General Trend:
- Shanghai IT index outperforms in early trade
- China property index lags amid credit rating downgrade for Jiayuan International
- Wuhan Zhongnan Commercial to acquire EasyHome (backed by Alibaba) for CNY37.3B
- Australian market supported by gains in the energy sector
- Nikkei weighed down by declines in heavily weighted components (Fast Retailing, Softbank); Brokerage firms gain on M&A speculation
- Japan’s KDDI speculated to seek to acquire Kabu.com Securities
- Hynix rises over 4% after its earnings and outlook
- Japan Jan Manufacturing PMI hits lowest level since 2016, exports decline at strongest pace in 2.5 years
- Australia Dec unemployment rate unexpectedly declined, participation rate also dropped
- Aussie pares gain seen after labor data on plan by NAB to raise mortgage rates
- Aussie extends declines amid concerns about Australian individual said to be detained in China
- Bank of Korea cut growth and inflation forecasts (as expected), said not yet time to consider further easing
- New Zealand sold 2037 bonds with a less than 2.0x bid to cover
- China Commerce Ministry (MOFCOM) may hold weekly press conference later today
- Malaysia Central Bank rate decision seen later today, no changes expected
- US companies expected to report earnings on Thursday are American Airlines, Bristol-Myers, Freeport-McMoran, Intel, JetBlue, Norfolk Southern, Southwest Airlines, Starbucks, Union Pacific, WW Granger, Western Digital (includes after hours)
- SEMI Dec North America Billing index due after market close on Thursday (Jan 24th)
Headlines/Economic Data
Japan
- Nikkei 225 opened -0.4%
- (JP) JAPAN JAN PRELIM MANUFACTURING PMI: 50.0 V 52.6 PRIOR
- 6302.JP Discovered improper testing at unit
- 8703.JP KDDI said to consider investment of up to ¥100B in the company for a less than 50% stake; Kabu.com expected to be delisted after the bid – Japanese Press
- Follow Up: 9433.JP Confirms considering various options with Kabu.com, nothing decided yet
- 6501.JP Chairman: Nationalization by the UK gov’t only path forward for stalled nuclear project – Japan press
- (JP) Japan Investors Weekly Net Buying of Foreign Bonds: +¥822.9B v +¥2.2T prior; Foreign Buying of Japan Stocks: -¥66.7B v -¥428.2B prior
- (JP) Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.50% (prior 0.70%) 20-yr bonds; avg yield 0.467% v 0.543% prior; bid to cover 4.57x v 3.44x prior
Korea
- Kospi opened flat
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.75%; AS EXPECTED
- (KR) Bank of Korea (BOK Gov Lee: Not time to consider whether further policy easing is needed
- 660.KR Reports Q4 (KRW) Net 3.40T v 3.8Te, Op 4.4T v 5.1Te; Rev 9.94T v 10.3Te; expecting a weaker 2019, lower high end smartphone demand and data center demand
- (KR) North Korea leader Kim: will advance “step by step” toward the goal he reached with the United States – N. Korea media; Satisfied with the personal letter sent from President Trump and spoke highly of him for his “unusual determination and will” to settle issues confronting the two countries in their upcoming second summit
- (KR) South Korea Defense Min: Will soon decide with the United States whether their joint military exercises this spring should be conducted as scheduled – Yonhap
- (KR) Fitch affirms South Korea sovereign rating at AA-; outlook stable
- (KR) Bank of Korea (BOK) Inflation pressure to stay low on declining oil prices, weak demand side pressure; sees annual inflation at 1.6% and GDP at 2.6% in 2020
- 005380.KR Reports Q4 (KRW) Net -129.8B v +748Be; Op 501B v 775B y/y; Rev 25.7T v 25.9Te
China/Hong Kong
- Hang Seng opened +0.3%, Shanghai Composite +0.1%
- (CN) Pres Trump: US is doing well in trade talks with China; tariffs could go up if we don’t reach a deal
- (HK) Hong Kong Chief Executive Lam said she is not optimistic any trade deal between the US and China will last – HK Press
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 4th consecutive session; Net: CNY250B drained v CNY350B drained prior
- (CN) China PBoC sets Yuan Reference Rate: 6.7802 v 6.7969 prior
- (CN) China to crack down on certain health care violations – Local Media
- (CN) China PBoC auctions CNY100B in 28-day Treasury Deposits at 3.30%
- 83.HK Sold only 75% of flats offered despite reduction in price – SCMP
- (CN) China Vice President Wang Qishan: China’s global influence is growing like never before – Davos comments
Australia/New Zealand
- ASX 200 opened flat
- (AU) AUSTRALIA DEC EMPLOYMENT CHANGE: 21.6K V +18.0KE; UNEMPLOYMENT RATE: 5.0% V 5.1%E (lowest level since May 2011)
- (AU) Australia Jan Prelim PMI Manufacturing: 54.3 v 54.0 prior; PMI Services: 51.0 v 52.7 prior; PMI Composite: 51.5 v 52.9 prior
- BKY.AU Gives Q2 update: received a number of favourable assessments from various regulatory bodies including two from the Nuclear Safety Council [+23%]
- (NZ) New Zealand sells NZ$200M v NZ$200M indicated in 2.75% April 2037 bonds, avg yield 2.6998%, bid to cover 1.2x
- NAB.AU Raises variable mortgage rates by 12-16bps, effective Jan 31st
Other Asia
- (ID) Indonesia Central Bank Gov Warjiyo: Difficult to say policy rate cut, to ensure liquidity will be ample, rupiah is still under valued
North America
- (US) Pres Trump reportedly mulling executive actions separate from an emergency declaration to fund a Mexican border wall – CNN
- (US) White House Economic Advisor Hassett: zero percent economic growth is possible in Q1 if govt shutdown continues – CNN interview
- (US) Reportedly Administration officials reportedly ask for data on the impact of a shutdown that goes into March – press
- (US) US House Tax Committee has cancelled Thursday’s hearing related to the shutdown impact on the IRS and tax season after Treasury Sec Mnuchin declined to attend
- F Reports Q4 $0.30 adj v $0.39 y/y, Rev $41.8B v $41.3B y/y
- MSFT China said to block Bing search engine – FT
- AVA Hydro One and Avista mutually agree to terminate merger agreement; Hydro One to pay Avista a $103M termination fee
- CP Reports Q4 C$4.55 v C$4.25e, Rev C$2.0B v C$1.94Be
Europe
- (UK) Labour Leader Corbyn said to likely support bill to force govt to request Article 50 extension; Tory ministers secretly discussing plans to stop no-deal Brexit – UK’s Telegraph; 19 Tory ministers have been holding secret meeting to discuss plans to stop no-deal Brexit
- Osram Licht [OSR.DE]: Reports prelim Q1 Rev €828M, -15% y/y, due to accelerated market decline, especially in Dec
Levels as of 12:50ET
- Hang Seng +0.3%; Shanghai Composite +0.3%; Kospi +0.6%; Nikkei225 -0.1%; ASX 200 +0.4%
- Equity Futures: S&P500 -0.0%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 +0.0%
- EUR 1.1378-1.1398; JPY 109.44-109.65; AUD 0.7103-0.7167;NZD 0.6772-0.6805
- Feb Gold -0.3% at $1,280/oz; Mar Crude Oil -0.5% at $52.33/brl; Mar Copper +0.1% at $2.66/lb
