, MoF and NDRC all affirms commitment to boost domestic economy in 2019, affirms policy and monetary stance but hints at willingness to change if needed
  • US and North Korea may hold high level talks this week
  • US government shutdown continues; Trump said to seek to win over moderate Democrats from red districts
  • Taiwan chipmaker Nanya Technology expected to report results later today

Headlines/Economic Data

Japan

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  • Nikkei 225 opened -0.5%
  • 7201.JP CEO Saikawa: choosing a new chairman is not urgent, will wait until the necessary conditions are in place for a consensus on the board; alliance with Renault is crucial if not important, and that the alliance will continue, will discuss once things have calmed down – French press
  • 7270.JP Expected to lower Japan production in 2019 by 2% to 650K units, raise overseas production by 6% to 380K units; total output seen +1% in 2019 – financial press
  • (JP) Japan Dec Bankruptcies y/y: -10.6% v +6.1% prior

Korea

  • Kospi opened +0.2%
  • (KR) South Korea Dec Export Price Index M/M: -2.0% 2.7% prior; Y/Y: -0.6% v 0.0% prior; Import Price Index M/M: -3.4% v -4.5% prior; Y/Y: 3.2% v 6.1% prior (8-month low)
  • 005930.KR Exec Lee: See chip demand rising in 2019 – Korean press
  • (KR) US Sec of State Pompeo may hold talks this week with North Korea – South Korean Press
  • 042670.KR According to industry experts in 2018 sold 15,630 excavators to China, +44% y/y – Yonhap
  • (KR) US President Trump said to have sent letter to North Korea leader Kim, expected to be hand delivered to Kim over the weekend – CNN

China/Hong Kong

  • Hang Seng opened +0.8%, Shanghai Composite +0.1%
  • (CN) China National Development and Reform Commission (NDRC): China to strengthen counter cyclical adjustments in macroeconomic policy, to keep economic operations within reasonable range; Affirms to implement proactive fiscal policy and prudent monetary policy
  • (CN) China PBoC Vice Gov Zhu: PBOC should improve existing monetary policy measures (when asked if China should cut benchmark rates)
  • (CN) China Premier Li: Facing increasing downward pressure for economic growth in 2019; will not resort to ‘flood-like’ stimulus – State TV (overnight)
  • (CN) PBoC Deputy Gov Zhu: Reiterates to continue to stabilize macro-leverage ratio, to further lower financial risks; having prudent monetary policy doesn’t mean can’t tweak monetary policy, prudent policies should stay in line with economic conditions
  • 83.HK Said to be offering to sell homes in Hong Kong at prices below its peers – HK Press
  • (CN) China PBoC Open Market (OMO): Injects CNY180B combined in 7-day and 28-day reverse repos v CNY100B injection of 7-day and 28-day prior; Net: CNY180B injection v CNY20B drain prior
  • (CN) China PBOC sets Yuan Reference Rate: 6.7542 v 6.7560 prior
  • (CN) China Dec vehicle sales y/y: -13% v -13.9% prior; 2018 vehicle sales -2.8% y/y (1st annual drop since 1990) – Industry Association CAAM
  • (CN) China PBoC: To keep reasonable and plentiful liquidity; RRR cut effective today; will make monetary policy neither too tight nor too loose, will make policy more forward looking and flexible; affirms prudent monetary policy and strengthen counter cyclical adjustments
  • (CN) China Finance Ministry: To implement larger tax and fee cuts, which will emphasize reducing burdens for small firms and manufactures ; will step up fiscal expenditure in 2019
  • (CN) CHINA 2018 NEW YUAN LOANS (CNY): 16.17T V 13.53T Y/Y
  • (CN) Supertankers transporting 6M barrels of crude said to have left the Texas coast, speculated to be headed to China – financial press

Australia/New Zealand

  • ASX 200 opened +0.1%
  • (NZ) New Zealand Dec Food Prices m/m: -0.2% v -0.6% prior
  • NVT.AU Receives revised non-binding proposal from the BGH Consortium at $5.825/shr [+9.5% in early trade]

North America

  • (US) White House: Certain lawmakers to attend lunch with US President Trump on Tuesday at the White House (unclear on who)
  • (US) White House said to seek meeting with House Democrats this week on border, Trump said to seek to win over moderate Democrats from red districts – US press
  • (US) Bipartisan group of senators reportedly intend to hold talks on how to end govt shutdown – Wash Post
  • (US) Fed Vice Chair Clarida (moderate, voter): Sees good momentum in economy; Fed can be ‘very patient’ this year – Fox Business interview
  • (VE) US said to consider tougher sanctions on Venezuela oil and military, no final decision has been made – US financial press

Europe

  • (UK) MP Benn to pull ‘no to no Brexit’ amendment in the morning as part of effort by Labour to table vote of no confidence tomorrow evening – Daily Telegraph
  • (UK) If parliament defeats PM May Brexit deal, she is expected to tell them German Chancellor Markel has suggested that EU could gives extra concessions – UK’s Sun
  • (DE) Germany’s CDU party said to be preparing for possible election in 2019 – financial press
  • (IE) S&P warns it may downgrade Ireland sovereign credit rating if the Govt’s budgetary position deteriorates as a result of increased tax competition internationally or from greater pressure on public spending – Irish Times

Levels as of 12:50ET

  • Hang Seng +1.7%; Shanghai Composite +0.8%; Kospi +1.4%; Nikkei225 +0.9%; ASX 200 +0.7%
  • Equity Futures: S&P500 +0.6%; Nasdaq100 +0.7%, Dax +0.6%; FTSE100 +0.4%
  • EUR 1.1465-1.1491; JPY 108.14-108.75; AUD 0.7192-0.7223; NZD 0.6815-0.6843
  • Feb Gold -0.1% at $1,290/oz; Feb Crude Oil +1.4% at $51.20/brl; Mar Copper +0.8% at $2.65/lb
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